GE Aerospace (NYSE:GE)

A significant reduction in goodwill and intangible assets is observed over the five-year period. The most substantial changes occur within goodwill and the components of amortized intangible assets. Overall, the value of these assets decreased from US$35.512 billion in 2021 to US$13.285 billion in 2025.

Goodwill

Goodwill experienced a marked decline, decreasing from US$26.182 billion in 2021 to US$9.060 billion in 2025. The largest decrease occurred between 2021 and 2023, falling from US$26.182 billion to US$13.385 billion. The rate of decline slowed between 2023 and 2025, with a relatively small increase from US$8.538 billion to US$9.060 billion.

Amortized Intangible Assets - Gross

The gross carrying amount of intangible assets subject to amortization also decreased substantially, moving from US$21.205 billion in 2021 to US$8.380 billion in 2025. Each component within this category – customer-related, patents and technology, capitalized software, and trademarks & other – exhibited a consistent downward trend throughout the period. The most significant reductions were noted in patents and technology, and capitalized software.

Amortized Intangible Assets - Net

Net intangible assets subject to amortization followed a similar pattern, decreasing from US$9.282 billion in 2021 to US$4.225 billion in 2025. The decrease in net value is moderated by accumulated amortization, which also increased over the period, from negative US$11.923 billion to negative US$4.155 billion. The rate of decline in net value slowed in the later years of the period.

Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets were minimal, starting at US$48 million in 2021 and reaching US$62 million in 2022, with no values reported for 2023-2025. This suggests a limited reliance on assets with indefinite useful lives.

Other Intangible Assets, Net

The value reported as "Other intangible assets, net" mirrors the values for net intangible assets subject to amortization, suggesting a potential reporting consolidation or overlap. It decreased from US$9.330 billion in 2021 to US$4.225 billion in 2025.

The combined effect of these trends resulted in a substantial decrease in total goodwill and intangible assets. The reductions in both goodwill and amortized intangible assets indicate potential impairments, strategic divestitures, or changes in the company’s asset base. The consistent decline across multiple intangible asset categories suggests a broad-based trend rather than isolated events.

The information presents a five-year trend of reported and adjusted financial figures. A significant difference exists between reported and adjusted total assets and shareholders’ equity, stemming from the removal of goodwill and intangible assets in the adjusted figures. This analysis focuses on the observed trends within these adjusted values.

Total Assets Trend

Adjusted total assets demonstrate a consistent decline from 2021 to 2024, decreasing from US$161,990 million to US$114,602 million. A slight increase is then observed in 2025, reaching US$121,109 million, but the level remains below all prior years in the observed period. The most substantial decrease occurred between 2022 and 2023, with a reduction of US$12,320 million.

Shareholders’ Equity Trend

Adjusted shareholders’ equity exhibits a more volatile pattern. It decreased substantially from 2021 to 2022, falling from US$14,128 million to US$10,568 million. An increase is noted between 2022 and 2023, rising to US$13,993 million, but this is followed by a decrease to US$10,804 million in 2024. A further decline is observed in 2025, reaching US$9,617 million, representing the lowest value in the observed period. The largest single-year decrease in adjusted shareholders’ equity occurred between 2024 and 2025.

Asset to Equity Relationship

The ratio of adjusted total assets to adjusted shareholders’ equity has generally increased over the period, indicating a growing reliance on debt or other non-equity financing. In 2021, this ratio was approximately 11.3. By 2025, it had risen to approximately 12.6. This suggests that for every dollar of adjusted equity, the company controls a greater amount of adjusted assets. The increase is not linear, with fluctuations corresponding to the changes in both asset and equity values.

The consistent reduction in adjusted total assets, coupled with the fluctuating but ultimately declining adjusted shareholders’ equity, suggests a significant restructuring or asset write-down strategy. The increase in the asset-to-equity ratio warrants further investigation to understand the implications for the company’s financial leverage and risk profile.

The financial metrics demonstrate a significant impact from the adjustment for goodwill and intangible assets. Generally, removing goodwill from the asset base results in substantially altered financial ratios, particularly those related to profitability and leverage. The observed changes suggest that goodwill represents a considerable portion of the reported asset base, and its inclusion masks underlying operational performance.

Total Asset Turnover

Reported total asset turnover exhibits a modest increase from 0.36 in 2021 to 0.40 in 2023, followed by a decrease to 0.29 in 2024 and a slight recovery to 0.33 in 2025. The adjusted total asset turnover consistently shows higher values, ranging from 0.41 to 0.45 between 2021 and 2023, and then mirroring the reported trend with a drop to 0.31 in 2024 and a rise to 0.35 in 2025. The difference between reported and adjusted values indicates that excluding goodwill increases the efficiency with which assets are used to generate revenue.

Financial Leverage

Reported financial leverage steadily increases over the period, moving from 4.93 in 2021 to 6.97 in 2025. Conversely, adjusted financial leverage is considerably higher, starting at 12.22 in 2021 and fluctuating between 10.61 and 15.33 over the subsequent years. This substantial difference highlights that the inclusion of goodwill significantly understates the company’s true leverage position. The higher adjusted leverage suggests a greater reliance on debt financing relative to the adjusted asset base.

Return on Equity (ROE)

Reported ROE demonstrates a dramatic improvement, shifting from a loss of -16.17% in 2021 to a substantial 46.60% in 2025. However, the adjusted ROE reveals a much more pronounced trend, beginning with a larger loss of -46.15% in 2021 and escalating to 90.51% in 2025. The magnitude of the difference between reported and adjusted ROE underscores the considerable influence of goodwill on the reported profitability relative to equity. The adjusted ROE suggests a more volatile, but ultimately higher, return on equity when goodwill is excluded.

Return on Assets (ROA)

Reported ROA follows a similar pattern to ROE, improving from -3.28% in 2021 to 6.69% in 2025. The adjusted ROA also shows improvement, but remains consistently higher than the reported ROA, ranging from -3.78% to 7.19% over the period. The difference between reported and adjusted ROA indicates that excluding goodwill provides a more accurate representation of the company’s profitability relative to its assets. The adjusted ROA suggests a slightly lower initial loss and a more consistent, albeit modest, improvement in asset utilization.

In summary, the adjustments for goodwill consistently reveal a more leveraged, and potentially more volatile, financial profile. While reported profitability metrics show improvement over the period, the adjusted ratios suggest that this improvement is significantly amplified by the presence of goodwill on the balance sheet. The analysis indicates that a thorough understanding of the company’s underlying operational performance requires consideration of these adjusted figures.

An examination of the financial information reveals trends in both total asset values and associated turnover ratios over a five-year period. Reported total assets demonstrate a consistent decline from 2021 to 2024, followed by a modest increase in 2025. Adjusted total assets mirror this pattern, exhibiting a similar decrease between 2021 and 2024 before a slight recovery in the final year.

Reported Total Asset Turnover

The reported total asset turnover ratio initially increased from 0.36 in 2021 to 0.40 in 2022 and 2023. However, a notable decrease to 0.29 occurred in 2024, before partially recovering to 0.33 in 2025. This suggests a diminishing efficiency in generating revenue from reported assets, particularly in 2024, followed by a slight improvement.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio shows a similar trajectory to the reported ratio, increasing from 0.41 in 2021 to a peak of 0.45 in 2022, then decreasing to 0.31 in 2024. A subsequent rise to 0.35 is observed in 2025. The adjusted ratio consistently exceeds the reported ratio across all periods, indicating that excluding certain asset components results in a more favorable efficiency metric. The decline in 2024 is particularly pronounced, suggesting a significant reduction in revenue generation relative to the adjusted asset base.

The convergence of the reported and adjusted asset values, coupled with the fluctuations in turnover ratios, suggests potential shifts in the composition of assets. The decrease in both asset bases from 2021 to 2024, followed by a modest increase in 2025, warrants further investigation to understand the underlying drivers of these changes and their impact on operational efficiency. The difference between the reported and adjusted turnover ratios consistently highlights the impact of the assets excluded in the adjusted calculation.

An examination of the financial information reveals notable trends in total assets, shareholders’ equity, and associated leverage ratios over the five-year period. Reported total assets demonstrate a consistent decline from 2021 through 2024, followed by a modest increase in 2025. A similar pattern is observed in adjusted total assets, though the magnitude of the decrease is less pronounced. Shareholders’ equity, both reported and adjusted, exhibits a downward trajectory throughout the period, with adjusted shareholders’ equity showing greater volatility.

Total Assets

Reported total assets decreased from US$198,874 million in 2021 to US$123,140 million in 2024, representing a substantial reduction. A slight recovery is then seen in 2025, with assets reaching US$130,169 million. Adjusted total assets follow a similar trend, declining from US$172,692 million in 2021 to US$114,602 million in 2024, and increasing to US$121,109 million in 2025. The difference between reported and adjusted total assets widens over time, suggesting increasing adjustments are being made to the reported figures.

Shareholders’ Equity

Reported shareholders’ equity decreased steadily from US$40,310 million in 2021 to US$18,677 million in 2025. Adjusted shareholders’ equity shows a more erratic pattern, falling from US$14,128 million in 2021 to US$10,568 million in 2022, increasing to US$13,993 million in 2023, then decreasing again to US$9,617 million in 2025. The substantial difference between reported and adjusted shareholders’ equity, and the fluctuations in the adjusted value, warrant further investigation into the nature of these adjustments.

Financial Leverage

Reported financial leverage increased consistently from 4.93 in 2021 to 6.97 in 2025, indicating a growing reliance on debt financing relative to equity. Adjusted financial leverage exhibits a more volatile pattern. It increased significantly from 12.22 in 2021 to 15.33 in 2022, decreased to 10.70 in 2023, remained relatively stable at 10.61 in 2024, and then increased to 12.59 in 2025. The higher values of adjusted financial leverage, compared to reported leverage, suggest that the adjustments to assets and equity significantly impact the assessment of the company’s financial risk. The increase in both reported and adjusted leverage over the period indicates a heightened level of financial risk.

The consistent decline in both reported and adjusted asset bases, coupled with decreasing shareholders’ equity, contributes to the observed increase in financial leverage. The divergence between reported and adjusted figures suggests the presence of significant non-cash adjustments impacting the financial position. The fluctuations in adjusted shareholders’ equity and the resulting volatility in adjusted financial leverage require further scrutiny to understand the underlying drivers and potential implications for the company’s financial stability.

Shareholders’ equity, both reported and adjusted, demonstrates distinct trends over the five-year period. Reported shareholders’ equity decreased significantly from 2021 to 2024, followed by a modest decline in 2025. Adjusted shareholders’ equity exhibited more volatility, decreasing from 2021 to 2022, then increasing in 2023, before declining through 2025.

Reported Return on Equity (ROE)

Reported ROE experienced substantial fluctuations. A significant negative value was recorded in 2021, followed by a positive, but modest, return in 2022. Substantial increases are then observed in 2023, 2024, and 2025, culminating in a high of 46.60% in the final year. This suggests improving profitability relative to reported equity.

Adjusted Return on Equity (ROE)

Adjusted ROE mirrored the volatility of reported ROE, but with more pronounced swings. A large negative value was recorded in 2021. A modest positive return followed in 2022. Significant growth is then observed in 2023 and 2024, with a further substantial increase to 90.51% in 2025. The consistently higher values of adjusted ROE compared to reported ROE across all years indicate that the adjustments made to shareholders’ equity significantly impact the return calculation, suggesting the presence of items affecting equity that are not reflective of underlying economic performance.

The divergence between reported and adjusted ROE suggests that goodwill and intangible assets, or the accounting treatment thereof, are materially impacting reported equity. The increasing trend in adjusted ROE, particularly in the later years, warrants further investigation into the nature of these adjustments and their sustainability. The substantial difference between the two ROE figures highlights the importance of considering adjusted equity when evaluating the company’s performance.

The reported and adjusted total assets demonstrate a decreasing trend from 2021 to 2024, followed by a slight increase in 2025. Reported total assets decreased from US$198,874 million in 2021 to US$123,140 million in 2024 before rising to US$130,169 million in 2025. A similar pattern is observed in adjusted total assets, declining from US$172,692 million in 2021 to US$114,602 million in 2024, and subsequently increasing to US$121,109 million in 2025. Both reported and adjusted return on assets (ROA) exhibit an improving trend over the period, despite the initial asset decline.

Reported Total Assets

Reported total assets experienced a substantial decrease between 2021 and 2024, representing a reduction of approximately 38%. The subsequent increase in 2025 suggests a potential stabilization or reinvestment phase.

Adjusted Total Assets

Adjusted total assets mirrored the trend of reported total assets, decreasing by roughly 33% from 2021 to 2024. The 2025 increase, while present, was less pronounced than that of the reported figures.

Reported Return on Assets (ROA)

Reported ROA began at -3.28% in 2021, indicating a loss relative to assets. It improved to 0.12% in 2022, and continued to rise, reaching 5.81% in 2023, 5.32% in 2024, and peaking at 6.69% in 2025. This demonstrates a consistent improvement in profitability relative to the reported asset base.

Adjusted Return on Assets (ROA)

Adjusted ROA followed a similar trajectory to the reported ROA, starting at -3.78% in 2021 and increasing to 0.14% in 2022. It reached 6.34% in 2023, 5.72% in 2024, and culminated in 7.19% in 2025. The adjusted ROA consistently exceeded the reported ROA throughout the period, suggesting that the adjustments made to total assets resulted in a more favorable profitability metric.

The divergence between the declining asset base and the improving ROA suggests increasing efficiency in asset utilization. The adjustments to total assets appear to be impacting the ROA calculation, resulting in higher profitability figures when utilizing the adjusted values. The increase in both reported and adjusted total assets in 2025 warrants further investigation to determine the nature of these asset additions and their potential impact on future ROA performance.