This is a chart in Ycharts.com for GE how do I explain this or what does it mean

Question

This is a chart in Ycharts.com for GE how do I explain this or what does it mean what formulas are used to calculate all this?

Income (5 Year Growth) 2013-12 14.67% General and Administrative Expense 41.06% Special Income and Charges Provision for Doubtful Accounts Operating Interest Expense Other Operating Expenses Total Operating Expenses 19.89% 19.25% 19.43% Non-Operating Interest Expense Other Income and Expenses Pre-Tax Income Provision for Income Taxes Income from Continuing Operations Income from Discontinued Operations 2 Normal ized Income -50.01%

Explanation / Answer

The chart you are referring to has not been included it can be a technical chart or a fundamental chart. The basic chart shows stock price, in fact most charts show stock price only, but the interpretations can be many, on the basis of representation and analysis. Fundamental charts indicates the historical price of the stock with the high and low achieved, based on the period for which the chart is being studied, this can be hourly daily, weekly, monthly etc. This enables us to analyse the price movements, and arrive at an accurate forecast for profit and future price movements. Charts can be used for overall evaluation of the performance. This is understood through calculation of fair value of the stock. Difference in the stock price indicate whether an investor needs to by the stock accumulate the stock or sell the stock. Changes in price can be correlated with events internal or external. Release of financial results for example, may cause substantial change in price, up or down based on the results.Fundamental charts can contain all fundamental quantitative analysis metrics alongwith comparative charts of competitors for informed decision making.

All analytics behind a companies fundamentals are aimed at arriving at the real worth of a stock. All stock purchase and stock sale decisions based on whether the stock is undervalued, in comparison to its intrinsic value, or is overvalued, on the stock exchange. When a stock is undervalued it is considered the right time to invest in it as the market price is bound to catch up with the true value of the stock. This valuation consider a company's work based on discounted cash flows which is the future profits of a company summed up with factoring in of loss of value of money with time. The logic behind basing the value of a stock on future profits the company can generate is that this ability can convert in cash flow for investors. The basis in simple language is what every business all over the world is based on namely, profitability. Intrinsic value basis is simply all revenue after deduction of all related expenses.

The intrinsic value of a stock which is higher than the present market capitalisation is an indicator of the stock being a good buy capable of generating excellent returns. The discounted cash flow theory is based on consideration of certain factors which compose the intrinsic value. Some of these factors can be listed as: growth rate representing the rate at which earnings are expected to grow in the next five years, cash flow which represents the profit available for distribution among shareholders, assuming all profits are to be distributed and not utilised elsewhere. Discount factor which implements the time value of money into the present value of the cash flow. The present value of the firm depicted by the intrinsic value of the business in five years. The capitalisation rate which accounts for the discount rate for a constantly growing value of capitalisation denoting market cap of the company in future years. All these factors are given due consideration and calculations are based on each value being calculated for every year from the present up to five years from now.

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