FinancialAnalysis: General Electric
FinancialAnalysis: General Electric
Infinancial analysis, there are various areas of performance of acompany that needs to be scrutinized. Profitability growth,management of the operational costs and the wholesome growth inwealth of the shareholders are some of the pertinent areas that needto be addressed in details. For this reason, the financial soundnessof a company can be determined through a thorough analysis of thefinancial statements that are deemed to be quite substantial inmaking sure that the financial position of the company is realized.This study takes a look at the General electric company’s financialperformance into perspective. In specific terms it shall look intothe organizational context of the company with keen concern on theproducts and services it deals in, the management of the company andits formidability in steering the activities of this company forward.Additionally, the research takes a retrospective approach to theanalysis of the recent financial statements with a view tounderstating its financial soundness.
Companybackground
Generalelectric is one of the multinational companies that deal in a varietyof products and services. These products range from the oil, water,power appliances, healthcare aviation, transportation energymanagement, medical services, and financial services among others. The company was incorporated in New York in the year 1892. Thecompany is deemed to be listed in the New York stock exchange and isclassified as a conglomerate. It has its headquarters at Fairfield,Connecticut, united states. The company recorded a high operatingincome of about $ 8.19 Billion in the year 2015 with net revenue of $117. 4 Billion. The conglomerate currently has over 300,000employees who are determined to bring high level of efficiency in themanagement of the company. Furthermore, the corporation has numeroussubsidiaries which are spread across the world with keen attention ofmeeting the objective of the firm. The next discussion gives afinancial analysis of the company with keen attention on the realfinancial position of the same.
Financialanalysis
Liquidity
Liquidityratios give an incisive report on the way in which the companymanages its liquid cash. This analysis is very critical for themaintenance of money for meeting the immediate needs of the businessand seeing it that the opportunity cost of holding cash at one pointin the company is always. The ratios that have been used here arecash ratio, the acid test ratio, and the current ratio. The graphbelow shows the real statistics of these three parameters for theGeneral Electric Company and the comparison with the industry aswell.
Chart1.0 Liquidity Ratios
Acloser look at the graph reveals that the current ratio has beenincreasing since the year 2012. The required current ratio should be1.0. From the chart, it is very evident that the current ratio forthe company is a right stance because all the current ratios for thefour years are seen to higher than 1.0.additionally, it is imperativeto note that the corporation is deemed to be enough liquid in itsoperations. This liquidity means that the company has enough cash onhand to meet the immediate needs of the company. The acid test ratioalso reveals that the company is indeed on the high stance of makingsure that the company utilized its cash in the most appropriate waypossible. The industry average is supposed by the company quick ratioin the recent years (2015 and 2014). This range shows that the firmhas been keen in ensuring that it brings the notion of financialliquidity up to speed in the recent years. Looking at the flow ofcash using the cash flow ratio we see that the company is still doingvery well. It is important to note that when calculating the cashratio, we inculcated the notion of the marketable securities becauseit is possible that we could liquidate these assets as soon as thecompany needs as long as the opportunity cost is not high.
Takinga look at the company average about those of the enterprise we seethat the firm is on the right track as it is just above the companyin the latest year of analysis (2015). With a current ratio of 1.6 inthe year 2015 for the company, one can conclude that for every unitamount of liability that the company might owe the creditors thecompany has 1.6 units of the assets at its disposal to offset thedebt in question. In this prospect, it gives the creditors moreconfidence to give the company more credit since we are sure fromthis analysis that the firm can meet its immediate financial needs inthe most appropriate ways possible using the current assets that areat its disposal. Furthermore, the acid test ratio that excludes thestocks still shows high strength in the management of liquid cash.From this analysis, it is evident that the company has efficientlymanaged its liquidity and therefore the liquidity soundness is up todate.
Asset Management
Inthis area, it is important to look at the way in which the companyhas managed its assets. The property of the enterprise is very vitalsince they are the drivers for which the company would use in makingsure that the revenue is realized. The realization of the incomewill be revealed in many aspects of our analysis. These aspects canbe in terms of looking at the rate at which the company utilizes itsstocks and the profitability of each stock among others. Here wetake a look at the various ratios such as the inventory turnover, thefixed asset turnover, the average collection period and the totalasset turnover. The graphs that outline the comparison of the ratiosare as shown below.
Chart2.1 Asset Management
Fromthe chart above, the fixed asset turnover stands at 0.45 in 2015. This numerical show that the earnings that are got per unit of fixedasset invested are 0.45. This figure has been dropping since the year2012. The reduction is attributed to the various cuts in theprofitability in the company as the operational costs increase. Thecompany has since made it very clear that it needs to improve in themeans and ways of making sure that the operational expenses arereduced. In comparison with the industry average, the company is inthe production range since the sector range stands at 0.46 while thatof the company in the latest year is 0.45 (Bernstein,& Maksy, 2010). This figures show that the company is still financially soundregarding making sure that it is on the competitive edge. On theaccount of the Total asset turnover, the company is doing poorly onthis stance and hence there is a need to bring on board the advent ofmaking sure that it beefs up its skills of producing efficiently andcost effectively to increase this turnover. The graph below shows thetrend on the days the company takes to collect its debts.
Graph2.1.0 Debt Collection period
Theaverage days approximated for the collection of debts for the companyis seen to be quite. For example in the year 2015, the company hasdebt collection period of over 800 days. This period clearly showsthat the company needs to review its debt collection policiesimmediately. Additionally, it should be noted that the industrycollection average stands at 365 days which is equivalent to 1 yearfor the short term debts. This figure is quite lower than thosedepicted by General Electric over the years. The graph below nowshows the inventory turnover that connotes how frequent the companyuses the stocks.
The profitabilityanalysis
Profitability analysis entailsthe scrutiny of the enterprise regarding the amount of gain that thecompany brings to its owners regarding profits and various proceedsfrom the same. The pertinent financial ratios that have been usedhere are the net profit margin, the operating profit margin, thereturn on asset, the return on equity, and the gross profit margin.The summary of these calculations has been expressed in the graphbelow.
Graph4.1 Profitability graph
Looking at the gross profitmargin in the financial year 2015, the company showed a high grossprofit. This indeed was an indication of positive improvement ascompared to what was registered in the year 2014. The average for theindustry is 27.5%, a figure that is slightly lower in comparison tothat of General Electric Company. The net operating profit asindicated points to strong stand in regards to profits made. The netprofits stand at approximately 17% to 48%. Looking at the range, itcan be said to be good enough. This means that area in which thecompany operates is very promising in regards to the profits. Thisfact is due to high net profit margin which is somehow highercompared to the values that are portrayed in the industry.
Conclusion
In a nutshell, the company isseen to have a high financial standing which has helped it to be onthe competitive edge. The profitability is deemed to be quitesubstantial which depicts good management of the conglomerate.
References
Bernstein,L. A., & Maksy, M. M. (2010). Casesin financial statement reporting and analysis.Homewood, Ill: Irwin.
Peterson,P. P., & Fabozzi, F. J. (2012). Analysisof Financial Statements.Hoboken: John Wiley & Sons.
Taparia,J. (2013). Understandingfinancial statements: A journalist`s guide.Oak Park, IL: Marion Street Press.
APPENDICES
STATEMENTOF FINANCIAL POSITION
General Electric Company | |||||
and consolidated affiliates | |||||
At December 31 (In millions, except share amounts) | 2015 | 2014 | |||
Assets | $ | 70,483 | $ | 70,025 | |
Cash and equivalents | |||||
Investment securities (Note 3) | 31,973 | 35,505 | |||
Current receivables (Note 4) | 27,022 | 23,237 | |||
Inventories (Note 5) | 22,515 | 17,689 | |||
Financing receivables net (Note 6) | 12,052 | 13,445 | |||
Other GE Capital receivables | 6,782 | 6,261 | |||
Property, plant and equipment net (Note 7) | 54,095 | 48,070 | |||
Receivable from GE Capital (debt assumption) | – | – | |||
Investment in GE Capital | – | – | |||
Goodwill (Note 8) | 65,526 | 53,207 | |||
Other intangible assets net (Note 8) | 16,744 | 13,182 | |||
Contract assets (Note 9) | 21,156 | 16,960 | |||
All other assets (Note 9) | 37,471 | 24,836 | |||
Deferred income taxes (Note 14) | 3,105 | 6,183 | |||
Assets of businesses held for sale (Note 2) | 2,818 | 2,826 | |||
Assets of discontinued operations (Note 2) | 120,951 | 323,529 | |||
Total assets(a) | $ | 492,692 | $ | 654,954 | |
Liabilities and equity | |||||
Short-term borrowings (Note 10) | $ | 49,892 | $ | 70,425 | |
Accounts payable, principally trade accounts | 13,680 | 12,067 | |||
Progress collections and price adjustments accrued | 15,776 | 12,537 | |||
Dividends payable | 2,167 | 2,317 | |||
Other GE current liabilities | 23,597 | 14,323 | |||
Non-recourse borrowings of consolidated securitization entities (Note 10) | 3,083 | 4,403 | |||
Long-term borrowings (Note 10) | 145,301 | 186,596 | |||
Investment contracts, insurance liabilities and insurance annuity benefits (Note 11) | 25,692 | 27,432 | |||
Non-current compensation and benefits | 40,487 | 42,238 | |||
All other liabilities (Note 13) | 22,558 | 16,511 | |||
Liabilities of businesses held for sale (Note 2) | 861 | 941 | |||
Liabilities of discontinued operations (Note 2) | 46,487 | 128,233 | |||
Total liabilities(a) | 389,582 | 518,023 | |||
Redeemable noncontrolling interests (Note 15) | 2,972 | 98 | |||
Preferred stock (5,944,250 shares outstanding at year-end 2015 | 6 | – | |||
and no shares outstanding at year-end 2014) | |||||
GECC preferred stock (no shares outstanding at year-end 2015 | – | – | |||
and 50,000 shares outstanding at year-end 2014) | |||||
Common stock (9,379,288,000 and 10,057,380,000 shares outstanding | 702 | 702 | |||
at year-end 2015 and 2014, respectively) | |||||
Accumulated other comprehensive income (loss) net attributable to GE(b) | 460 | 1,013 | |||
Investment securities | |||||
Currency translation adjustments | (5,499) | (2,428) | |||
Cash flow hedges | (80) | (180) | |||
Benefit plans | (11,410) | (16,578) | |||
Other capital | 37,613 | 32,889 | |||
Retained earnings | 140,020 | 155,333 | |||
Less common stock held in treasury | (63,539) | (42,593) | |||
98,274 | 128,159 | ||||
Noncontrolling interests(c) (Note 15) | 1,864 | 8,674 | |||
Total equity (Note 15 and 16) | 100,138 | 136,833 | |||
Total liabilities, redeemable noncontrolling interests and equity | $ | 492,692 | $ | 654,954 | |
STATEMENTOF FINANCIAL POSITION (CONTINUED)
GE(a) | Financial Services (GE Capital) | ||||||||
At December 31 (In millions, except share amounts) | 2015 | 2014 | 2015 | 2014 | |||||
Assets | |||||||||
Cash and equivalents | $ | 10,372 | $ | 15,916 | $ | 60,111 | $ | 54,109 | |
Investment securities (Note 3) | 151 | 84 | 31,827 | 35,425 | |||||
Current receivables (Note 4) | 14,707 | 11,513 | – | – | |||||
Inventories (Note 5) | 22,449 | 17,639 | 66 | 50 | |||||
Financing receivables – net (Note 6) | – | – | 25,003 | 25,647 | |||||
Other GE Capital receivables | – | – | 15,865 | 13,848 | |||||
Property, plant and equipment net (Note 7) | 20,145 | 17,207 | 34,781 | 31,253 | |||||
Receivable from GE Capital (debt assumption)(b) | 85,114 | – | – | – | |||||
Investment in GE Capital | 46,227 | 82,549 | – | – | |||||
Goodwill (Note 8) | 63,157 | 51,526 | 2,370 | 1,680 | |||||
Other intangible assets net (Note 8) | 16,312 | 12,984 | 435 | 202 | |||||
Contract assets (Note 9) | 21,156 | 16,960 | – | – | |||||
All other assets (Note 9) | 13,281 | 7,722 | 25,287 | 17,445 | |||||
Deferred income taxes (Note 14) | 7,666 | 8,772 | (4,561) | (2,590) | |||||
Assets of businesses held for sale (Note 2) | 2,818 | 2,805 | – | – | |||||
Assets of discontinued operations (Note 2) | 9 | 9 | 120,942 | 323,520 | |||||
Total assets | $ | 323,562 | $ | 245,686 | $ | 312,125 | $ | 500,589 | |
Liabilities and equity | |||||||||
Short-term borrowings (Note 10)(b) | $ | 19,799 | $ | 3,872 | $ | 48,650 | $ | 67,416 | |
Accounts payable, principally trade accounts | 19,250 | 16,511 | 1,745 | 1,905 | |||||
Progress collections and price adjustments accrued | 15,776 | 12,550 | – | – | |||||
Dividends payable | 2,167 | 2,317 | – | – | |||||
Other GE current liabilities | 23,595 | 14,322 | – | – | |||||
Non-recourse borrowings of consolidated securitization entities (Note 10) | – | – | 3,083 | 4,403 | |||||
Long-term borrowings (Note10)(b) | 83,770 | 12,468 | 129,062 | 174,174 | |||||
Investment contracts, insurance liabilities and insurance annuity benefits | – | – | 26,155 | 27,881 | |||||
Non-current compensation and benefits | 39,472 | 41,494 | 1,006 | 734 | |||||
All other liabilities (Note 13) | 15,573 | 11,429 | 9,351 | 5,583 | |||||
Liabilities of businesses held for sale (Note 2) | 1,409 | 1,504 | – | – | |||||
Liabilities of discontinued operations (Note 2) | 128 | 137 | 46,359 | 128,096 | |||||
Total liabilities | 220,938 | 116,604 | 265,411 | 410,191 | |||||
Redeemable noncontrolling interests (Note 15) | 2,972 | 98 | – | – | |||||
Preferred stock (5,944,250 shares outstanding at year-end 2015) | 6 | – | 6 | – | |||||
and no shares outstanding at year-end 2014) | |||||||||
GECC preferred stock (no shares outstanding at year-end 2015 | – | – | – | – | |||||
and 50,000 shares outstanding at year-end 2014) | |||||||||
Common stock (9,379,288,000 and 10,057,380,000 shares outstanding | 702 | 702 | – | – | |||||
at year-end 2015 and 2014, respectively) | |||||||||
Accumulated other comprehensive income (loss) – net attributable to GE | 460 | 1,013 | 456 | 1,010 | |||||
Investment securities | |||||||||
Currency translation adjustments | (5,499) | (2,428) | (898) | (839) | |||||
Cash flow hedges | (80) | (180) | (112) | (172) | |||||
Benefit plans | (11,410) | (16,578) | (540) | (577) | |||||
Other capital | 37,613 | 32,889 | 12,326 | 32,999 | |||||
Retained earnings | 140,020 | 155,333 | 34,988 | 55,077 | |||||
Less common stock held in treasury | (63,539) | (42,593) | – | – | |||||
Total GE s | 98,274 | 128,159 | 46,227 | 87,499 | |||||
Noncontrolling interests (Note 15) | 1,378 | 825 | 486 | 2,899 | |||||
Total equity (Notes 15 and 16) | 99,651 | 128,984 | 46,713 | 90,398 | |||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 323,562 | $ | 245,686 | $ | 312,125 | $ | 500,589 | |
STATEMENTOF EARNINGS
General Electric Company | ||||||
and consolidated affiliates | ||||||
For the years ended December 31 (In millions per-share amounts in dollars) | 2015 | 2014 | 2013 | |||
Revenues and other income | ||||||
Sales of goods | $ | 74,510 | $ | 76,568 | $ | 71,873 |
Sales of services | 31,298 | 30,190 | 28,669 | |||
Other income (Note 17) | 2,227 | 778 | 3,107 | |||
GE Capital earnings from continuing operations | – | – | – | |||
GE Capital revenues from services | 9,350 | 9,648 | 9,595 | |||
Total revenues and other income | 117,386 | 117,184 | 113,245 | |||
Costs and expenses (Note 26) | ||||||
Cost of goods sold | 59,905 | 61,257 | 57,867 | |||
Cost of services sold | 22,788 | 22,447 | 21,974 | |||
Selling, general and administrative expenses | 17,831 | 16,848 | 17,945 | |||
Interest and other financial charges | 3,463 | 2,723 | 2,870 | |||
Investment contracts, insurance losses and | ||||||
insurance annuity benefits | 2,605 | 2,530 | 2,661 | |||
Other costs and expenses | 2,608 | 1,115 | 828 | |||
Total costs and expenses | 109,200 | 106,921 | 104,145 | |||
Earnings from continuing operations | ||||||
before income taxes | 8,186 | 10,263 | 9,100 | |||
Benefit (provision) for income taxes (Note 14) | (6,485) | (773) | (1,219) | |||
Earnings from continuing operations | 1,700 | 9,490 | 7,881 | |||
Earnings (loss) from discontinued operations, | ||||||
net of taxes (Note 2) | (7,495) | 5,855 | 5,475 | |||
Net earnings (loss) | (5,795) | 15,345 | 13,355 | |||
Less net earnings (loss) attributable to noncontrolling interests | 332 | 112 | 298 | |||
Net earnings (loss) attributable to the Company | (6,126) | 15,233 | 13,057 | |||
Preferred stock dividends | (18) | – | – | |||
Net earnings (loss) attributable to GE common shareowners | $ | (6,145) | $ | 15,233 | $ | 13,057 |
Amounts attributable to GE common shareowners | ||||||
Earnings from continuing operations | $ | 1,700 | $ | 9,490 | $ | 7,881 |
Less net earnings (loss) attributable to | ||||||
noncontrolling interests, continuing operations | 19 | (45) | 262 | |||
Earnings from continuing operations attributable | ||||||
to the Company | 1,681 | 9,535 | 7,618 | |||
Preferred stock dividends | (18) | – | – | |||
Earnings from continuing operations attributable | ||||||
to GE common shareowners | 1,663 | 9,535 | 7,618 | |||
Earnings (loss) from discontinued operations, net of taxes | (7,495) | 5,855 | 5,475 | |||
Less net earnings (loss) attributable to | ||||||
noncontrolling interests, discontinued operations | 312 | 157 | 36 | |||
Net earnings (loss) attributable to GE common shareowners | $ | (6,145) | $ | 15,233 | $ | 13,057 |
Per-share amounts (Note 18) | ||||||
Earnings from continuing operations | ||||||
Diluted earnings per share | $ | 0.17 | $ | 0.94 | $ | 0.74 |
Basic earnings per share | $ | 0.17 | $ | 0.95 | $ | 0.74 |
Net earnings (loss) | ||||||
Diluted earnings (loss) per share | $ | (0.61) | $ | 1.50 | $ | 1.27 |
Basic earnings (loss) per share | $ | (0.62) | $ | 1.51 | $ | 1.28 |
Dividends declared per common share | $ | 0.92 | $ | 0.89 | $ | 0.79 |
STATEMENTOF EARNINGS (CONTINUED)
For the years ended December 31 | GE(a) | Financial Services (GE Capital) | |||||||||||||||||||||||
(In millions per-share amounts in dollars) | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | |||||||||||||||||||
Revenues and other income | |||||||||||||||||||||||||
Sales of goods | $ | 74,565 | $ | 76,715 | $ | 71,951 | $ | 79 | $ | 121 | $ | 126 | |||||||||||||
Sales of services | 31,641 | 30,594 | 29,063 | – | – | – | |||||||||||||||||||
Other income (Note 17) | 2,165 | 707 | 2,886 | – | – | – | |||||||||||||||||||
GE Capital earnings from continuing operations | (7,672) | 1,532 | 699 | – | – | – | |||||||||||||||||||
GE Capital revenues from services | – | – | – | 10,722 | 11,199 | 11,141 | |||||||||||||||||||
Total revenues and other income | 100,700 | 109,546 | 104,599 | 10,801 | 11,320 | 11,267 | |||||||||||||||||||
Costs and expenses (Note 26) | |||||||||||||||||||||||||
Cost of goods sold | 59,970 | 61,420 | 57,962 | 69 | 104 | 108 | |||||||||||||||||||
Cost of services sold | 20,858 | 20,456 | 19,668 | 2,273 | 2,394 | 2,700 | |||||||||||||||||||
Selling, general and administrative expenses | 14,914 | 14,972 | 16,104 | 3,512 | 2,689 | 2,550 | |||||||||||||||||||
Interest and other financial charges | 1,706 | 1,579 | 1,333 | 2,301 | 1,638 | 2,021 | |||||||||||||||||||
Investment contracts, insurance losses and | |||||||||||||||||||||||||
insurance annuity benefits | – | – | – | 2,737 | 2,660 | 2,764 | |||||||||||||||||||
Other costs and expenses | – | – | – | 2,647 | 1,159 | 856 | |||||||||||||||||||
Total costs and expenses | 97,447 | 98,427 | 95,068 | 13,539 | 10,645 | 10,999 | |||||||||||||||||||
Earnings (loss) from continuing operations | |||||||||||||||||||||||||
before income taxes | 3,252 | 11,119 | 9,531 | (2,739) | 676 | 268 | |||||||||||||||||||
Benefit (provision) for income taxes (Note 14) | (1,506) | (1,634) | (1,667) | (4,979) | 861 | 448 | |||||||||||||||||||
Earnings (loss) from continuing operations | 1,746 | 9,485 | 7,864 | (7,718) | 1,537 | 716 | |||||||||||||||||||
Earnings (loss) from discontinued operations, | |||||||||||||||||||||||||
net of taxes (Note 2) | (7,807) | 5,698 | 5,439 | (7,485) | 5,860 | 5,540 | |||||||||||||||||||
Net earnings (loss) | (6,061) | 15,182 | 13,303 | (15,202) | 7,397 | 6,256 | |||||||||||||||||||
Less net earnings (loss) attributable to noncontrolling interests | 83 | (50) | 245 | 248 | 162 | 53 | |||||||||||||||||||
Net earnings (loss) attributable to the Company | (6,145) | 15,233 | 13,057 | (15,450) | 7,234 | 6,204 | |||||||||||||||||||
Preferred stock dividends | – | – | – | (330) | (322) | (298) | |||||||||||||||||||
Net earnings (loss) attributable to GE common shareowners $ | (6,145) | $ | 15,233 | $ | 13,057 | $ | (15,780) | $ | 6,912 | $ | 5,906 | ||||||||||||||
Amounts attributable to GE common shareowners: | |||||||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 1,746 | $ | 9,485 | $ | 7,864 | $ | (7,718) | $ | 1,537 | $ | 716 | |||||||||||||
Less net earnings (loss) attributable to | |||||||||||||||||||||||||
noncontrolling interests, continuing operations | 83 | (50) | 245 | (64) | 5 | 17 | |||||||||||||||||||
Earnings (loss) from continuing operations attributable | 1,663 | 9,535 | 7,618 | (7,654) | 1,532 | 699 | |||||||||||||||||||
to the Company | |||||||||||||||||||||||||
Preferred stock dividends | – | – | – | (330) | (322) | (298) | |||||||||||||||||||
Earnings (loss) from continuing operations attributable | |||||||||||||||||||||||||
to GE common shareowners | 1,663 | 9,535 | 7,618 | (7,983) | 1,209 | 401 | |||||||||||||||||||
Earnings (loss) from discontinued operations, net of taxes | (7,807) | 5,698 | 5,439 | (7,485) | 5,860 | 5,540 | |||||||||||||||||||
Less net earnings (loss) attributable to | |||||||||||||||||||||||||
noncontrolling interests, discontinued operations | – | – | – | 312 | 157 | 36 | |||||||||||||||||||
Net earnings (loss) attributable to GE common shareowners $ | (6,145) | $ | 15,233 | $ | 13,057 | $ | (15,780) | $ | 6,912 | $ | 5,906 | ||||||||||||||
STATEMENTOF CASH FLOWS
General Electric Company | ||||||||
and consolidated affiliates | ||||||||
For the years ended December 31 (In millions) | 2015 | 2014 | 2013 | |||||
Cash flows operating activities | ||||||||
Net earnings (loss) | $ | (5,795) | $ | 15,345 | $ | 13,355 | ||
Less net earnings (loss) attributable to noncontrolling interests | 332 | 112 | 298 | |||||
Net earnings (loss) attributable to the Company | (6,126) | 15,233 | 13,057 | |||||
(Earnings) loss from discontinued operations | 7,495 | (5,855) | (5,475) | |||||
Adjustments to reconcile net earnings attributable to the | ||||||||
Company to cash provided from operating activities: | ||||||||
Depreciation and amortization of property, | ||||||||
plant and equipment | 4,847 | 4,953 | 5,202 | |||||
Earnings from continuing operations retained by GE Capital | – | – | – | |||||
Deferred income taxes | 383 | (882) | (3,540) | |||||
Decrease (increase) in GE current receivables | (52) | (1,913) | (485) | |||||
Decrease (increase) in inventories | (314) | (872) | (1,368) | |||||
Increase (decrease) in accounts payable | (541) | 565 | 442 | |||||
Increase (decrease) in GE progress collections | (996) | (515) | 1,892 | |||||
All other operating activities | 7,160 | 5,318 | 4,672 | |||||
Cash from (used for) operating activities continuing operations | 11,856 | 16,033 | 14,398 | |||||
Cash from (used for) operating activities discontinued operations | 8,034 | 11,676 | 14,112 | |||||
Cash from (used for) operating activities | 19,891 | 27,709 | 28,510 | |||||
Cash flows investing activities | ||||||||
Additions to property, plant and equipment | (7,309) | (7,134) | (6,754) | |||||
Dispositions of property, plant and equipment | 3,020 | 2,923 | 2,716 | |||||
Net decrease (increase) in GE Capital financing receivables | 1,043 | 1,260 | 2,151 | |||||
Proceeds from sale of discontinued operations | 79,615 | 232 | 528 | |||||
Proceeds from principal business dispositions | 2,283 | 630 | 1,818 | |||||
Proceeds from sale of equity interest in NBCU LLC | – | – | 16,699 | |||||
Net cash from (payments for) principal businesses purchased | (12,027) | (2,091) | (8,026) | |||||
All other investing activities | (5,013) | 23,410 | 35,027 | |||||
Cash from (used for) investing activities continuing operations | 61,613 | 19,229 | 44,159 | |||||
Cash from (used for) investing activities discontinued operations | (2,125) | (24,263) | (15,042) | |||||
Cash from (used for) investing activities | 59,488 | (5,034) | 29,117 | |||||
Cash flows financing activities | ||||||||
Net increase (decrease) in borrowings (maturities of | ||||||||
90 days or less) | (24,459) | (6,409) | (14,048) | |||||
Newly issued debt (maturities longer than 90 days) | 13,951 | 14,629 | 38,356 | |||||
Repayments and other reductions (maturities longer than 90 days) | (47,038) | (38,410) | (53,624) | |||||
Proceeds from issuance of GE Capital preferred stock | – | – | 990 | |||||
Net dispositions (purchases) of GE shares for treasury | (1,099) | (1,218) | (9,278) | |||||
Dividends paid to shareowners | (9,295) | (8,852) | (7,821) | |||||
All other financing activities | (1,605) | (652) | (1,388) | |||||
Cash from (used for) financing activities continuing operations | (69,547) | (40,912) | (46,813) | |||||
Cash from (used for) financing activities discontinued operations | (6,507) | 23,956 | 1,238 | |||||
Cash from (used for) financing activities | (76,054) | (16,956) | (45,575) | |||||
Effect of currency exchange rate changes on cash and equivalents | (3,464) | (3,492) | (795) | |||||
Increase (decrease) in cash and equivalents | (138) | 2,224 | 11,258 | |||||
Cash and equivalents at beginning of year | 91,017 | 88,792 | 77,533 | |||||
Cash and equivalents at end of year | 90,879 | 91,017 | 88,792 | |||||
Less cash and equivalents of discontinued operations | ||||||||
at end of year | 20,395 | 20,991 | 9,617 | |||||
Cash and equivalents of continuing operations at end of year | $ | 70,483 | $ | 70,025 | $ | 79,173 | ||
Supplemental disclosure of cash flows information | ||||||||
Cash paid during the year for interest | $ | (9,558) | $ | (9,560) | $ | (8,988) | ||
Cash recovered (paid) during the year for income taxes | (2,486) | (2,955) | (2,487) | |||||
STATEMENTOF CASH FLOWS (CONTINUED)
GE(a) | Financial Services (GE Capital) | |||||||||||||
For the years ended December 31 (In millions) | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||
Cash flows operating activities | ||||||||||||||
Net earnings (loss) | $ | (6,061) | $ | 15,182 | $ | 13,303 | $ | (15,202) | $ | 7,397 | $ | 6,256 | ||
Less net earnings (loss) attributable to noncontrolling interests | 83 | (50) | 245 | 248 | 162 | 53 | ||||||||
Net earnings (loss) attributable to the Company | (6,145) | 15,233 | 13,057 | (15,450) | 7,234 | 6,204 | ||||||||
(Earnings) loss from discontinued operations | 7,807 | (5,698) | (5,439) | 7,485 | (5,860) | (5,540) | ||||||||
Adjustments to reconcile net earnings attributable to the | ||||||||||||||
Company to cash provided from operating activities: | ||||||||||||||
Depreciation and amortization of property, | ||||||||||||||
plant and equipment | 2,473 | 2,508 | 2,449 | 2,436 | 2,529 | 2,754 | ||||||||
Earnings from continuing operations retained by GE Capital(b) | 12,284 | 1,625 | 5,321 | – | – | – | ||||||||
Deferred income taxes | (1,800) | (476) | (2,571) | 2,183 | (406) | (969) | ||||||||
Decrease (increase) in GE current receivables | 666 | (473) | (1,432) | – | – | – | ||||||||
Decrease (increase) in inventories | (282) | (877) | (1,351) | (14) | 27 | 33 | ||||||||
Increase (decrease) in accounts payable | 276 | 884 | 809 | (189) | 258 | 155 | ||||||||
Increase (decrease) in GE progress collections | (1,010) | (528) | 1,919 | – | – | – | ||||||||
All other operating activities | 2,083 | 2,973 | 1,492 | 5,087 | 2,480 | 2,596 | ||||||||
Cash from (used for) operating activities continuing operations | 16,354 | 15,171 | 14,255 | 1,537 | 6,263 | 5,232 | ||||||||
Cash from (used for) operating activities discontinued operations | (12) | (2) | (2) | 8,046 | 11,678 | 14,113 | ||||||||
Cash from (used for) operating activities | 16,342 | 15,169 | 14,253 | 9,583 | 17,941 | 19,345 | ||||||||
Cash flows investing activities | ||||||||||||||
Additions to property, plant and equipment | (3,785) | (3,970) | (3,680) | (4,237) | (3,818) | (3,274) | ||||||||
Dispositions of property, plant and equipment | 939 | 615 | 381 | 2,526 | 2,331 | 2,335 | ||||||||
Net decrease (increase) in GE Capital financing receivables | – | – | – | 226 | (161) | 3,022 | ||||||||
Proceeds from sale of discontinued operations | – | – | – | 79,615 | 232 | 528 | ||||||||
Proceeds from principal business dispositions | 1,725 | 602 | 1,316 | 532 | – | 477 | ||||||||
Proceeds from sale of equity interest in NBCU LLC | – | – | 16,699 | – | – | – | ||||||||
Net cash from (payments for) principal businesses purchased | (10,350) | (2,091) | (8,026) | (1,677) | – | – | ||||||||
All other investing activities | (1,308) | (1,062) | (1,868) | (4,690) | 24,574 | 35,756 | ||||||||
Cash from (used for) investing activities continuing operations | (12,779) | (5,906) | 4,822 | 72,295 | 23,158 | 38,844 | ||||||||
Cash from (used for) investing activities discontinued operations | 12 | 2 | 2 | (2,137) | (24,263) | (15,043) | ||||||||
Cash from (used for) investing activities | (12,767) | (5,905) | 4,823 | 70,158 | (1,105) | 23,801 | ||||||||
Cash flows financing activities | ||||||||||||||
Net increase (decrease) in borrowings (maturities of | ||||||||||||||
90 days or less) | 603 | 243 | 949 | (24,834) | (7,078) | (13,710) | ||||||||
Newly issued debt (maturities longer than 90 days) | 3,560 | 3,084 | 512 | 10,391 | 11,545 | 37,852 | ||||||||
Repayments and other reductions (maturities longer than 90 days) | (2,190) | (323) | (5,032) | (44,848) | (38,087) | (48,592) | ||||||||
Proceeds from issuance of GE Capital preferred stock | – | – | – | – | – | 990 | ||||||||
Net dispositions (purchases) of GE shares for treasury | (1,099) | (1,218) | (9,278) | – | – | – | ||||||||
Dividends paid to shareowners | (9,289) | (8,851) | (7,821) | (4,620) | (3,322) | (6,283) | ||||||||
All other financing activities | 203 | 346 | (212) | (1,362) | (679) | (878) | ||||||||
Cash from (used for) financing activities continuing operations | (8,211) | (6,719) | (20,881) | (65,273) | (37,621) | (30,621) | ||||||||
Cash from (used for) financing activities discontinued operations | – | – | – | (6,507) | 23,956 | 1,239 | ||||||||
Cash from (used for) financing activities | (8,211) | (6,719) | (20,881) | (71,780) | (13,665) | (29,382) | ||||||||
Effect of currency exchange rate changes on cash and equivalents | (908) | (312) | (22) | (2,556) | (3,180) | (773) | ||||||||
Increase (decrease) in cash and equivalents | (5,544) | 2,234 | (1,827) | 5,406 | (9) | 12,991 | ||||||||
Cash and equivalents at beginning of year | 15,916 | 13,682 | 15,509 | 75,100 | 75,109 | 62,118 | ||||||||
Cash and equivalents at end of year | 10,372 | 15,916 | 13,682 | 80,506 | 75,100 | 75,109 | ||||||||
Less cash and equivalents of discontinued operations | ||||||||||||||
at end of year | – | – | – | 20,395 | 20,991 | 9,617 | ||||||||
Cash and equivalents of continuing operations at end of year | $ | 10,372 | $ | 15,916 | $ | 13,682 | $ | 60,111 | $ | 54,109 | $ | 65,492 | ||
Supplemental disclosure of cash flows information | $ | (1,204) | $ | (1,215) | $ | (1,132) | $ | (8,884) | $ | (8,910) | $ | (8,146) | ||
Cash paid during the year for interest | ||||||||||||||
Cash recovered (paid) during the year for income taxes | (1,636) | (1,337) | (4,753) | (850) | (1,618) | 2,266 | ||||||||
CATEGORIES OF RATIOS | THE FINANCIAL RATIO CALCULATIONS | 2015 | 2014 | 2013 | 2012 | Industry Average | |
LIQUIDITY RATIOS | |||||||
Current Ratio | current assets /current liabilities | 15,972,973/10,030,702 | 1.592 | 1.543 | 1.146 | 1.036 | 1.500 |
Acid test/quick ratio | (current assets-inventories)/current liabilities | (15,972,973-329,406)/10,030,702 | 1.56 | 1.47 | 0.98 | 0.93 | 1.200 |
Cash Ratio | (cash +marketable securities)/current liabilities | (6, 259,754+122,973)/10,030,702 | 0.64 | 0.39 | 0.21 | 0.16 | 0.450 |
ASSET MANAGEMENT RATIOS | 2015 | 2014 | 2013 | 2012 | Industry Average | ||
Average collection period | Receivables/ (annual credit sales/365) | 4,938,317/(2,063,493/365) | 874 | 1,075 | 1,551 | 537 | 365.000 |
Inventory Turn over | cost of goods sold/average inventory | 2,379,616/(329,406/2) | 14.448 | 10.673 | 2.058 | 9.957 | 5.000 |
Fixed Asset Turnover | sales/average Net fixed assets | 4,585,340/(20,167,703/2) | 0.455 | 0.669 | 0.551 | 1.394 | 0.500 |
Total Asset Turnover | Sales/Average Total Assets | 4,585,340/(36,140,676/2) | 0.254 | 0.340 | 0.246 | 0.712 | 0.580 |
DEBT MANAGEMENT RATIOS | 2015 | 2014 | 2013 | 2012 | Industry Average | ||
Debt ratio | Total debt /Total Assets | 3,191,424/36,140,676 | 0.088 | 0.166 | 0.146 | 0.154 | 0.350 |
Debt -Equity Ratio | Total long term debt/Total Equity | 2,790,080/20,287,728 | 0.138 | 0.264 | 0.178 | 0.433 | 0.450 |
Interest Cover | EBIT/Interest Expenses | 2,105,361/23,073 | 91.248 | 57.487 | 110.046 | 55.404 | 25.000 |
PROFITABILITY RATIO | 2015 | 2014 | 2013 | 2012 | Industry Average | ||
Gross profit Margin | (Gross profit)/sales | 2,205,924/4,585,340 | 48.11% | 23.18% | 32.79% | 28.39% | 27.50% |
Operating Profit Margin | EBIT/Sales | 2,105,361/4,585,340 | 45.91% | 27.39% | 43.16% | 15.17% | 22.10% |
Net profit Margin | Net Income/Sales | 2,559,867/4,585,340 | 55.82% | 34.60% | 41.36% | 11.76% | 18.35% |
Return on Asset | Net income + Interest expense) /average total assets | 2,582,940/(36,140,676/2) | 14.29% | 11.92% | 10.27% | 8.56% | 9.98% |
Return on Equity | Net income /average common equity | 2,559,867/(7,862,630/2) | 65.11% | 57.65% | 56.60% | 65.64% | 50.89% |
MARKET BASED & VALUATION RATIOS | 2015 | 2014 | 2013 | 2012 | Industry Average | ||
Price Earnings ratio | Market price per share/Earning per share | 2.72/0.323 | 8.4211 | 9.5775 | 8.0000 | 9.0667 | 12.4500 |
Earnings per Share | Net income/Number of shares | 2,559,867/7,925,285 | 0.3230 | 0.2840 | 0.3400 | 0.3000 | 0.5000 |
Price: Book Value Ratio | Market price per share/book value per share | 2.72/0.99 | 2.7417 | 2.7606 | 2.2641 | 2.9755 | 3.8900 |
Price : cash flow ratio | Market price per share/Cash flow per share | 2.72/0.35 | 7.7827 | 8.7032 | 7.0240 | 6.8471 | 7.3400 |
Dividend Yield | (Dividend * 100)/Market Price per share | (0.0129*100)/2.72 | 0.4750 | 0.4176 | 0.5000 | 0.4412 | 0.5000 |
Dividend per Share | Total ordinary dividend/Number of shares | 102,394.68/7,925,285 | 0.0129 | 0.0114 | 0.0136 | 0.0120 | 0.0540 |