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Essay / General Electric Financial Analysis - 1802
General Electric Company (GE) is a diversified technology, media and financial services company. With products and services ranging from aircraft engines, power generation, water treatment and security technologies to medical imaging, business and consumer financing, media content and products industrial, the company is present in more than 100 countries. This analysis will use financial ratios to determine GE's performance as a Fortune 500 company. The first thing to analyze is GE's ability to pay its debts when due or, in other words, its liquidity. GE's consolidated liquidity position is adequate. GE's liquidity is supported both by the company's consistent results and its ability to quickly divest businesses or assets to meet its strategic objectives. Consolidated cash and equivalents were $8.3 billion. On a consolidated basis, GE had a total of approximately $56 billion in contractual loan agreements as well as numerous other sources of liquidity. General Electric, a frequent triple-A rated borrower, is in a stable liquidity position. Its issuance policy is not based on market outlook but rather on a planned issuance program to support its ongoing financial activities and asset addition. The next thing to analyze is how GE manages its assets. If you look at the numbers, GE as a company has a return on assets of 3.01, while the industry has a return on assets of 6.10. It appears that GE is not very good at converting its investments into profits. For example, a short-term bond fund managed 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 document ......March 1, 2008, from http://biz.yahoo.com/bw/(5) Condon, Christopher and Layne Rachel. (2008, January). GE Bond investors cash in after subprime losses. Bloomberg.com Accessed February 28, 2008, http://www.bloomberg.com/apps/news(6) Hinton, Sean. (2008, March). General Electricity Company (GE). Wikinvest Accessed March 3, 2008 from http://www.wikinvest.com/stock/General_Electric_Company_(GE)(7) Hinton, Sean. (2008, March). General Electricity Company (GE). Wikinvest Accessed March 3, 2008 from http://www.wikinvest.com/stock/General_Electric_Company_(GE)(8) Hinton, Sean. (2008, March). General Electricity 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