Risk Management

Risk Management

RiskManagement

GeneralElectric is a multinational company, mainly based in America, NewYork. As of 2015 review, the company operates in various segments.Moreover, GE is a financial services as well as a technology company,which builds and manufactures merchandises for transmission, control,generation, distribution and utilization of electric power. Some ofits services and products comprise of water processing, aircraftengines, medical imaging, security technology and consumer financing,as we well as industrial products and media content. Indeed, GEcontributes to the development of the world through the provision ofinfrastructures, capital and expertise for the entire economy. Thecompany provides huge sum of money for business financing, thusenabling them to grow their operations, while consumers can fostertheir future financial securities.

Typesof credit GE use and how they are managed

Generalelectric uses a variety of credits to foster its business and theyinclude Equipment lending and leasing, franchise, corporate andinventory financing, commercial aviation and real estate.Additionally, the company has ventured into restructuring, health andenergy financing. GE helps its clients globally to foster throughleasing as well as lending apparatus such as copier andsemiconductors. The company also aid commercial means oftransportation to exploit their potential through the provision ofservices that nurture productivity while minimizing operational costand toxic emission. Regarding franchise financing, the company hastaken part in offering acquisition finances, development of new unitsand refinancing of both single and multi-unit restaurant chains aswell as services hotels. General Electric also provides financialsupport for companies that require restructuring in their debt orrestructuring in the case of bankruptcy court fortification.

GEfurther provides inventory financing credit to help its clients inmoving goods and products from producers to distributers and finallyto dealers. This form of credit is deemed to aid business in carryingout optimal levels of inventory. In addition to the inventory creditservices, the company does corporate financing, which comprises ofproviding credit lines, working capital programs and term loans tomiddle markets to help them optimize cash flow, either from accountsor inventory receivable. As mention earlier, commercial real estateis one of the credit services provided by GE and it entails provisionof a broad spectrum of servicing and solutions for developers,borrowers, brokers as well as small and huge official holders of realestate. Among other credit services provided by GE, commercialaviation credits form major part of the credit services, and itinvolves offering of productivity and financing solutions for theaviation industry worldwide.

Typesof credit GE extend to individuals and businesses and how they aremanaged

TheGeneral Electric provides private label bank cards and credit cards.The company provides this credit service with fixed payment, rewardsoptions and promotional financing. In addition, the company providesextra credit products in some countries. Moreover, GE providesInstallment loans to individuals and businesses. Importantly, thisservice is offered to consumers with appealing terms as well asconsistent monthly payments for the huge ticket purchases.Furthermore, the company provides secure and save savings accountthrough the saving and deposit credit services, however, this form ofservice is offered in selected countries. The deposits product mainlyfeatures high yield rates of interest, with a variety of maturitychoices[ CITATION Gen15 l 1033 ].

GeneralElectric level of debt and credit

Accordingto GE’s financial records, its debt to equity ratio enriched from2012 to 2013, however, it declined from 2013 to 2014. Additionally,its debt to capital ratio was higher in 2013 as compared to 2012,although is declines slightly from financial year 2013 to 2014.Indeed, financial year 2012 recorded the highest debt to equity ratioas well as debt to capital ratio with a value of 0.34. In 2014, GEhad a robust second quarter, thus boosting its industrial creditdegree and an excellent cash generation. Indeed, the credit servicesremains slightly slower and volatile in particular growth markets,although United States is improving gradually.

Myrecommendation is that the company needs to minimize its services inthe banking industry since its risks have been reported to clatterinvestors as well as weighing on its stock. Instead, it should focusmore on aircraft leasing services, providing financial credit to bothhealthcare and energy industries.

References

General Electric . (2015). GE Capital. Retrieved September 17, 2015, from General Electric: https://www.ge.com/news/company-information/ge-capital