Financial Analysis of General Electric CO - Essay Example

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. Appendix1. 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 1002.

Gross Profit Ratio = (Gross Profit) / Total Revenues) x 1002006: (89,281 / 163, 391) x 100 ; 2005: (81,142 / 147,956) x 1003. Return on Equity (ROE) = {Profit after taxes / Shareholder's Equity }x 1002006: (20,666 / 112,314) x 100 ; 2005: (18,661 / 109,351) x 1004. 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 Liabilities2006: (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 /