Ramirez Guzman-Week 4-Summative Assessment-Financial Market Shareholder Analysis

docx

School

University of Phoenix *

*We aren’t endorsed by this school

Course

MBA

Subject

Finance

Date

Jan 9, 2024

Type

docx

Pages

Uploaded by SargentTeam8460

FINANCIAL MARKET SHAREHOLDER ANALYSIS 1 Summative Assessment: Financial Market Shareholder Analysis Marisela Ramirez Guzman FIN/571: Corporate Finance University of Phoenix Professor: David Tucker October 30 th , 2023

FINANCIAL MARKET SHAREHOLDER ANALYSIS 2 Financial Market Shareholder Analysis General Electric, Co. General Electric Company, also known as GE, is an organization that is considered a strong franchise that is leading positions in growth in critical sectors by investing in innovation to solve customer needs at a global level. Also, GE concentrates on developing close customer relationships, growing installed bases, and essential services to continue developing sustainable financial performance, revenue increase, margin expansion and earnings growth. GE maintains a solid balance sheet & cash of position that supports a greater capital deployment for organic and inorganic growth. By implementing a plan to create three companies a natural evolution, the organization can be positioned to a full potential. (GE, 2022) GE has been in business for more than 100-year run. Unfortunately, in 2008, the organization had a financial crisis that led to a new way of diversification by incorporating 3 different branches of innovation making the organization a diversified conglomerate and stock- marker winner, while creating a focus on short-term performance and financial engineering. (Hansen, 2022). GE continued with a rapid decline during the Great Recession. This caused the drop of the last original component of the DJIA from the index, after years of bad performance and loss in revenue. In 2021, the organization announced plans of dividing into three independent companies that specialize in different areas of business which includes aircraft engines, medical equipment, and power turbines. (Hansen, 2022). In 2020, the development of Covid-19 pandemic affected the share price by making the stock fall to $43.92, reflecting a 28- year low. GE’s aviation unit was the most affected area of the organization. The aircraft engines business generated $32.9 billion in revenue in 2019,

FINANCIAL MARKET SHAREHOLDER ANALYSIS 3 reflecting more than 34% of GE’s total. Even though the pandemic travel curbs affected the organization, the demand for aircraft engines and related maintenance increased. The aviation sector started to be laying off 10% of its workers in March 2020. (Hansen, 2022). In 2021, GE shares rose 9.3% during a possible global recovery. In May of the same year, the organization announced an opportunity of merging its GE Capital aviation Services (GECAS) aircraft leasing unit with AerCap Holdings (AER), which was successfully completed in November of 2021. This transaction generated about $23 billion in cash proceeds in addition to a 46% stake in the new combined business (Hansen, 2022). GE, in November 2021, announced a plan to separate into three independent public companies. One of the companies will concentrate on aviation business, the second one in medical equipment unit and the last one in power turbines business. The organization’s health care spinoff is planned to come out this year, which is 2023. In early 2024, the manufacture turbines for power plants and wind farms will separate with the idea of GE focus on its remaining aviation business. (Hansen, 2022). General Electric share price fell more than 10% on April 26, 2022, to a 17-month low after the company warned fiscal 2022 annual earnings were leading toward the low end of the range that GE set for three months earlier due to inflation and other increasing issues. (Hansen, 2022). In conclusion, even though GE has been economically struggling, it continues to grow in its three main business sectors, employing 175,000 workers around the world and operating in 130 countries. The issue is that its size is not working in its favor. In fact, breaking up will help, though GE investors should be aware of the risk of restructuring the organization. (Hansen, 2022). GE electric has demonstrated the ability of adapting and restructuring business based on

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

FINANCIAL MARKET SHAREHOLDER ANALYSIS 4 the consumers’ needs and industry demands; Therefore, GE is a good way of investing, but it may take a while to generate earnings. By splitting the organization again, GE can achieve financial health that is stable and has the ability of generating revenue. The organization has been suffering from several issues, but it has demonstrated the ability to recover by changing its operations concentration.

FINANCIAL MARKET SHAREHOLDER ANALYSIS 5 References GE, Company. (2022). GE2022 Company Overview. Retrieved from: https://www.ge.com/sites/default/files/ge-company-overview.pdf Hansen, S. (2022) The Rise and Fall of General Electric (GE). Retrieved from: https://www.investopedia.com/insights/rise-and-fall-ge/ Yahoo Finance. (2023). General Electric Company (GE). Retrieved from: https://finance.yahoo.com/quote/GE?p=GE