Stock Analysis on Net
Stock Analysis on Net
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General Electric Co. (NYSE:GE)

Analysis of Investments

Advanced level


Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

General Electric Co., adjustment to net earnings (loss) attributable to the Company

US$ in millions

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12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net earnings (loss) attributable to the Company (as reported) (4,979) (22,355) (5,786) 8,831  (6,126)
Add: Investment securities 100  64  (775) 203  (553)
Net earnings (loss) attributable to the Company (adjusted) (4,879) (22,291) (6,561) 9,034  (6,679)

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26).


Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)

General Electric Co., adjusted profitability ratios

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net Profit Margin
Reported net profit margin -5.69% -19.69% -5.11% 8.00% -5.79%
Adjusted net profit margin -5.58% -19.63% -5.80% 8.18% -6.31%
Return on Equity (ROE)
Reported ROE -17.58% -72.16% -9.00% 11.65% -6.23%
Adjusted ROE -17.23% -71.95% -10.21% 11.91% -6.80%
Return on Assets (ROA)
Reported ROA -1.87% -7.23% -1.53% 2.42% -1.24%
Adjusted ROA -1.83% -7.21% -1.74% 2.47% -1.36%

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26).

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. General Electric Co.’s adjusted net profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. General Electric Co.’s adjusted ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. General Electric Co.’s adjusted ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

General Electric Co., Profitability Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company (4,979) (22,355) (5,786) 8,831  (6,126)
Sales of goods and services 87,487  113,544  113,192  110,390  105,808 
Profitability Ratio
Net profit margin1 -5.69% -19.69% -5.11% 8.00% -5.79%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to the Company (4,879) (22,291) (6,561) 9,034  (6,679)
Sales of goods and services 87,487  113,544  113,192  110,390  105,808 
Profitability Ratio
Adjusted net profit margin2 -5.58% -19.63% -5.80% 8.18% -6.31%

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26).

2019 Calculations

1 Net profit margin = 100 × Net earnings (loss) attributable to the Company ÷ Sales of goods and services
= 100 × -4,979 ÷ 87,487 = -5.69%

2 Adjusted net profit margin = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Sales of goods and services
= 100 × -4,879 ÷ 87,487 = -5.58%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. General Electric Co.’s adjusted net profit margin ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Adjusted Return on Equity (ROE)

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company (4,979) (22,355) (5,786) 8,831  (6,126)
Total GE shareholders’ equity 28,316  30,981  64,263  75,828  98,274 
Profitability Ratio
ROE1 -17.58% -72.16% -9.00% 11.65% -6.23%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to the Company (4,879) (22,291) (6,561) 9,034  (6,679)
Total GE shareholders’ equity 28,316  30,981  64,263  75,828  98,274 
Profitability Ratio
Adjusted ROE2 -17.23% -71.95% -10.21% 11.91% -6.80%

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26).

2019 Calculations

1 ROE = 100 × Net earnings (loss) attributable to the Company ÷ Total GE shareholders’ equity
= 100 × -4,979 ÷ 28,316 = -17.58%

2 Adjusted ROE = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Total GE shareholders’ equity
= 100 × -4,879 ÷ 28,316 = -17.23%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. General Electric Co.’s adjusted ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Adjusted Return on Assets (ROA)

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company (4,979) (22,355) (5,786) 8,831  (6,126)
Total assets 266,048  309,129  377,945  365,183  492,692 
Profitability Ratio
ROA1 -1.87% -7.23% -1.53% 2.42% -1.24%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to the Company (4,879) (22,291) (6,561) 9,034  (6,679)
Total assets 266,048  309,129  377,945  365,183  492,692 
Profitability Ratio
Adjusted ROA2 -1.83% -7.21% -1.74% 2.47% -1.36%

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26).

2019 Calculations

1 ROA = 100 × Net earnings (loss) attributable to the Company ÷ Total assets
= 100 × -4,979 ÷ 266,048 = -1.87%

2 Adjusted ROA = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Total assets
= 100 × -4,879 ÷ 266,048 = -1.83%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. General Electric Co.’s adjusted ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.