Stock Analysis on Net

GE Aerospace (NYSE:GE)

Analysis of Operating Leases

Microsoft Excel

Adjustments to Financial Statements for Operating Leases

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
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1
Total assets (adjusted) 163,045 187,788 198,874 253,452 266,048
Adjustment to Total Debt
Total debt (as reported) 20,964 32,350 35,185 75,066 90,882
Add: Operating lease liability (before adoption of FASB Topic 842)2
Add: Operating lease liabilities (included in All other liabilities) 1,973 2,393 2,848 2,973 3,162
Total debt (adjusted) 22,937 34,743 38,033 78,039 94,044

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).

1, 2 Equal to total present value of future operating lease payments.


GE Aerospace, Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (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 Turnover1
Reported total asset turnover 0.40 0.39 0.36 0.29 0.33
Adjusted total asset turnover 0.40 0.39 0.36 0.29 0.33
Debt to Equity2
Reported debt to equity 0.77 0.89 0.87 2.11 3.21
Adjusted debt to equity 0.84 0.96 0.94 2.20 3.32
Return on Assets3 (ROA)
Reported ROA 5.81% 0.12% -3.28% 2.25% -1.87%
Adjusted ROA 5.81% 0.12% -3.28% 2.25% -1.87%

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 and from 2022 to 2023.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. GE Aerospace adjusted debt to equity ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
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 Operating Leases
Selected Financial Data (US$ in millions)
Sales of equipment and services 64,565 73,602 71,090 73,022 87,487
Adjusted total assets 163,045 187,788 198,874 253,452 266,048
Activity Ratio
Adjusted total asset turnover2 0.40 0.39 0.36 0.29 0.33

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 ÷ 163,045 = 0.40

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 and from 2022 to 2023.

Adjusted Debt to Equity

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 debt 20,964 32,350 35,185 75,066 90,882
Total GE shareholders’ equity 27,378 36,366 40,310 35,552 28,316
Solvency Ratio
Debt to equity1 0.77 0.89 0.87 2.11 3.21
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 22,937 34,743 38,033 78,039 94,044
Total GE shareholders’ equity 27,378 36,366 40,310 35,552 28,316
Solvency Ratio
Adjusted debt to equity2 0.84 0.96 0.94 2.20 3.32

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 Debt to equity = Total debt ÷ Total GE shareholders’ equity
= 20,964 ÷ 27,378 = 0.77

2 Adjusted debt to equity = Adjusted total debt ÷ Total GE shareholders’ equity
= 22,937 ÷ 27,378 = 0.84

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. GE Aerospace adjusted debt-to-equity ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

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 Operating Leases
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 163,045 187,788 198,874 253,452 266,048
Profitability Ratio
Adjusted ROA2 5.81% 0.12% -3.28% 2.25% -1.87%

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 ÷ 163,045 = 5.81%

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.