Obtain the required information about GE’s industrial cash flow from operating a
ID: 2653277 • Letter: O
Question
Obtain the required information about GE’s industrial cash flow from operating activities using the annual reports of GE for the years 2011 thru 2014. These can be obtained from the GE website or the SEC website. State the industrial cash flow from operating activities numbers for the four years (2011 thru 2014) and the sources from which you obtained the numbers and the page numbers in those sources
Obtain the required information about the shareholder return of GE and the return on the S&P 500 starting on 1/1/2011 and ending on December 31, 2014. State the numbers for GE and S&P 500 and the source from which you obtained the numbers. Yahoo Finance is a good website to obtain these numbers. Do you know how to calculate the return on a stock? Remember your Finance class?
Based on the data you obtained in (b) above, state whether the cumulative industrial cash flow from operating activities performance target has been met. Show all computations
Based on the data you obtained in (c) above, state whether the shareholder return performance target has been met. Show all computations
Explanation / Answer
The above cash flows can be obtained by using the below link :
https://www.stock-analysis-on.net/NYSE/Company/General-Electric-Co/Financial-Statement/Statement-of-Cash-Flows
Looking at the cash flow from operating activities from 2011 to 2014, there has been little increase in cash flow from operating activities, however Year 2012 was an exception as the cash flow that year registered an increase of 47% as compared to the last year. Hence, we cannot describe the given scenario as meeting the expectation of the shareholders.Apart from that, stock returns listed below also shows a dismal peformance in 2014 as compared to previous returns. Hence, the peformance cannot be called satisfactory.
General Electric Company (GE) Yearly Stock Returns
Year
Beginning Price
Ending Price
Gain or Loss
Percent Gain or Loss
2011
18.29
17.91
-0.38
-2.08%
2012
17.91
20.99
3.08
17.20%
2013
20.99
28.03
7.04
33.54%
2014
28.03
25.27
-2.76
-9.85%
12 months ended Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Net earnings 15,183 13,302 13,801 14,316 Net (earnings) loss attributable to noncontrolling interests 50 -245 -160 -165 Net earnings attributable to the Company 15,233 13,057 13,641 14,151 (Earnings) loss from discontinued operations 112 2,120 1,038 -77 Depreciation and amortization of property, plant and equipment 2,508 2,449 2,291 2,068 Earnings from continuing operations retained by GECC -4,341 -2,273 -975 -6,432 Deferred income taxes -476 -2,571 -294 -327 (Increase) decrease in GE current receivables -473 -1,432 1,210 -390 (Increase) decrease in inventories -877 -1,351 -1,204 -1,122 Increase (decrease) in accounts payable 884 809 158 1,938 Increase (decrease) in GE progress collections -528 1,919 -920 -1,146 (Increase) decrease in operating capital -994 -55 -756 -720 All other operating activities 3,129 1,528 2,881 3,394 Adjustments to reconcile net earnings attributable to the Company to cash provided from operating activities -174 -922 3,147 -2,017 Cash from operating activities 15,171 14,255 17,826 12,057 Additions to property, plant and equipment -3,970 -3,680 -3,937 -2,957 Proceeds from principal business dispositions 602 1,316 540 6,254 Proceeds from sale of equity interest in NBCU LLC – 16,699 – – Net payments for principal businesses purchased -2,091 -8,026 -1,456 -11,152 All other investing activities -447 -1,488 -564 -384 Cash (used for) from investing activities -5,906 4,821 -5,417 -8,239 Net increase (decrease) in borrowings, maturities of 90 days or less 243 949 -890 1,058 Newly issued debt, maturities longer than 90 days 3,084 512 6,961 177 Repayments and other reductions, maturities longer than 90 days -323 -5,032 -34 -270 Repayment of preferred stock – – – -3,300 Open market purchases under share repurchase program -2,211 -10,225 -5,005 -2,065 Other purchases -49 -91 -110 -100 Dispositions 1,042 1,038 951 709 Net (purchases) dispositions of GE shares for treasury -1,218 -9,278 -4,164 -1,456 Dividends paid to shareowners -8,851 -7,821 -7,189 -6,458 Purchases of subsidiary shares from noncontrolling interests – – – -4,303 All other financing activities 346 -211 32 -75 Cash used for financing activities -6,719 -20,881 -5,284 -14,627 Cash from (used for) operating activities, discontinued operations -2 -2 – – Cash (used for) from investing activities, discontinued operations 2 2 – – Discontinued operations – – – – Effect of currency exchange rate changes on cash and equivalents -312 -22 2 -50 Increase (decrease) in cash and equivalents 2,234 -1,827 7,127 -10,859 Cash and equivalents at beginning of year 13,682 15,509 8,382 19,241 Cash and equivalents at end of year 15,916 13,682 15,509 8,382Related Questions
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