What lessons were learned from the financial crisis

Assignment Help Finance Basics

Reference no: EM13835982

1- I want you to write about the company history.

2- Summary the case and put it as time line in pp slide as the power point attached.(PP)

3- I want you to calculate the financial ratios (2011,2010, 2009) and attached the ratios required

Case: General Electric, GE Capital and the Financial Crisis of 2008: The Best of the Worst in the Financial Sector?

CASE ABSTRACT

The financial services industry was, by definition, volatile, and GE Capital was particularly hard hit by the economic recession of 2008. With the credit markets illiquid and financial markets falling, GE Capital found that it was overexposed to commercial real estate and foreign residential mortgages. At this point, GE's parent corporation stepped in, began reorganizing GE Capital, and significantly downsized the unit. GE Capital sold most of its insurance lines, completely left the US mortgage market, and substantially tightened its consumer underwriting guidelines. However, the company still was on the lookout for underpriced assets, and purchased several lending lines from even more troubled Citigroup and a large commercial real estate portfolio from Merrill Lynch financing.

By 2012, GE Capital was smaller, leaner, and more focused on specialty financing especially mid-market lending and leasing. However, like its parent company, GE Capital hoped to see continued sustainable earnings growth with growing margins and lower portfolio risk, and to return money to investors and resume paying dividends to its parent company.

CASE OBJECTIVES

1. To discuss the financial crisis of 2008.

2. To discuss the mortgage crisis of 2008.

3. To discuss domestic/international growth opportunities.

4. To discuss dividend policy.

5. To discuss divestiture.

DISCUSSION QUESTIONS

1. Should GE eliminate GE Capital?

2. Should GE focus only on Industrial Products?

3. Should GE simply reduce the role of GE Capital?

4. What Lessons were learned from the Financial Crisis?

5. Should GE continue to increase its dividend or pursue non financial acquisitions?

6. Was the financial crisis a "blessing in disguise" for GE?1-Computing Liquidity Ratios

7. Computing Long-term Solvency Ratios

8. Computing Coverage Ratios

9. Computing Inventory Ratios

10. Computing Receivables Ratios

11. Computing Total Asset Turnover

12. Computing Profitability Measures

13. Computing Market Value Measures

Reference no: EM13835982

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