New Financial And Statistical Measures To Monitor The Success Of GE

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$120 billion
compared with $58 billion in 1990. In other words, if the forecast proves to be
correct, it will obtain an average annual rate of growth of 7.5%. This high
rate is mainly attributed to the expansion of the services sector of the company,
which is estimated to increase by an average annual rate of 13% compared with a
corresponding one of 2.1% for manufacturing. Today nearly 60% of GE's profits
comes from services -- up from 16.4% in 1980.2
This is our new direction and therefore my target is to find these
measures that are going to help us understand how the business is going to
perform in that particular field. I also consider that our attempt to expand
internationally is extremely important and in a way is something new for us.
International operating profit was $3.0 billion for 1995 compared with $2.3
billion in 1993.3 This extremely rapid expansion hides a lot of dangers, and at
the same time shows another new "trend" of our corporation. In my analysis I
will ...

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expenses comparison,
compares the amount of money spent for the service industry to the expenses made
for the manufacturing industry. Thus it is equal to :

Expenses made for the service industry
MIEC = --------------------
Expenses made for the manufacturing industry

Therefore, according to the financial statements of the previous years
we would have6:

MIEC 1992 = 15842/29991= 0.52
MIEC 1993 = 18560/30657= 0.60
MIEC 1994 = 19787/30890= 0.64
MIEC 1995 = 26156/33152= 0.78

By establishing the MIEC, we can see the relationship between the amount
of money spent on service and the amount of money spent on manufacturing. MIEC
is a simple ...

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