subject: Disclosure Analysis for General Electric Part II [print this page] Disclosure Analysis for General Electric Part II
In 2007, raw materials and work in process made up $7.9 billion or about 59 percent, of total inventories before LIFO revaluation. Finished goods comprised of $5 billion close to 37 percent, while unbilled shipments, at $539 million, made up 4 percent of the $13.5 billion total inventories prior to LIFO revaluation. 2007 inventories are equal to $12.8 billion after LIFO revaluation of $623 million was deducted. Inventories equate to 1.6 percent of total assets.
GE Receivables
GE's receivables include GE Industrial customer receivables factored through a GECS affiliate, which is reported as financing receivables. "GE receivables balances at December 31, 2007 and 2006, before allowance for losses, included $11 billion and 8.8 billion, respectively, from sales of goods and services to customers, and $381 million and $175 million at December 31, 2007 and 2006, respectively, from transactions with associated companies."
Infrastructure receivables in 2007 was $11 billion, healthcare $4.5 billion, NBC Universal $3.8 billion, Industrial $2.9 billion, and corporate items and eliminations was $526 million. Total current receivables make up 2.8 percent of total assets for the year.
While the focus of this paper is to analyze GE's cash and cash equivalents, inventories, and receivables, it is worth noting that these assets only make up about 6.4 percent of GE's $795 billion in total assets for the year ended. The large majority of GE's assets are derived from financing receivables. Financing receivables consisted of $378 billion, or just under 47 percent of the firm's total assets.
Cash and cash equivalents are disclosed as debt securities with original maturities of three months or less. Inventories are described as being stated at the lower of cost or current market values. While GE's receivables are listed as GE Industrial customer receivables factored through a GECS affiliate. By analyzing these specific components of GE's assets it is possible for financial report users to speculate as to which of GE's sectors is responsible for the earnings.
