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allow me to doubt about the 2days of cash before they couldn't continue operations. GE is one of the companies with the biggest cashflow you can get. they can b
by ousta 11y ago
allow me to doubt about the 2days of cash before they couldn't continue operations. GE is one of the companies with the biggest cashflow you can get. they can basically live 1-2 years without any profit just using their cash.
- paganel 11y agoIt wasn't because of GE the industrial company, it was because of GE Capital, still part of GE. An article from October 2008: http://archive.fortune.com/2008/10/09/news/companies/colvin_ge.fortune/index.htm http://archive.fortune.com/2008/10/09/news/companies/colvin_... > The reality is that for years, about half of GE's prodigious profits have come from General Electric Capital, a 100%-owned affiliate that files its own reports with the SEC. GE Capital, headed by 29-year GE veteran Michael Neal, has ventured into practically every kind of financial service, from making car loans in Europe to investing in commercial real estate in Florida. If you have a credit card from Wal-Mart or Lowe's, it's really from GE Capital. The business owns almost 1,800 commercial airplanes and leases them to 225 airlines. Until last year it made subprime mortgages in the U.S. So, basically, at that moment (October 2008) GE was more of a financial company than an industrial one, and since other financial behemoths had collapsed (Lehman) or were about to collapse (AIG), chances were that GE the company was indeed only 2 days from disaster.
- OliverJones 11y agoProjected cashflow is only worth something if customers keep paying their bills. If they all stop paying -- because they can't get credit and need their cash to, say, pay bonuses to their executives -- then projected cashflow stops being equal to actual cashflow.