Abstract This paper will provide a high level overview of the General Electric (GE) and Minnesota Mining and Manufacturing (3M) companies, from a financial standpoint. A general overview and history of each company and their stock symbols, including the trends for the past year, will be discussed. The standard industrial codes (SIC) will be provided, as well as each business’s respective ranking in the industry.
This document will be utilized as the foundation research for further development and analysis of the two companies’ financial health. Company Selection Paper – General Electric Company and 3M Worldwide A publicly traded company is one which has issued securities through an offering, and which is now traded on the open market (www. investorwords. com). When a company is publicly traded, it is under constant scrutiny by shareholders, analysts, and the general public.
As a result of the Federal Sarbanes-Oxley Act of 2002, some states have imposed requirements on publicly traded corporations to disclose information about their officers, auditors, directors, and historical events. This information is now required along with other pertinent information, such as financial statements, that are currently required to be disclosed.
This information is also made available on the internet, and could definitely assist in improving the market transparency of publicly traded corporations for present and future investors. The writers of this paper have utilized the internet, and other research material to provide the reader with an overview of two companies within the same industry–General Electric Company and 3M Worldwide–which are publicly traded. Amongst other things, this overview will include information on the companies’ history, their industry, and rankings within the industry.
Information on the companies’ stocks, dividends, and products or services will also be highlighted. Historical Overview General Electric Company General Electric (GE) is a diversified technology and services company, and among other things, is engaged in developing, manufacturing and marketing a wide variety of products for the generation, transmission, distribution, control and utilization of electricity. Throughout the years, GE, whose stock is traded on the stock market under ticker symbol GE, has developed or acquired new technologies and services that have considerably broadened the scope of its activities.
GE, whose products include appliances, lighting products, aircraft engines and plastics, is a virtual powerhouse of electronics, technology and media. GE was established in 1878, over one hundred and twenty-five years ago by Thomas A. Edison, who established the Edison Electric Light Company. GE was incorporated on April 15, 1892, the same year a merger was formed between “Edison General Electric Company and Thomson-Houston Electric Company”, to create what is presently known as General Electric Company (http://www. ge. com). GE is an example of a business that has kept up with the times, economic demands, technology and client demands.
Although a colossal company, GE is by no means a monopoly, and it does not have sole control over the worlds of diversified technology, manufacturing and services. GE operates in more than 100 countries around the world, including 250 manufacturing plants in 26 different nations. GE employs 313,000 persons worldwide, including 168,000 in the United States. 3M Worldwide Started by five Minnesota businessmen in 1902, Minnesota Mining and Manufacturing Company (3M) mined “what they thought was corundum, a mineral ideal for making sandpaper and grinding wheels. The mineral, however, turned
out to be a low-grade anorthosite. Sales of the poor-quality mineral were weak, and the company nearly failed” (http://www. 3m. com). The companies decided to close the mine and start making sandpaper from minerals they purchased from other sources. 3M Company, formerly known as Minnesota Mining and Manufacturing Company, is a diversified global company with a market presence in healthcare, safety, electronics, telecommunications, industrial, consumer and office and other markets. 3M is an integrated enterprise characterized by substantial corporation in research, manufacturing, and marketing products.
3M, ticker symbol MMM, was incorporated in 1929 and was listed on the New York Stock Exchange for the first time in 1946. Currently, 3M has over 40 business divisions that are systematized into seven business segments: transportation, healthcare, industrial, consumer and office display and graphics, electro and communications, safety, and finally, security and protection services. 3M operates in over 60 countries. It has “29 international companies with manufacturing operation and 32 laboratories” (http://www. 3m. com).
As for the United States, 3M has operations in 24 states. It employs 68,774 persons worldwide: 35,024 throughout the United States, and 33,750 internationally. Stock Exchange General Electric Company General Electric Company (GE) is the only company listed in the Dow Jones Industrial Index today that was also included in the original index in 1896. The company’s stock is traded on the New York Stock Exchange (NYSE). The current stock price for GE is $30. 65. However, its highest and lowest stock price over the most recent 52 weeks was $32. 42 and $21. 30, respectively.
The accounting firm recommended to audit the financial statements of GE was KPMG LLP. 3M Worldwide 3M is one of the 30 stocks that make up the Dow Jones Industrial Average, and is also a component of the Standard & Poor’s 500 Index. The common stock (MMM) is also traded on the NYSE. The current stock price for 3M is $82. 98. The closing price for each day is normally adjusted to account for any stock splits and/or dividends which may occur. The split adjustment factor is a cumulative factor. The highest and lowest stock price over the most recent 52 week range was $82.
80 and $59. 73, respectively. The accounting firm that audits the financial statements for 3M Worldwide is PricewaterhouseCoopers LLP. Industry Classification Standard Industrial Classification codes (SIC) are used to classify businesses into the areas of the company’s primary business. GE and 3M both have several SIC codes and are listed below for reference. General Electric Company Primary SIC code 6159 Miscellaneous Business Credit Institutions SIC CODES: 6159 Miscellaneous Business Credit Institutions 3511 Turbines and Turbine Generator Sets 4911 Electric Services 3724.
Aircraft Engines and Engine Parts 3845 Electromedical Equipment 3080 Miscellaneous Plastics Product, nec. 3639 Household Appliances, nec. GE is considered to be a diversified technology and services company, dedicated to creating products that make life better, from aircraft engines and power generation to financial services, medical imaging, television programming and plastics. The company has a broad range of primary business units, each with its own number of divisions. GE has been rated “triple” A (the highest credit quality rating) by Standards & Poors and Moodys, since 1956.
The July 2003 issue of Fortune 500 ranked General Electric (GE) as number one in the top six diversified financial global companies. This industry represents the greatest volume of GE’s revenues (Fortune, 2003). GE was not listed in Fortune’s list under any of the other industries in which they serve. The financial statements for GE contain revenues, cost and expenses, net earnings (loss) and dividends or other payments to stockholders. This is the consolidated spreadsheet that covers all 13 of GE’s core businesses.
The footnotes of these charts refer to major write offs or explanations for consolidation, or any other adjustments made to the statements. The footnotes section also has a long detailed version to explain all the accounting adjustments made to the financial statements. Dividends for the past three years (2000 – 2002) for GE were 2. 263, 2. 09, and 1. 945, respectively (Thomson Research, 2003). 3M Worldwide Primary SIC code 2891 Adhesives and Sealants SIC CODES: 2891 Adhesives and Sealants 2821 Plastics Materials and Resins 5085 Industrial Supplies 3842 Surgical Appliances and Supplies 3291 Abrasive Products.
3M is also considered to be a conglomerate, as it is a $16 billion diversified technological company having leading positions in consumer and office, display and graphics, electronics and telecommunications, health care, industrial, safety, security and protection services, transportation, and other businesses. Fortune 500 ranked 3M as number three in the top ten companies listed in their ‘miscellaneous’ category (Fortune, 2003). The financial statements for 3M contain revenues, cost and expenses, net earnings (loss) and dividends or other payments to stockholders. The consolidated spreadsheet is of 3M’s businesses.
The footnotes refer to accounting adjustments including consolidation of businesses, write offs and other adjustments. Dividends for the last three years (2000 – 2002) were 1. 939, 1. 512, and 1. 637, respectively (Thomson Research, 2003). Equity General Electric Company General Electric Company only offers common stock to its investors. Currently, GE has 9. 947 billion shares outstanding. Based on the Notes to the Financial Statements, in particular the liabilities and equities sections, it does not appear that General Electric has any bonds outstanding. 3M Worldwide 3M offers stock to its investors only in the form of common stock.
3M Worldwide has 3,533,200 shares outstanding. In reviewing the Notes to the Financial Statements of 3M, it does not appear that there are any bonds outstanding. Conclusion The writers of this paper have provided a brief overview of General Electric Company and 3M Worldwide, two publicly traded companies that provide a diversity of products and services on a global scale. Much knowledge was garnered in the research of each company as it pertained to their stock, industry classification, and equity. Based on the information researched, it appears that GE is a more profitable corporation than 3M.
Team C came to this conclusion based on GE’s ranking in one of its industries, and the dividends it is able to pay out to its shareholders. Apart from the industry ranking, GE was ranked ninth by Fortune 500 as the world’s largest corporation in terms of its revenues. GE was also ranked second in the world in terms of its profits. It is hoped that the information provided herein has successfully painted a true picture of the requirements of publicly traded companies in terms of the depth of information that must be disclosed to their shareholders. References: http://www. investorwords.
com/3940/publicly_traded. html – 16k – 10 Dec 2003. Retrieved December 11, 2003 from the World Wide Web. http://www. 3m. com (n. d. ). Retrieved December 10, 2003, from official website. http://www. ge. com. Retrieved December 11, 2003 from official website. http://www. ge. com/en/company/investor/annreports. htm http://www. corporate-ir. net/ireye/ir_site. zhtml? ticker=MMM&script=2100 The 500 Ranked Within Industries (July, 2003). Fortune, Vol. 148, No. 2, p. F-16-22. Thomson Research. Retrieved December 13, 2003 from official website http://www. apollolibrary. com:2409/gaportal/ga. asp