I made another trip to Crotonville for the GE MDC class. This group was a bit more basic in their financial understanding which was great. I like going over the basics with smart inquisitive people. We had some great discussion on the current state of GE financials.
GE has had a couple of transition years. They are growing margins in their industrial business while downsizing and divesting parts of the capital business. The capital business is targeted to be about 33% of GE revenue down from around 50% prior to the 2008-2010 financial crises. The business has come through the challenge well. The only problem with the numbers is revenue is stagnant and needs to start growing. With capital downsizing it’s pretty tough to grow the top line (revenue) in the business. GE is still very profitable and is a strong operating cash flow generator.
The class asked a lot of questions surrounding the income statement and balance sheet so we spent much of our time in those areas. Consequently, we did not get to the Return on Total Capital (ROTC) or Return on equity (ROE) metric.
I stayed for the first time in new residence hall. Very nice! GE Crotonville is its own contained campus with two residence halls, a very nice dining room, and the best gym around. Not a bad place to stay and train. I usually do my training in the Pit which is the room made famous by Jack Welsh. He wrote and talked about bouncing ideas of off students in the MDC course throughout his career. It is a great facility. I do have an issue with the Pit because with the remodel a window was added to the room creating a nice view of the scenic campus—not much of a pit anymore.