Financial Analysis Of General Electric

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General Electric Company (GE) is a diversified technology, media and financial services company. With products and services ranging from aircrafts engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and industrial products, it serves in more than 100 countries. This analysis will use financial ratios to see just how GE is performing as a Fortune 500 company. The first thing to analyze is GE’s capacity to pay its debts as they come due or in other words its liquidity. GE consolidated liquidity position is adequate. GE’s liquidity is supported both by the firm’s consistent earnings track record and its ability to quickly divest business or assets to fit its strategic goals. Consolidated cash and equivalents were $8.3 billion. On a consolidated basis GE had a total of around $56 billion of contractually committed lending arrangements as well as numerous other sources of liquidity. General Electric, a triple-A rated, frequent borrower, is in a stable position with regards to liquidity. Its issuance policy is not based on market outlook but rather on a planned program of issuance to support its ongoing financial businesses and its addition of assets. The next thing to analyze is the way GE is managing its assets. If you look at the numbers GE as a company has a 3.01 return on assets, while the industry has 6.10 return on assets. It seems that GE is not very efficient in converting its investments into profits. For example a short-term bond fund run by General Electric Co.'s GE Asset Management returned money to investors at 96 cents on the dollar after losing about $200 million, mostly on mortgage-backed securities (1). The GEAM Trust Enhanced C... ... middle of paper ... ...March 1, 2008, from http://biz.yahoo.com/bw/ (5) Condon, Christopher and Layne Rachel. (2008, January). GE Bond Investors Cash Out After Losses From Subprime. Bloomberg.com Retrieved February 28, 2008, http://www.bloomberg.com/apps/news (6) Hinton, Sean. (2008, March). General Electric Company (GE). Wikinvest Retrieved March 3, 2008, from http://www.wikinvest.com/stock/General_Electric_Company_(GE) (7) Hinton, Sean. (2008, March). General Electric Company (GE). Wikinvest Retrieved March 3, 2008, from http://www.wikinvest.com/stock/General_Electric_Company_(GE) (8) Hinton, Sean. (2008, March). General Electric Company (GE). Wikinvest Retrieved March 3, 2008, from http://www.wikinvest.com/stock/General_Electric_Company_(GE) All ratios taken from: General Electric http://www.ge.com/investors/financial_reporting/index.html

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