Matt Schechter & Nathan Powell
Analyst & Global Head of Financials
Identifying Early Warning Signs of Business Deterioration in Financial documents
Mid 2008 RIskMetrics added General Electiric to its ‘Biggest Concerns List’ and issued an initiation report suggesting GE’s stock was at significant risk. Previous to the credit cycle downgrade for key credit exposures, GE had replaced its earnings source, in 2007 & 2006, with low quality earning sources such as receivables and asset sales and began taking gains from its securities portfolio. Since RiskMetric’s initiation note GE’s stock has plummeted over 75%, to April 2009.