General Electric, A Worldwide Conglomerate Corporation

1728 WordsDec 7, 20157 Pages
General Electric, a worldwide conglomerate corporation, was founded in 1892 in New York. Currently, the GE headquarters remains in Schenectady, New York, and have a second location in Fairfield, CT. As a publicly traded company, GE is one of the “original twelve” on the Dow Jones Index; the only one left remaining there today, 119 years later. In addition to the Dow, General Electric is also a member of the S&P 500. As of 2015, the company operates through the following business divisions: power and water, oil and gas, energy management, aviation, healthcare, transportation, capital, and digital. The products general electric manufactures include: aircraft engines, electrical distribution, electric motors, energy, finance,…show more content…
A company, like General Electric, that has a positive current ratio greater than 1, will also have a positive net working capital. Net working capital assesses a company’s ability to pay off short term obligations. General Electric, along with their industry, both have the ability to meet short term commitments and liquidate assets easily. Activity ratios have the capability to show how efficient, or inefficient, a company is operating. Receivables turnover ratio indicates the level of efficiency with managing credit given to customers and the collection period. Using their recent third quarter data, I calculated that General Electric has a receivables turnover ratio of .80. That isn’t awful, but their industry is preforming at a much higher level of 1.8. Essentially, GE is not collecting payments as fast, and are less efficient than their market competitors. On the other hand, there is also inventory turnover. This ratio is set up to show how many times a period a company is selling out of merchandise. Here is where General Electric is very close to the industry average. GE has an inventory turnover of 4.2, compared to the industry at 4.4. The higher the ratio, the more effective a business stands. Lastly, total asset turnover is “used to measure how efficiently your business uses its assets to generate sales” (Avenir). GE possesses a ratio of .14, much lower than the industry
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