Question
In consulting the Annual Report 10K for General Electric for 2018 and 2019, we find the following data on the various business segments. Note, only
In consulting the Annual Report 10K for General Electric for 2018 and 2019, we find the following data on the various business segments. Note, only continuing business segments are included here, and the most current reported data is utilized where available.
Total segment revenue
Year | Power | Renewable energy | Aviation | Healthcare | GE Capital |
2015 | 28,903 | 6,273 | 24,660 | 17,639 | 10,801 |
2016 | 36,795 | 9,033 | 26,261 | 18,291 | 10,905 |
2017 | 29,426 | 14,321 | 27,013 | 19,017 | 9,070 |
2018 | 22,150 | 14,288 | 30,566 | 19,784 | 9,551 |
2019 | 18,625 | 15,337 | 32,875 | 19,942 | 8,741 |
Total Segment Profit/Earnings
Year | Power | Renewable Energy | Aviation | Healthcare | GE Capital |
2015 | 4,772 | 431 | 5,507 | 2,882 | (7,983) |
2016 | 5,091 | 576 | 6,115 | 3,161 | (1,251) |
2017 | 1,894 | 728 | 5,370 | 3,488 | (6,765) |
2018 | (808) | 292 | 6,466 | 3,698 | (489) |
2019 | 386 | (666) | 6,820 | 3,896 | (530) |
With this data as your fact base, please apply the concepts of risk analysis as we have developed them in the course to this portfolio of businesses within GE. Specifically, I am interested in how you would measure the risk for each business segment and the portfolio as a whole. What are the measures as you calculate them? Which business is most risky (remember we treat risk as volatility for better or worse here) and which is least risky and why?
Finally, I would like you to form an opinion on the question of how diversified this set of businesses might be. I have specifically selected time periods prior to the pandemic crisis to remove that major factor from the required analysis although you might want to comment on it.
No more than a one-page note with the attached spreadsheet analyses responding to the above is your deliverable here.
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