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Financial Analysis of General Electric CO - Essay Example

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Financial Analysis of General Electric CO

GE is investing in cleaner technologies and being recognized for the effort.
GE Company is well managed. The data are mostly positive over the years. The company is showing growth in all the areas. It is also low geared and showing positive growth in profitability, liquidity, efficiency measurements. The company seems to be in the maturity phase. Analysts are positive about the growth of the company. So, the company has not topped its potential as yet.















Appendix
1. Return on Investment (ROI) = {Profit before taxes (PBIT) / Investment (total assets - current liabilities)}
2006: {24,620 / (697,239 - 220,514)} x 100; 2005: {22,696 / (673,321 - 204,970)} x 100
2. Gross Profit Ratio = (Gross Profit) / Total Revenues) x 100
2006: (89,281 / 163, 391) x 100 ; 2005: (81,142 / 147,956) x 100
3. Return on Equity (ROE) = {Profit after taxes / Shareholder's Equity }x 100
2006: (20,666 / 112,314) x 100 ; 2005: (18,661 / 109,351) x 100
4. Earnings per share (given)
5. Working Capital = Current Assets - Current Liabilities
2006: (438,728 - 220,514) ; 2005: (378,269 - 204,970)
6. Current Ratio = Current Assets : Current Liabilities
2006: (438,728 / 220,514) ; 2005: (378,269 / 204,970)
7. Acid Test (or Quick) Ratio = Quick Assets : Current Liabilities (Quick Assets = Current Assets - Equity)
2006: (390,902 / 220,514) ; 2005: (336,121 / 204,970)
8. Total Asset Turnover = Revenue / Total Assets (fixed + current) (times)
2006: (163,391 / 697,239) ; 2005: (147,956 / 673,321)
9. Fixed Asset Turnover = Revenue / Fixed Assets (times)
2006: (163,391 / 258,511) ; 2005: (147,956 / 295052)
10. Cash Turnover Ratio = Total Revenues / Cash Balance s (times) (Cash Balances = Cash + Accounts Receivables)
2006: (163,391 / 28,229) ; 2005: (147,956 / 23,676)
11. Gearing ratio = {Total Debt Capital / (Total Debt Capital + Equity ) }x 100
2006: {432,957 / (432,957 + 112,314)}x100 ; 2005: {370,437 / ...Show more

Summary

GE has entered in a big way in China with about $500 million invested for the Summer Olympics. It is working on 300 projects in China and hopes to gain a foothold in a critical market. It expects a boost in sales in China of about $ 10 billion by 2010 (Associated Press,July 2007)…
Author : morarjuston
Financial Analysis of General Electric CO essay example
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