Segmental Disclosures In the Appendix to this chapter, the partial segmental disclosures for General Electric (GE) are
Question:
Segmental Disclosures
In the Appendix to this chapter, the partial segmental disclosures for General Electric (GE) are provided.
1. How does GE organize and present its segment data?
2. Compute the following ratios for 2008, 2009, and 2010 for each segment reported.
a. Segment profit percentage = (segment profit/segment revenue)
b. Segment asset turnover = (segment revenue/segment assets)
3. Compute the growth rate for each segment for revenues and assets from 2008 to 2010.
For example, the formula for revenue growth rate is:
Growth rate in revenues = Revenues for 2010/ Revenues for 2008 - 1
4. Evaluate each segment’s performance using the computations from questions 2 and 3.
Which segment performed the best and which segment performed the worst?
5. What percentage of GE’s total revenues and assets are based outside the United States?
Can you determine from the disclosures whether the trend is toward more or less globalization? Comment on the trend to the extent feasible.
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
Step by Step Answer:
1 2 GE organizes the segment data based on the nature of markets and customers and 3 Growth Rate REVENUES 2010 2009 2008 2007 2006 20082010 Energy Infrastructure 37514 40648 43046 34880 28816 1285 Tec...View the full answer
