Md.

Farhad Kabir
7084590528
MBA 2023 Core C

Financial Accounting
Acc 510

1. Give GE’s Balance Sheet Equation at December 31, 2012 using dollar amounts.
Answer: Asset = Liabilities+ Equity = (556,858+128,470) million USD = 658,328
2. Is GE’s Total Stockholder’s Equity (i.e., “Book Value”) the same as their market value
(i.e., the value on Wall Street) at December 31, 2012? Why or why not?
Answer: Total Stockholder’s Equity: $ 128.47 Billion
Market Cap on 31st December 2012: $ 218.41 Billion
Book Value is the current financial condition of the company. It doesn’t account
for the future growth of the company whereas Market cap is determined by the market
sentiments and projected growth.
3. What is GE’s Retained Earnings at December 31, 2012? At December 31, 2011? What
is GE doing with most of its Net Earnings – retaining it for use in the business or paying
it out as dividends?
Answer: GE’s Retained Earnings on December 31st 2012 : $ 144,055 million
on December 31st 2011 : $ 137,786 million
Net Earnings - 13,641 Mn USD
Dividend - 7,372 Mn USD (54.04% of 13,641)
More than 50% of the net earnings is given back in form of dividends.
4. What is GE’s Net Earnings for fiscal 2012? What is GE’s Earnings-Per-Share (after
accounting changes) for fiscal 2012?
Answer: GE’s Net Earnings for fiscal year 2012: $13,641 (page 72) , Diluted EPS: $1.29
5. Does GE’s Net Earnings for fiscal 2012 equal their Cash from Operating Activities for
fiscal 2012? Why or why not?
- Answer: No, It’s not. Because cash from operating activities (31,331 Mn USD) is a
different number. Reason – Because net earnings do consider depreciation, amortization,
and other non-operation flow-based cash activities.
6. How much cash does GE have on hand at December 31, 2012? How does this compare
to the cash on hand at December 31, 2011? What are the major sources and uses of cash
during fiscal year 2012?
Answer:
Cash and Cash Equivalents (2012) - $ 77,356 million
Cash and Cash Equivalents (2011) - $ 84,501 million
One of the primary reason is there is a deficit of $ 40 billion because they made
repayments of their maturing liabilities upto $ 103 billion and, also, raised fresh cash
approximately $ 63 billion in the 2012 financial year.
7. What did GE’s auditor’s conclude about GE’s 2012 Financial Statements? Is there
anything unusual about the auditor’s report?
Answer:
They concluded that GE’s financial statements are to be considered that they have
reconsidered their evaluation of the revenues of their subsidiaries where they have a
controlling interest (GECC) in the GE’s consolidated statement.