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.