Financial statement analysis and common stock valuation

Analysis of Liquidity Ratios

Measures the adequacy of GE Aerospace cash resources to meet its near-term cash obligations.

• Liquidity Ratios (Summary)
• Current Ratio
• Quick Ratio
• Cash Ratio

Income Statement

The income statement (statement of earnings) reports on the performance of GE Aerospace, the result of its operating activities.

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Quarterly Data

An approach to decomposing GE Aerospace return on equity, return on assets, and net profit margin ratio as the product of other financial ratios.

• Two-Component Disaggregation of ROE
• Three-Component Disaggregation of ROE
• Five-Component Disaggregation of ROE
• Two-Component Disaggregation of ROA
• Four-Component Disaggregation of ROA
• Disaggregation of Net Profit Margin

Analysis of Short-term (Operating) Activity Ratios
Quarterly Data

Evaluates revenues and output generated by the GE Aerospace assets. Operating performance ratios describe the relationship between the GE Aerospace level of operations and the assets needed to sustain operating activities.

• Short-term Activity Ratios (Summary)
• Inventory Turnover
• Receivables Turnover
• Payables Turnover
• Working Capital Turnover
• Average Inventory Processing Period
• Average Receivable Collection Period
• Operating Cycle
• Average Payables Payment Period
• Cash Conversion Cycle

Analysis of Short-term (Operating) Activity Ratios

Evaluates revenues and output generated by the GE Aerospace assets. Operating performance ratios describe the relationship between the GE Aerospace level of operations and the assets needed to sustain operating activities.

• Short-term Activity Ratios (Summary)
• Inventory Turnover
• Receivables Turnover
• Payables Turnover
• Working Capital Turnover
• Average Inventory Processing Period
• Average Receivable Collection Period
• Operating Cycle
• Average Payables Payment Period
• Cash Conversion Cycle

Balance Sheet: Assets

The assets reports major classes and amounts of resources owned or controlled by GE Aerospace.

Analysis of Reportable Segments

GE Aerospace operates in 2 segments: Commercial Engines & Services (CES) and Defense & Propulsion Technologies (DPT).

• Segment Profit Margin
• Segment Capital Expenditures to Depreciation
• Revenues
• Segment profit (loss)
• Property, plant and equipment additions
• Depreciation and amortization

Common-Size Balance Sheet: Assets
Quarterly Data

Assets components shown as percentage of total assets.

Common-Size Income Statement
Quarterly Data

Income statement components (revenues and expenses) shown as percentage of total sales.

Analysis of Debt

• Total Debt (Carrying Amount)
• Total Debt (Fair Value)
• Weighted-average Interest Rate on Debt

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of GE Aerospace common stock issue as the present value of all future dividends.

• Intrinsic Stock Value (Valuation Summary)
• Required Rate of Return (r)
• Dividend Growth Rate (g)

Analysis of Profitability Ratios
Quarterly Data

Measures the income of GE Aerospace relative to its revenues and invested capital.

• Profitability Ratios (Summary)
• Gross Profit Margin
• Operating Profit Margin
• Net Profit Margin
• Return on Equity (ROE)
• Return on Assets (ROA)