Using GE and the following link: https://www.sec.gov/Archives/edgar/data/40545/0

Question

Using GE and the following link: https://www.sec.gov/Archives/edgar/data/40545/000004054517000010/ge10k2016.htm

Comment on whether the financing for the investment in assets primarily comes from liabilities or stockholders equity.

What are the major revenue and expense accounts on the most recent income statement?

What percentage of revenues go toward covering expenses and what percentage of revenues are in excess of expenses (i.e. the net profit margin expressed as a percentage).

What are the total liabilities at the end of the most current year?

Did the company report any prepaid expenses? If so, list the amount.

Explanation / Answer

Solution:-
(All amount are in million)

Investment in assets for GE comes primarily from liabilities. It is clear from the fact that amount of liabilities for 2016 is $284,668 while equity for the period is only $77,491.
Major sources of revenue in the current year are sale of goods and sale of services while major expenses for the current year are for cost of goods sold, cost of services sold, selling, general and administration expenses.

Net earnings for the current year is are $8,540 while total revenue for the year is $123,693. So net profit margin is 6.90% (8,540 / 123,693). Percentage of revenue that goes towards covering expenses is 93.10% (100% - 6.90%).

Total liabilities of the company at the end of the most current year = $284,668

There are no prepaid expenses in the balance sheet of the company.

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