Use a copy of the most recent annual report for General Electric. Then, use the information contained in the balance sheet and the income statement to answer the questions below in addition to discussing the changes in the dollar amounts reported in the current annual reporting period as compared to the previous annual reporting period.
The notes to the financial statements and any other relevant information in the annual report can be used to expand on the dollar amounts and the changes in these amounts presented in the financial statements. The answers to each question above must include mention of the financial statement (balance sheet, income statement, etc.) and any other information in the annual report that was used to answer the question.
a. What were the company's total current assets at the end of its most recent annual reporting period?
b. What were the company's total current assets at the end of the previous annual reporting period?
c. Are the assets included under the company's current assets listed in the proper order? Explain.
d. How are the company's assets classified?
e. What are cash equivalents?
f. What were the companies total current liabilities at the end of its most recent annual reporting period?
g.What were the companies total current liabilities at the end of the previous annual reporting period?
a. Total current assets at end of 2007=$96,331,000,000
b. Total current assets at end of 2006=$87,456,000,000
From the balance sheet, answers a. and b. detail the fact that total current assets increased over 10% from 2006 and 2007. The largest portion of this increase came by way of increased net receivables. This fact suggests that, perhaps, the firm has become more lax in its credit policy and could potentially create more bad debt write off in the future. Although not yet certainty, the fact must be carefully considered when and if the firm touts its increased revenues over the same periods (from $163,391,000,000 in 2006 to $172,738,000,000 in 2007-see income ...
The solution is a financial analysis of General Electric (GE).
Ratios Analysis for General Electric
Find General Electric's Annual report.
Calculate the following ratios for the company:
Return on assets
Return on equity
Gross profit margin
Debt to equity ratio
Total asset turnover
Price earnings ratio
Using the calculated ratios, analyze the financial performance of the firm. Use the ratios to make comparisons between itself in previous periods as well as against competitors, determine the firm's performance. Write a memo to the CEO detailing the following:
An explanation of the calculated ratios.
Address other methods of analyzing financial statements aside from ratio analysis.
Explain analysis of the firm, and recommendations for improvement.