Pro-Forma and Business Cycle Research Paper Essay Example for Free

Pro-Forma and condescension Cycle explore Paper EssayThis report allow for comp ar the pro-forma m hotshottary statement of two companies bank of the States and General Electric in any case-known as GE. It will describe and summarize the comparison of both organizations and their fiscal stability. It will also detail the typical product line regular recurrence of these two companies.Pro-Forma Financial of General Electric and imprecate of the StatesGeneral Electric and Bank of America are two companies in the US that are competing to increase their sales, as well as their income in order to increase profits. Both companies are real strong financially GE is an agglomerates industry with a market capital of $259.56 one thousand million and Bank of America one of the major financial institutions with a market capital of $183.25 billion. Both companies make an effort to alter their bottom figures in each financial year. Bank of America had some merging and restructuring expenses in 2008, plainly was still showing remarkable pay. However in the latest first-quarter 2014 report, a net loss of $276 jillion was published. In 2014, GE decided to acquire the power and Grid logical argument of Alstom. GE expects the deal to be accretive to earnings in the first year. (www.businesswire.com, 2014).Financial Viability and Ratio abbreviation of General Electric accord to the GE third-quarter 2014 annual report, the organization is performing well and has experienced profit growth since 2013 in the pursuance areas operating earnings, revenues, industrial segment profits, industrial segment organic revenue, and growth market orders. In addition, rising technologies sparked an increase in equipment orders. Likewise, the organization has a strategy in place that has created growth in operate business. GE will continue to simplify ope symmetryns and focus on the needs of its consumers. Furthermore, GE is go along to gain approval to acquire Alstom Power and Grid businesses.This acquisition is expected to takeplace in 2015. The acquisition is expected to increase GEs cost per share and it will help GE obtain its goal of receiving most of its earnings through industrial businesses. (GE Reports Third-Quarter 2014, 2013) A balance analysis is a quantitative analysis of information contained in a guilds financial statements. (Definition of Ratio Analysis, 2014) It is employ to evaluate various aspects of a companys operating and financial performance such as its efficiency, liquidity, profitability and solvency (Definition of Ratio Analysis, 2014). This is a great tool to calculate how the company is doing over a authorized amount of time.GEs efficiency ratio for days inventory, for example, was 54.76, however in 2013, it was 77.36. Receivables perturbation was another huge improvement from 2004, at 12.21, to 2013 at 6.81(General Electric Co, 2014). GEs short condition debt has decreased from 21.02% in 2004 to 13.24% in 2013 howev er the long term debt has increased, with 28.41% in 2004, and 36.97% in 2013. The current ratio has also improved with 2.39 in 2004, and 2.53 in 2013, this is a big win for GE (General Electric Co, 2014) This shows that the company is more able to pay debts and short term obligations than when it first began (Current Ratio Definition, 2014).Financial Viability and Ratio Analysis of Bank of AmericaIn order to know the financial health of an organization, it is imperative to know the organizations financial viability. We have looked at the financial viability for Bank of America and find it to be a viable company. We looked at Bank of Americas Return on Investment (ROI) which is calculated by looking at Bank of Americas periodical return compared to the total investment we need for a project. Bank of Americas Revenue was 98,353 million with Net Income at 5,222 million for the year ending 2013. Total liabilities were 1,884,932 million with 2,123,613 million in total assets (Bank of Am erica, 2014). Bank of Americas operative capital ratio is 1.126 which shows us that is able to have enough cash to repay debts. Bank of Americas debt ratio is .8876 which shows that this company can repay long term debt. These few ratios help us see that this business is able to generate enough surpluses in order to meet their recurring payment obligation which also verifies the companys viability (Bank of America, 2014).Business CycleA business cycle is the growth or decline in an economy. As of today the economy has grown from the recession in September 2008 that left many people without jobs, the well-worn market plunges and many companies going bankrupt and closing. Furthermore, the goal of economic policy is to keep the economy in a healthy growth rate that create jobs for people, but slow enough to avoid inflation. some factors can cause an economy to spin out of control, or settle into depression. The most important, over-riding factor is boldness of investors, consumers, businesses and politicians. The economy grows when there is confidence in the future and in policymakers, and does the opposite when confidence drops (Amadeo, 2014). Recent banking trends aver subtle indications about the business cycle. The financial crisis in 2008 stemmed from explosive monetary policy during the antecedent period (Hofschire, 2014).During the financial crisis in 2008 it left a lot of companies wondering if they will ever rule back to where they were before the market plunged. Financial institutions, such as Bank of America made it delicate for home buyers to take out loans to purchase properties. Although the housing market dropped, it was harder to qualify for loans because the qualifications were stricter. Furthermore, home owners were in top of the inning loans because they could not afford to pay back the loans. During the financial crisis in 2008 General Electric (GE) was one of the major companies that produced numerous of appliances, such as refrigera tors, stoves, microwaves and much more.However, they took a huge financial loss as their earnings started to decrease as sale prices declined (Smith, 2008). General Electric said profits from its money and commercial pay divisions should total $2 billion in the third quarter, down nearly 20 percent from $2.45 billion in the second quarter (Smith, 2008). General Electric Capital is a large contributor to the companys world(a) earnings. Furthermore, General Electric had to give up some assets to raise their capital. As of today GE is one of the largest companies, which generate home appliances and they were able to overcome the financial crisis and regain their financial earnings.ConclusionThis report shows that both GE and Bank of America are seeing steady growth and are slowly convalescent from the recession. Both GE and Bank of Americaseem to be in the expansion part of the business cycle as sales would project. GE has improved in its current ratio between 2004 and 2013, and Bank of American still needs to improve its current ratio. Both companies have seen an increase in many areas of their financials and plan to continue to increase sales and profits.ReferencesAlstom Board Chooses GE Offer. (2014, June 21). Retrieved November 29, 2014, from www.businesswire.com http//www.businesswire.com/news/home/20140621005026/en/Alstom-Board-Chooses-GE-Offer.VHu2r-8g9es Amadeo, K. (2014). What Is the Business Cycle? Retrieved November 30, 2014, from useconomy.about.com http//useconomy.about.com/od/glossary/g/business_cycle.htm Bank of America. (2014, May). Retrieved November 30, 2014, from www.forbes.com http//www.forbes.com/companies/bank-of-america/ Current Ratio. (2014). Retrieved November 30, 2014, from www.investopedia.com http//www.investopedia.com/terms/c/currentratio.asp GE news. (2014, October 17). Retrieved November 30, 2014, from www.genewsroom.com www.genewsroom.com/press-releases/ge-reports-3q%E2%80%9914-operating-eps-038-6-3q-industrial-profit-9-operating- margins-90 General Electric. (2014, May). Retrieved November 30, 2014, from www.forbes.com http//www.forbes.com/companies/general-electric/ General Electric. (2014, November 28). Retrieved November 30, 2014, from financials.morningstar.com http//financials.morningstar.com/ratios/r.html?t=GE Ratio Analysis. (2014). Retrieved November 30, 2014, from www.investopedia.com http//www.investopedia.com/terms/r/ratioanalysis.asp Schire, D. H. (2014, February 28). March business cycle update. Retrieved November 30, 2014, from www.fidelity.com https//www.fidelity.com/viewpoints/market-and-economic-insights/economy-update-march-14 Smith, A. (2008, October 9). Wall Street crisis hits GE. Retrieved November 30, 2014, from money.cnn.com http//money.cnn.com/2008/10/09/news/companies/ge_earnings/ Walker, A., McEntire, L. (2014). Investor Relations. Retrieved November 29, 2014, from www.bankofamerica.com http//investor.bankofamerica.com/phoenix.zhtml?c=71595p=irol-newsArticleID