This website uses cookies to ensure you have the best experience. Learn more

Profit And Shareholder Wealth Comparison Paper: General Electric And Tyco

862 words - 3 pages

General Electric and Tyco International are classified as conglomerates with each approaching their business strategies differently resulting in different financial results. General Electric has pursued a conservative growth strategy by focusing on being the number one or number two in each industry where it competes as Tyco has pursued a very aggressive sales and earnings growth strategy through rapid, multiple acquisitions.According to the website General Electric Company (GE) is a diversified industrial corporation and Tyco International Ltd. (TYC) is a diversified manufacturing and service company.GE's infrastructure segment produces jet engines, turboprop and turbo shaft engines, and related replacement parts for use in military and commercial aircraft; wind turbines; aircraft engine derivatives; gas and steam turbines, and generators; oil and natural gas compressors and turbines; diesel-electric locomotives and parts; and productivity solutions for industrial and municipal water systems. GE offers various financial products and services in the aviation and energy sectors also (General Electric, 2007).Tyco operates in four business segments, the first segment is electronics, which designs, manufactures and distributes electrical and electronic components. The second segment is fire and security, which designs, manufactures, installs, monitors and services electronic security and fire protection systems. The third segment is healthcare, which designs, manufactures and distributes medical devices and supplies, imaging agents, pharmaceuticals, and adult incontinence and infant care products. The fourth segment is engineered products and services, which designs, manufactures, distributes and services engineered products, including industrial valves and controls, as well as steel tubular goods, and provides consulting, engineering and construction management and operating services (Tyco, 2007).From web based financial services site the following financial information has been recorded:Common shareholders' equity - 2006 (total equity less any preferred stock equity)(GE) $112,314,000 - $0 = $112,314,000(TYC) $35,419,000 - $0 = $35,419,000Market Capitalization - 2006 (total common stock shares outstanding times latest stock price)(GE) $10.28 Billion x $35.02 = $360.1 Billion(TYC) $2.0 Billion x $32.5 = $63.57 BillionNet profit margins for each company for the past 5 years.(GE)2006 - 12.65%2005 - 12.2%2004 - 12.1%2003 - 12.2%2002 - 11.5%(TYC)2006 - 9.65%2005 - 8.1%2004 - 7.7%2003 - 2.6%2002 - 8.2%Net Income - 2006(GE) $20,829,000(TYC) $3,713,000Return on Equity - 2006(GE) 18.65%(TYC) 11.74%After looking at both GE's (32.1 percent)and Tyco's (18 percent) market to book ratios along with their rate of return on equity this shows that General Electric (18.65 percent) has done a much better job than Tyco (11.74 percent) of providing greater shareholder...

Find Another Essay On Profit and Shareholder Wealth Comparison Paper: General Electric and Tyco

General Electric Compared to Tyco International

721 words - 3 pages shareholders Equity $109 $32Market Cap $377 $58Net profit Margins (Dec)2005 12.2% 8.1%2004 12.1% 7.7%2003 12.2% 2.6%2002 11.5% -8.2%2001 11.2% 11.5%Average net profit margin 11.8% 4.3%Market to book ratio 346% 181%Net Income $16 $3Return on equity 15% 9%In looking at both GE's and Tyco's market-to-book ratios along with the return on equity shows that General Electric has done a much better job of providing greater shareholder wealth. The Market

General Electric and It's Social Response

1559 words - 6 pages up of five large business entities; Capital Finance, Consumer & Industrial, Energy Infrastructure, Technology, and Infrastructure. Together these "businesses" employ more than 300,000 employees worldwide. GE has had a place on the Dow Jones Industrial Average since its inception in 1896 and its stock is the most widely held in the world. This all goes to say that General Electric is a very well established, very large multinational company

ENRON and PGE (Portland General Electric)

2083 words - 8 pages that he has built his considerable reputation. Beginning in 1979, Mr. Cavanagh focused his efforts on the electric utility sector. He strived to make them more in line with the environment and less profit driven. He pushed for more conservation of energy resources throughout the Northwest. In 1996, he shared credit for the nation's most ambitious multi-state energy conservation partnership, the Northwest Energy Efficiency Alliance. Additionally

Case of Rio Bravo and General Electric

5198 words - 21 pages 20Executive SummaryPackard Electric Corp. is a leader in power and signal product distribution in the United States. They thought they could do the same thing outside of the US so they opened a plant in Juarez, Mexico to manufacture harnesses for US and other foreign customers. At the beginning, however their results were very poor. Probably, the most important issue was that none of the management had the necessary experience needed for their

Paper on business ethics of Dennis Kozlowski and Tyco fraud

1333 words - 5 pages former International Paper executive William Lytton as executive vice president and general counsel replacing Irving Gutin who took the general counsel after Mark Belnick's resignation. Replacing Mark Swartz is David FitzPatrick, who has held jobs at many blue-chip firms, as finance chief. Tyco also named Edward Breen, former Motorola executive, to replace Dennis Kozlowski as CEO of Tyco International. Tyco's board also agreed to cut nine more board

Case Study: General Electric Company and 3M Worldwide

1622 words - 6 pages AbstractThis paper will provide a high level overview of the General Electric (GE) and Minnesota Mining and Manufacturing (3M) companies, from a financial standpoint. A general overview and history of each company and their stock symbols, including the trends for the past year, will be discussed. The standard industrial codes (SIC) will be provided, as well as each business's respective ranking in the industry. This document will be utilized as

General Electric and Honeywell vs European anti-trust Commission

1022 words - 5 pages The merger between General Electric (GE) and Honeywell would have been the largest ever merger between two industrial companies, it would have increased GE’s size by almost a third. GE is a leading manufacturer of airplane engines and Honeywell is a leading producer of avionic systems (such as engine starters). It was a stand out merger as it was the first time a merger between two US companies had been solely derailed by the European anti-trust

Different Views of the Comparison Between Non-profit and For Profit Organizations

1416 words - 6 pages Want to just say no to taxes and not pay them? Then create a not for profit organization and be exempted from all income taxes within that organization. Some examples of non-profit organizations are: hospitals, universities, political parties, religious organizations, and research for scientific studies. While on the other hand, for profit companies are any business that is owned by a person or a group of people. Some examples of for profit

Freight Rate Management and Shareholder Value

2292 words - 9 pages would not address the expenses associated with expected profits, expansion costs and other related operational costs. Shareholder benefits of FFA Shareholders benefit from the Freight Forwarding Agreements by being assured of a return on investment for the stake invested in the company’s shares. Loss of share value is influenced by a reduction in the freight rates, which influences the profits generated by the company (Batchelor, Alizadeh

Dollar General Productivity and Cost Paper

1033 words - 4 pages IntroductionProductivity and cost is a way to describe and understand the strategic changes a company has made. These changes will be based on productivity, wages, benefits, and other fixed and variable costs. Further more it will incorporate the law of diminishing marginal productivity and the relationship between productivity and cost. The company at hand for this discussion will be the Dollar General. Dollar General is one of the leading

Christians, Wealth and Poverty

2506 words - 10 pages Christians, Wealth and Poverty The Bible does not say that money is bad. However, what it does say is that it is "the love of money is the root of all evil", a powerful message. The Bible also says "no one can serve two masters". What this means is that you cannot be too attached to your money or it will lead you away from the one true master, God. It means you cannot use your money in selfish or bad ways, but

Similar Essays

Profit And Shareholder Wealth Comparison Paper

922 words - 4 pages Some companies become giants in the business world when classified as conglomerates. According to (2007), a conglomerate is “a corporation that is made up of a number of different, seemingly unrelated businesses”. Two major companies such as General Electric (GE) and Tyco are classified as conglomerates. Analyzing the market-to-book ratios of the two companies will provide a measure of shareholder wealth. The ratios

Profit And Shareholder Wealth Comparison Paper

693 words - 3 pages less profitable in terms of net profit margins (9.10 percent versus 12.60 percent) and had an 11.74 percent return on equity versus 18.65 percent for General Electric with common shareholder’s equity for Tyco at $35,419,000 compared to $112,314,000 for General Electric. After presenting this information about these two companies it has been determined that investors assuming a greater risk have not been rewarded with greater investment in

Profit And Shareholder Wealth Comparison Essay

956 words - 4 pages ). This ratio can be calculated by dividing each company’s market capitalization by that company’s shareholders’ equity. The market-to-book ratio for General Electric is 3.18 and for Tyco International, Ltd the market-to-book ratio is 1.37. Based on the calculation of these market-to book ratios, Tyco International, Ltd business strategy provides a larger shareholder wealth creation. This is determined by the smaller market-to-book

Profit And Shareholder Wealth Comparison Essay

878 words - 4 pages is greater than one, then the stock is overvalued. In contrast, if the ratio is less than one, then the stock is undervalued. The degree to the value of the stock can be seen in the magnitude of the ratio. By examining these ratios for each stock, along with the net profit margins, the success of each strategy can be measured.Market-To-Book RatioBased upon the most recent quarterly report from each General Electric (GE)'s and Tyco International