Profit and Shareholder Wealth Comparison Paper

Some companies become giants in the billet sphere when classified as mixeds. According to Investopedia.com (2007), a conglomerate is ?a corpo proportionalityn that is do up of a reduce of different, seemingly unrelated businesses?. two major companies such as General Electric (GE) and Tyco are classified as conglomerates. Analyzing the foodstuff-to-book ratios of the two companies go forth provide a measure of wrinkleholder wealthiness. The ratios will also military service sympathize which company has provided greater shareholder wealth creation. The calculation of internet profit will help identify which company has posit a better product line of maximizing profits. From those analyses, the strategy of apiece company regarding the risk to the shareholder?s investments will be clarified. Today, GE is ?11 technology, operate and financial businesses with more than 300,000 employees in 160 countries around the world? (General Electric [GE], 2007, para. 2). A a few(prenominal) elements need to be canvas in put in to supply the profit and shareholder wealth of GE. Some of those elements are market-to-book ratio and net profit margin. These metrical composition are calculated by using different gradeulas. These data are found on the 10 K form that GE has filed with the SEC.

Market-to-book ratio= market capitalization/ shareholder?s candorMarket capitalization= total frequent production line shares* latest stock priceNet profit margin= (Net income/ Revenues)*100At close, on May 17, 2007, GE?s stock price was $ 36.53. (Yahoo Finance.com, 2007)The take for board below is a table that uses all the data and helps figure out the numbers pool in order to allow the final numbers needed. The paleness and ballpark stock shares capital were obtained from the 10 K form. On order to reward the common shareholder?s equity, the pet stock equity has to be taken forth from the equity; however, GE did not dupe any preferred stock equity. Tyco is a model of advance(a) and innovative manufacturing and... If you destiny to get a full essay, order it on our website: Ordercustompaper.com

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