Financial measures for General Electric

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To :         The Board of Directors, GENERAL ELECTRIC COMPANY

Subject :         NEW fiscal AND STATISTICAL MEASURES TO MONITOR

        THE SUCCESS OF GENERAL ELECTRIC COMPANY

        After Mr. Weltch announced my new assignment, I pondered how I could go about guaranteeing the better(p) possible result: a creditable and well nonionised work that is going to help you, the Board of Directors, plan for the future of the company in a better way. Before starting line my analysis, I must specify that my prey is not to remove the traditionally used financial and statistical measures but to kick downstairs new ones to be used as guidance for the potbelly stove¹s future development.

        Our Chairman recently wrote that the hottest trend in business in 1995 -- and the one that hit closest to radix -- is the rush toward shift up multi-business companies and spinning off their components, below the theory that their size and diversity inhibited their competitiveness ... breaking up is the right effect for some big companies ... for us it is the wrong answer.1

For us the new trend is the entrance into the assist industry.

The question must then be: is this the right answer?

        GE is expecting to increase its revenue by the year 2000 to $ cxx billion compared with $58 billion in 1990.



In new(prenominal) words, if the forecast proves to be correct, it will obtain an average yearly rate of growth of 7.5%. This high rate is mainly attributed to the refinement of the work sector of the company, which is estimated to increase by an average one-year rate of 13% compared with a corresponding one of 2.1% for manufacturing. directly nearly 60% of GE¹s profits comes from services -- up from 16.4% in 1980.2

        This is our new direction and therefore my target is to...

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