Stock Analysis on Net
Stock Analysis on Net

GE Aerospace (NYSE:GE)

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

GE Aerospace, balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Goodwill 13,385 25,798 26,182 25,524 26,734
Customer-related 6,201 6,063 6,400 6,862 6,770
Patents and technology 5,924 8,432 8,592 8,191 8,180
Capitalized software 2,356 5,288 5,764 5,826 5,822
Trademarks & other 276 419 449 778 738
Intangible assets subject to amortization, gross carrying amount 14,757 20,202 21,205 21,657 21,510
Accumulated amortization (9,062) (12,639) (11,923) (11,883) (10,857)
Intangible assets subject to amortization, net 5,695 7,563 9,282 9,774 10,653
Indefinite-lived intangible assets — 62 48 — —
Other intangible assets, net 5,695 7,625 9,330 9,774 10,653
Goodwill and other intangible assets 19,080 33,423 35,512 35,298 37,387

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. GE Aerospace goodwill decreased from 2021 to 2022 and from 2022 to 2023.
Other intangible assets, net Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. GE Aerospace other intangible assets, net decreased from 2021 to 2022 and from 2022 to 2023.
Goodwill and other intangible assets Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. GE Aerospace goodwill and other intangible assets decreased from 2021 to 2022 and from 2022 to 2023.

Adjustments to Financial Statements: Removal of Goodwill

GE Aerospace, adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 163,045 187,788 198,874 253,452 266,048
Less: Goodwill 13,385 25,798 26,182 25,524 26,734
Total assets (adjusted) 149,660 161,990 172,692 227,928 239,314
Adjustment to Total GE Shareholders’ Equity
Total GE shareholders’ equity (as reported) 27,378 36,366 40,310 35,552 28,316
Less: Goodwill 13,385 25,798 26,182 25,524 26,734
Total GE shareholders’ equity (adjusted) 13,993 10,568 14,128 10,028 1,582

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

GE Aerospace, Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

GE Aerospace, adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Total Asset Turnover
Reported total asset turnover 0.40 0.39 0.36 0.29 0.33
Adjusted total asset turnover 0.43 0.45 0.41 0.32 0.37
Financial Leverage
Reported financial leverage 5.96 5.16 4.93 7.13 9.40
Adjusted financial leverage 10.70 15.33 12.22 22.73 151.27
Return on Equity (ROE)
Reported ROE 34.63% 0.62% -16.17% 16.04% -17.58%
Adjusted ROE 67.76% 2.13% -46.15% 56.88% -314.73%
Return on Assets (ROA)
Reported ROA 5.81% 0.12% -3.28% 2.25% -1.87%
Adjusted ROA 6.34% 0.14% -3.78% 2.50% -2.08%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. GE Aerospace adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 GE Aerospace adjusted financial leverage ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. GE Aerospace adjusted ROE improved from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. GE Aerospace adjusted ROA improved from 2021 to 2022 and from 2022 to 2023.

GE Aerospace, Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Sales of equipment and services 64,565 73,602 71,090 73,022 87,487
Total assets 163,045 187,788 198,874 253,452 266,048
Activity Ratio
Total asset turnover1 0.40 0.39 0.36 0.29 0.33
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Sales of equipment and services 64,565 73,602 71,090 73,022 87,487
Adjusted total assets 149,660 161,990 172,692 227,928 239,314
Activity Ratio
Adjusted total asset turnover2 0.43 0.45 0.41 0.32 0.37

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Sales of equipment and services ÷ Total assets
= 64,565 ÷ 163,045 = 0.40

2 Adjusted total asset turnover = Sales of equipment and services ÷ Adjusted total assets
= 64,565 ÷ 149,660 = 0.43

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. GE Aerospace adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 163,045 187,788 198,874 253,452 266,048
Total GE shareholders’ equity 27,378 36,366 40,310 35,552 28,316
Solvency Ratio
Financial leverage1 5.96 5.16 4.93 7.13 9.40
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 149,660 161,990 172,692 227,928 239,314
Adjusted total GE shareholders’ equity 13,993 10,568 14,128 10,028 1,582
Solvency Ratio
Adjusted financial leverage2 10.70 15.33 12.22 22.73 151.27

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Total GE shareholders’ equity
= 163,045 ÷ 27,378 = 5.96

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total GE shareholders’ equity
= 149,660 ÷ 13,993 = 10.70

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 GE Aerospace adjusted financial leverage ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company 9,481 225 (6,520) 5,704 (4,979)
Total GE shareholders’ equity 27,378 36,366 40,310 35,552 28,316
Profitability Ratio
ROE1 34.63% 0.62% -16.17% 16.04% -17.58%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company 9,481 225 (6,520) 5,704 (4,979)
Adjusted total GE shareholders’ equity 13,993 10,568 14,128 10,028 1,582
Profitability Ratio
Adjusted ROE2 67.76% 2.13% -46.15% 56.88% -314.73%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net earnings (loss) attributable to the Company ÷ Total GE shareholders’ equity
= 100 × 9,481 ÷ 27,378 = 34.63%

2 Adjusted ROE = 100 × Net earnings (loss) attributable to the Company ÷ Adjusted total GE shareholders’ equity
= 100 × 9,481 ÷ 13,993 = 67.76%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. GE Aerospace adjusted ROE improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company 9,481 225 (6,520) 5,704 (4,979)
Total assets 163,045 187,788 198,874 253,452 266,048
Profitability Ratio
ROA1 5.81% 0.12% -3.28% 2.25% -1.87%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company 9,481 225 (6,520) 5,704 (4,979)
Adjusted total assets 149,660 161,990 172,692 227,928 239,314
Profitability Ratio
Adjusted ROA2 6.34% 0.14% -3.78% 2.50% -2.08%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net earnings (loss) attributable to the Company ÷ Total assets
= 100 × 9,481 ÷ 163,045 = 5.81%

2 Adjusted ROA = 100 × Net earnings (loss) attributable to the Company ÷ Adjusted total assets
= 100 × 9,481 ÷ 149,660 = 6.34%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. GE Aerospace adjusted ROA improved from 2021 to 2022 and from 2022 to 2023.