GE Aerospace (NYSE:GE)

The financial metrics presented demonstrate notable shifts over the five-year period. Generally, adjusted ratios reveal a different financial picture than reported figures, often indicating a more conservative or comprehensive assessment of the company’s performance. Several key trends emerge when examining these ratios.

Asset Turnover

Both reported and adjusted total asset turnover initially increased from 2021 to 2023, peaking at 0.40 and 0.42 respectively. However, a decline is observed in 2024, with a slight recovery in 2025. The adjusted ratio consistently exceeds the reported ratio, suggesting that adjustments enhance the measure of asset efficiency.

Liquidity

The reported current ratio exhibits a gradual decline throughout the period, falling from 1.28 to 1.04. The adjusted current ratio mirrors this trend, though remaining consistently higher than the reported value. This suggests that adjustments to current assets and liabilities improve the liquidity position as measured by this ratio.

Leverage

Reported debt to equity initially decreased before increasing significantly in 2024 and 2025, reaching 1.10 and 1.60 respectively. Conversely, the adjusted debt to equity ratio shows a more consistent increase over the period, starting at 1.01 and rising to 1.60. A similar pattern is observed in debt to capital ratios. Reported financial leverage steadily increased, while adjusted financial leverage showed a more pronounced increase, particularly from 2023 onwards, indicating a growing reliance on debt financing when considering adjustments.

Profitability

The reported net profit margin experienced a dramatic turnaround, moving from a negative value in 2021 to positive and increasing values in subsequent years, reaching 20.57 in 2025. However, the adjusted net profit margin presents a contrasting picture, showing a negative value in 2022 and a peak in 2024, followed by a decrease in 2025. This divergence highlights the impact of adjustments on reported profitability. The adjusted ROE and ROA also show significant fluctuations, with adjusted ROE peaking in 2024 and adjusted ROA remaining relatively stable.

Return on Investment

Reported ROE and ROA both show substantial improvement over the period, indicating increased profitability relative to equity and assets. However, the adjusted ROE and ROA exhibit different trends, with adjusted ROE initially negative in 2022 and adjusted ROA remaining lower than reported ROA throughout the period. This suggests that adjustments reduce the measured returns on investment.

In summary, the adjusted ratios consistently present a different perspective on the company’s financial health compared to the reported figures. While reported metrics indicate improving profitability and efficiency, the adjusted ratios suggest a more cautious interpretation, particularly regarding leverage and returns on investment. The discrepancies between reported and adjusted values warrant further investigation to understand the nature and impact of the adjustments being made.

The adjusted total asset turnover ratio exhibited fluctuations over the five-year period. Initially, the ratio increased before stabilizing and then experiencing a decline. Sales of equipment and services and total assets both decreased over the period, influencing the ratio’s behavior.

Adjusted Total Asset Turnover – Overall Trend

The adjusted total asset turnover ratio began at 0.38 in 2021, increased to a peak of 0.42 in both 2022 and 2023, then decreased to 0.30 in 2024, and partially recovered to 0.34 in 2025. This suggests an initial period of improved asset utilization followed by a weakening, and a slight recovery in the most recent year.

Sales of Equipment and Services

Adjusted sales of equipment and services demonstrated an initial increase from US$71.356 billion in 2021 to US$73.736 billion in 2022. However, a significant decline was observed in 2023, falling to US$64.504 billion, and continued downward to US$35.098 billion in 2024. A partial recovery to US$42.332 billion occurred in 2025, but sales remained below the levels seen in 2021 and 2022.

Total Assets

Adjusted total assets consistently decreased throughout the period. Starting at US$189.093 billion in 2021, assets decreased to US$176.942 billion in 2022, US$153.117 billion in 2023, US$116.135 billion in 2024, and US$122.804 billion in 2025. The decrease in assets was most pronounced between 2023 and 2024, although a slight increase was noted in 2025.

Relationship Between Sales and Assets

The initial increase in the adjusted total asset turnover ratio in 2022 coincided with both an increase in adjusted sales and a decrease in adjusted total assets. The subsequent decline in the ratio from 2023 to 2024 was driven by a more substantial decrease in adjusted sales than in adjusted total assets. The partial recovery in 2025 was associated with a modest increase in sales and a smaller increase in total assets.

The observed trends suggest that the company’s ability to generate sales from its asset base has been impacted by declining sales, particularly in 2024. While asset reduction may contribute to a higher turnover ratio, the significant drop in sales outweighed this effect. The slight recovery in 2025 indicates a potential stabilization, but further monitoring is warranted.

The adjusted current ratio exhibited a generally declining trend over the five-year period from 2021 to 2025. While fluctuations occurred, the overall movement suggests a weakening in the company’s short-term liquidity position when considering adjustments to both assets and liabilities.

Adjusted Current Ratio Trend

In 2021, the adjusted current ratio stood at 1.38. It decreased to 1.25 in 2022 and remained stable at 1.25 in 2023. A further decline was observed in 2024, falling to 1.13, and continued to decrease to 1.07 in 2025. This indicates a progressively smaller margin of current assets available to cover current liabilities after adjustments are made.

Comparison with Reported Current Ratio

The adjusted current ratio consistently exceeded the reported current ratio across all observed years. This suggests that the adjustments made to current assets and liabilities positively impact the liquidity position as measured by this ratio. The difference between the adjusted and reported ratios varied, but generally remained within a range of 0.10 to 0.22, indicating a material impact from the adjustments.

Adjusted Current Assets and Liabilities

Adjusted current assets showed a slight increase from US$67,422 million in 2021 to US$67,093 million in 2022, followed by a decrease to US$60,446 million in 2023. Further reductions were seen in 2024 and 2025, reaching US$37,741 million and US$40,690 million respectively. Adjusted current liabilities followed a similar pattern, decreasing from US$49,027 million in 2021 to US$48,252 million in 2023, then decreasing to US$33,441 million in 2024 and US$38,068 million in 2025. The larger percentage decrease in adjusted current assets compared to adjusted current liabilities contributed to the declining trend in the adjusted current ratio.

The observed decline in the adjusted current ratio warrants further investigation into the nature of the adjustments made to current assets and liabilities, and their underlying drivers. A ratio approaching 1.0 suggests a diminishing buffer for meeting short-term obligations.

The adjusted debt to equity ratio exhibits an increasing trend over the observed period. While total debt and shareholders’ equity both decreased from 2021 to 2025, the adjusted figures reveal a different dynamic, resulting in a rising ratio. This suggests that the adjustments made to debt and equity have a significant impact on the leverage profile of the entity.

Adjusted Debt to Equity Ratio - Overall Trend

The adjusted debt to equity ratio began at 1.01 in 2021 and increased to 1.60 by 2025. This represents a substantial increase in leverage over the five-year period. The most significant increase occurred between 2023 and 2025, moving from 1.01 to 1.60.

Adjusted Debt

Adjusted total debt increased from US$38,033 million in 2021 to US$21,557 million in 2025. While there was a decrease in reported total debt, the adjusted total debt remained relatively stable, fluctuating between US$34,743 million and US$22,937 million during the period. This indicates that the adjustments to debt are consistently adding to the overall debt figure.

Adjusted Equity

Adjusted total equity experienced a more pronounced decrease, falling from US$37,546 million in 2021 to US$13,510 million in 2025. This decline in adjusted equity, coupled with the relatively stable adjusted debt, is the primary driver of the increasing adjusted debt to equity ratio.

Comparison to Reported Debt to Equity

The reported debt to equity ratio showed more fluctuation, decreasing from 0.87 in 2021 to 0.77 in 2022, then increasing to 1.10 in 2025. However, the adjusted ratio consistently remained above 1.0, indicating a higher level of financial leverage than the reported ratio suggests, and the gap between the two widened over time. This divergence highlights the importance of understanding the nature of the adjustments being made.

The increasing adjusted debt to equity ratio warrants further investigation into the specific adjustments applied to debt and equity. Understanding the rationale behind these adjustments is crucial for a comprehensive assessment of the entity’s financial risk and overall financial health.

The information presents a five-year trend of debt and capital figures, culminating in calculated ratios. Total debt and total capital both demonstrate a decreasing trend from 2021 to 2024, followed by a slight increase in 2025. However, the adjusted figures reveal a different dynamic, particularly in the debt-to-capital ratio.

Total Debt and Total Capital

Total debt decreased from US$35,185 million in 2021 to US$19,273 million in 2024, before increasing to US$20,494 million in 2025. Total capital followed a similar pattern, declining from US$75,495 million in 2021 to US$38,615 million in 2024, and then increasing slightly to US$39,171 million in 2025. The magnitude of the decrease in capital is greater than that of debt, contributing to the changes observed in the debt-to-capital ratios.

Reported Debt to Capital

The reported debt-to-capital ratio remained relatively stable between 2021 and 2023, fluctuating around 0.47. A noticeable increase is observed in 2024, rising to 0.50, and continuing to 0.52 in 2025. This suggests a growing proportion of debt relative to capital as conventionally measured.

Adjusted Total Debt and Adjusted Total Capital

Adjusted total debt mirrors the trend of reported total debt, decreasing from US$38,033 million in 2021 to US$20,378 million in 2024, then increasing to US$21,557 million in 2025. Adjusted total capital exhibits a more substantial decline from US$75,579 million in 2021 to US$34,901 million in 2024, with a modest increase to US$35,067 million in 2025. The adjustments made to capital appear to have a more pronounced effect than those made to debt.

Adjusted Debt to Capital

The adjusted debt-to-capital ratio shows a consistent upward trend. Starting at 0.50 in 2021, it increased to 0.51 in 2022, remained at 0.50 in 2023, and then rose more significantly to 0.58 in 2024 and 0.61 in 2025. This indicates that, after adjustments, the company is relying more heavily on debt financing relative to its capital base. The increasing trend is more pronounced than that observed in the reported debt-to-capital ratio, suggesting the adjustments are revealing a different financial picture.

In summary, while reported ratios suggest a relatively stable or slightly increasing leverage, the adjusted ratios indicate a more substantial and consistent increase in debt relative to capital over the five-year period. This divergence warrants further investigation into the nature of the adjustments made and their impact on the overall financial risk profile.

An examination of the financial information reveals a consistent increase in adjusted financial leverage over the five-year period. This trend is observed alongside decreasing total assets and shareholders’ equity. The adjusted leverage metric consistently exceeds the reported financial leverage, suggesting the adjustments made to assets and equity significantly impact the leverage calculation.

Total Assets & Equity

Total assets demonstrate a general decline from US$198,874 million in 2021 to US$123,140 million in 2024, with a slight increase to US$130,169 million in 2025. Shareholders’ equity exhibits a similar downward trajectory, decreasing from US$40,310 million in 2021 to US$18,677 million in 2025. The adjusted values for both assets and equity follow the same pattern, though the magnitudes of the decreases are slightly different.

Reported Financial Leverage

Reported financial leverage increased steadily from 4.93 in 2021 to 6.97 in 2025. This indicates a growing proportion of assets financed by debt relative to equity, based on reported figures.

Adjusted Financial Leverage

Adjusted financial leverage shows a more pronounced increase than the reported leverage. Starting at 5.04 in 2021, it rises to 9.09 in 2025. The largest single-year increase occurs between 2023 and 2024, moving from 6.77 to 8.00. This suggests that the adjustments to total assets and equity have a substantial effect on the calculated leverage ratio, and that the company’s financial risk, as measured by this adjusted metric, is increasing at a faster rate than indicated by the reported figures.

The divergence between reported and adjusted leverage suggests the adjustments are removing items from assets or equity that, when included, reduce the leverage ratio. The consistent upward trend in adjusted financial leverage, coupled with declining asset and equity values, warrants further investigation into the nature of these adjustments and their underlying causes.

The adjusted net profit margin exhibited considerable fluctuation over the five-year period. Initial values were strong, followed by a significant decline, and then a recovery with subsequent moderation. A detailed examination of the trends reveals key insights into the company’s profitability performance.

Adjusted Net Profit Margin - Overall Trend

The adjusted net profit margin began at 11.14% in 2021. It experienced a substantial decrease in 2022, falling to -3.26%. A recovery was then observed in 2023, reaching 8.82%, followed by a marked increase to 25.63% in 2024. The most recent year, 2025, saw a decrease to 18.32%.

Adjusted Net Profit Margin - 2021-2022

The period between 2021 and 2022 demonstrates a significant shift from positive to negative profitability based on the adjusted figures. While adjusted sales remained relatively stable, the adjusted net income experienced a considerable decline, driving the margin into negative territory. This suggests a substantial increase in costs or a decrease in revenue quality not fully captured in the reported sales figures.

Adjusted Net Profit Margin - 2023-2024

From 2023 to 2024, the adjusted net profit margin showed a strong upward trend. This improvement coincided with an increase in adjusted net income, despite a decrease in adjusted sales. This indicates improved cost management or a shift towards higher-margin products or services. The 2024 margin of 25.63% represents the highest value within the observed period.

Adjusted Net Profit Margin - 2024-2025

The adjusted net profit margin decreased from 25.63% in 2024 to 18.32% in 2025. This decline occurred alongside a modest increase in adjusted sales. The reduction in margin suggests that while revenue increased, profitability did not keep pace, potentially due to rising costs or pricing pressures.

Relationship to Sales

The adjusted sales of equipment and services generally decreased from 2021 to 2024, before increasing slightly in 2025. The fluctuations in the adjusted net profit margin do not appear to be directly correlated with sales volume alone, indicating that factors beyond revenue generation significantly influence profitability. The substantial margin improvement in 2024, despite lower sales, supports this observation.

In conclusion, the adjusted net profit margin demonstrates a volatile pattern. While the company experienced a period of strong profitability in 2024, the subsequent decline in 2025 warrants further investigation to understand the underlying drivers and potential sustainability of future performance.

The period between 2021 and 2025 demonstrates significant fluctuations in financial performance as reflected in adjusted return on equity. Initial observations reveal a substantial shift from negative to positive earnings, followed by periods of high growth and eventual stabilization.

Adjusted Return on Equity (ROE) - Overall Trend

Adjusted ROE experienced considerable volatility throughout the analyzed period. Beginning at 21.17% in 2021, it declined sharply to -7.32% in 2022. A recovery was then observed, with adjusted ROE reaching 25.16% in 2023, before accelerating to 61.95% in 2024 and moderating slightly to 57.41% in 2025. This indicates a period of initial strength, followed by challenges, and then a strong rebound and subsequent stabilization.

Adjusted Net Income and Equity Relationship

The movement in adjusted ROE closely mirrors the combined trends of adjusted net income and adjusted total equity. While adjusted net income was positive in 2021 and 2023-2025, it was negative in 2022. Simultaneously, adjusted total equity consistently decreased throughout the period, from US$37,546 million in 2021 to US$13,510 million in 2025. The substantial increase in adjusted ROE in 2024 and 2025 occurred despite the continued decline in adjusted total equity, suggesting a significant improvement in profitability relative to the shrinking equity base.

Comparison with Reported ROE

Reported ROE exhibited a similar pattern of recovery from a substantial loss in 2021, but generally remained lower than adjusted ROE. The difference between reported and adjusted ROE suggests the presence of significant adjustments impacting net income. Reported ROE increased from -16.17% in 2021 to 46.60% in 2025, while adjusted ROE moved from 21.17% to 57.41% over the same period. The widening gap between the two metrics in later years indicates that adjustments had a growing impact on the overall return picture.

In summary, the financial performance, as indicated by adjusted ROE, underwent a period of significant change. The company navigated a period of loss in 2022, followed by substantial recovery and growth in subsequent years. The continued decrease in adjusted total equity alongside increasing adjusted ROE suggests improving efficiency in generating returns from a diminishing equity base.

The period between 2021 and 2025 demonstrates significant fluctuations in financial performance as reflected in adjusted return on assets. Initial observations reveal a substantial shift from negative to positive net income, impacting the adjusted ROA accordingly. A detailed examination of the adjusted ROA alongside its components provides further insight.

Adjusted Return on Assets (ROA) - Overall Trend

Adjusted ROA began at 4.20% in 2021, decreased to -1.36% in 2022, then rose to 3.72% in 2023. A marked increase occurred in 2024, reaching 7.75%, followed by a slight decline to 6.32% in 2025. This indicates a period of initial instability followed by improvement and then stabilization.

Adjusted Net Income

Adjusted net income exhibited volatility. A positive value of US$7,950 million in 2021 was followed by a loss of US$2,405 million in 2022. Subsequent years showed recovery, with US$5,689 million in 2023, US$8,997 million in 2024, and US$7,756 million in 2025. The 2024 peak in adjusted net income significantly contributed to the corresponding high in adjusted ROA.

Adjusted Total Assets

Adjusted total assets consistently decreased from US$189,093 million in 2021 to US$116,135 million in 2024. A modest increase was observed in 2025, reaching US$122,804 million. The declining asset base, coupled with improving adjusted net income, likely contributed to the increase in adjusted ROA from 2023 to 2024.

Relationship between Adjusted Net Income and Adjusted ROA

A strong correlation exists between adjusted net income and adjusted ROA. The negative adjusted net income in 2022 directly resulted in the negative adjusted ROA for that year. Conversely, the increases in adjusted net income in 2023, 2024, and 2025 were accompanied by corresponding increases in adjusted ROA, although the magnitude of the ROA increase was moderated by the concurrent decrease in adjusted total assets.

Comparison to Reported ROA

Reported ROA also showed improvement over the period, moving from -3.28% in 2021 to 6.69% in 2025. While both reported and adjusted ROA trends are similar, the adjusted figures differ in magnitude, indicating the impact of the adjustments made to net income and total assets. The adjustments consistently resulted in a higher ROA than the reported figures, except in 2022.

In conclusion, the adjusted ROA demonstrates a recovery and stabilization trend following an initial period of negative performance. The interplay between adjusted net income and adjusted total assets is a key driver of this trend, with the significant reduction in asset base partially offsetting the positive impact of increased profitability in later years.