Finance and Accounting: General Electric Company - Assignment Example

GE's diversified operations have remained a boon in crisis time. For example, during 9/11 GE’s energy and capital business mitigated the adverse impact. Then, the company responded by investing in next-generation aircraft engines developing more efficient GE 90 versions. In 2009 financial crisis, its industrial businesses generated $17 billion of cash that helped support GE Capital in time. GE has numerous key products in its portfolios such as gas turbines, wind turbines, power generation services, nuclear reactors, engines, and generators.

The current oil price drop has helped the company to acquire Alstom at the attractive price. At the beginning of the current year, the company had the backlog of orders worth $65 billion in power and water systems. Similarly, in the aviation sector, the order backlog for commercial and military engines was staggering at $134 billion (GE 2014 FORM 10-K). GE has been successfully competing with its all major rivals such as Siemens, ABB, Cummins, Emerson Electric, Honeywell International, Atlas Copco and many more in their respective fields (MorningStar, 2015).

GE does face credit risk in their industrial and GE capital lending and investing businesses along with derivative financial instrument activities; however, the company employs proper risk mitigation strategies. Currently, no contingent liability is envisaged. On the revenue front, the company has not registered any considerable improvement; in fact, sales have remained more or less stagnant. The current and quick ratios around 1.9-2.0 clearly reveal that the company is robust in meeting its liabilities.

Net profit margin shows improvement in 2014 over 2013; however, gross profit margin has reduced from 45.35% in 2013 to 43.57% in 2013. Cash flows from operations have also reduced slightly in 2014 when compared to its previous year. Long-term outstanding debt has consistently reduced from $381b in 2008 to $207b in 2014.