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Equity, Cash Flow, And Notes Analysis

When evaluating a business's financial statements, there are many key factors that may lead to certain conclusions, however, one that is often overlooked is the cyclic nature of the economy and the company. GE's lengthy history, beginning in 1878, and as the only remaining original company listed on the Dow Jones Industrial Index since 1896, proves that it has a strong background and products (www.ge.com/en). In evaluating the financial status of the company, the team will explain the fundamental principles behind the statements we are considering and extrapolate information from them. First we will review the Statements of Owners' Equity and Cash Flows, where we will discover that they are increasing at a relatively consistent rate. After which, we will analyze the changes, why they occurred, and how they may guide future decisions for GE executives. In supplement to these tools, we will also review the financial statements and others tools' potential insights for decision-making.
As we evaluate the financial position of GE, we must keep in mind the purpose of the different data and their implications. The Statement of Owners' Equity is a valuable tool for investors and must be strong if GE intends to attract more stockholders. Equally valuable to investors is the Statement of Cash Flows, which let them know where the money is going. This is especially important when profits are lower because it can convey major purchases that will ultimately lead to higher profits and are only a short-term expense.
Statement of Changes
The Statement of Cash Flows contains three sections, operating activities, investing activities, and financing activities. The primary purpose of the Statement of Cash Flows is to provide relevant information about the cash inflows and outflows of a business during a specific period of time (http://instructional1.calstatela.edu/jotto/chapt3.doc). GE's statement of cash flows is no different. Below are the specific components of...