GE Aerospace (NYSE:GE)

Current Ratio

The current ratio exhibited an upward trajectory from March 2020 through March 2021, increasing from 1.14 to a peak of 1.96. This suggests improving short-term liquidity during this period. However, beginning in June 2021, the ratio demonstrated a declining trend, reaching a low of 1.08 by March 2025. The decline indicates a gradual reduction in the company’s ability to cover current liabilities with current assets as time progressed beyond early 2021.

Quick Ratio

The quick ratio showed a similar, albeit less pronounced, pattern compared to the current ratio. It increased from 0.91 in March 2020 to a high of 1.27 in December 2020, indicating enhanced liquidity excluding inventory. Following that peak, the ratio experienced fluctuations but generally moved downward, stabilizing around the 0.7 to 0.8 range from late 2021 onwards. The slight rebound periods were short-lived, implying persistent pressure on liquid assets relative to current liabilities.

Cash Ratio

The cash ratio demonstrated the lowest values among the three liquidity measures and followed a declining trend overall. It started at 0.67 in March 2020, rose modestly to 0.78 in December 2020, and then decreased continuously to 0.38 by March 2025. This trend indicates a gradual decrease in the company's cash and cash equivalents relative to its current liabilities, suggesting reduced absolute immediate liquidity over the analyzed timeframe.

Overall Insights

The liquidity ratios collectively reveal an initial phase of strengthening liquidity from early 2020 through the end of 2020 or early 2021. Thereafter, a sustained decline is observed in all three ratios, indicating a tightening liquidity position. The current ratio’s peak at 1.96 implies substantial short-term coverage, but the subsequent decline to near 1.08 signals nearing minimal acceptable liquidity levels. The quick and cash ratios’ declines point to a decreasing buffer of highly liquid assets. This pattern might reflect operational or strategic changes affecting working capital management or shifts in business conditions impacting cash flow and asset structure.

Current Assets

The current assets demonstrated significant fluctuation over the observed periods. Starting at 80,174 million USD in March 2020, they initially declined slightly through September 2020, then increased sharply to peak at 113,198 million USD by March 2021. Following this peak, there was a notable downward trend, with current assets decreasing steadily and reaching approximately 37,575 million USD by March 2025. This indicates a substantial reduction, almost halving the value from early 2021 to early 2025, suggesting possible asset liquidation or a shift in asset structure.

Current Liabilities

Current liabilities also showed variability but with less pronounced fluctuations compared to current assets. Starting from 70,305 million USD in March 2020, liabilities decreased until approximately December 2020, then experienced moderate oscillations without a clear long-term trend until the end of 2021. From early 2022 onward, current liabilities remained relatively stable between roughly 48,000 and 51,000 million USD, before declining significantly from 51,087 million USD in June 2024 to 34,941 million USD by March 2025. This reduction aligns with the decline in current assets but was less steep overall.

Current Ratio

The current ratio showed an initial upward trend from 1.14 in March 2020 to a peak of 1.96 in March 2021, reflecting improved short-term liquidity during that period. Subsequently, the ratio declined sharply to 1.28 by December 2021 and stabilized around 1.1 to 1.25 through most of 2022 and 2023. From mid-2024 onwards, a gradual decline in the current ratio is observed, reaching 1.08 by March 2025. Though decreasing, it remained above 1.0 throughout, indicating that current assets consistently exceeded current liabilities, but the margin for liquidity safety narrowed over time.

Summary

The data reflect a period of strong liquidity growth culminating in early 2021, followed by a steady and significant reduction in current assets. Current liabilities remained more stable but ultimately decreased in the later periods. The current ratio, indicating liquidity health, peaked in early 2021 and then declined gradually, signaling a tightening of liquidity despite remaining above the critical threshold of 1. This trend suggests a potential strategic shift in asset management or operational cash flows, warranting further investigation into the underlying causes of asset reduction and its impact on working capital management.

Total Quick Assets

The total quick assets exhibited a fluctuating trend over the observed periods. Starting at $64,211 million in March 2020, there was a decline until June 2021, reaching a low of $50,894 million. Subsequently, quick assets showed some recovery through December 2022, peaking at $45,935 million. However, from that point onward, there was a general downward trend with minor fluctuations, reaching approximately $25,998 million in March 2025, the lowest value in the timeframe presented.

Current Liabilities

Current liabilities declined initially from $70,305 million in March 2020 to around $51,953 million by December 2021. After December 2021, current liabilities showed a relatively stable trend with minor variations, maintaining figures in the range of approximately $48,177 million to $51,087 million through June 2024. A noticeable sharp decrease occurred between June 2024 and March 2025, declining to around $34,941 million in the last period analyzed.

Quick Ratio

The quick ratio demonstrated considerable variability throughout the timeline. Starting below parity at 0.91 in March 2020, it peaked significantly at 1.27 in December 2020, suggesting a strong liquidity position at that point. Following this peak, the ratio decreased steadily and hovered around the 0.75 to 0.9 range from mid-2021 through early 2025. Toward the end, the ratio declined to approximately 0.74 by March 2025, indicating a relatively weaker liquidity stance compared to the earlier periods.

Overall Insights

Over the full span, the data suggests a decline in available liquid assets relative to current liabilities, mirrored in the deterioration of the quick ratio after its 2020 peak. While current liabilities showed some periods of reduction, the decrease in quick assets was more pronounced, particularly in the latter quarters. This pattern indicates increased liquidity pressure and potentially tighter short-term financial flexibility as the quick ratio moved below 1. The company may need to address this declining liquidity ratio to mitigate risks associated with meeting short-term obligations.

The analysis of the financial data reveals several trends and patterns across the reported quarters.

Total Cash Assets

Total cash assets exhibit a general declining trend over the observed period. Beginning at approximately 47.3 billion USD in Q1 2020, cash assets decreased with some fluctuations, reaching around 13.4 billion USD by Q1 2025. Notable declines occurred from Q1 2020 to Q2 2021, with a reduction from 47,286 million to 28,594 million USD. Cash reserves continued to fluctuate but generally declined thereafter, with some mild recoveries in quarters such as Q4 2020, Q4 2022, and Q4 2023.

Current Liabilities

Current liabilities showed variability but remained within a narrower band compared to total cash assets. Starting at around 70.3 billion USD in Q1 2020, current liabilities generally hovered between roughly 34.8 billion and 57 billion USD throughout the timeline. There was a significant drop after Q2 2023, dropping from approximately 48.1 billion USD to roughly 32.8 billion USD in Q3 2024, before leveling off near 34.9 billion USD by Q1 2025.

Cash Ratio

The cash ratio, defined as total cash assets divided by current liabilities, declined over the course of the period, indicating a decreasing short-term liquidity position. The ratio began at 0.67 in Q1 2020, increased slightly to peak at 0.78 by Q4 2020, and then mostly trended downward. By Q1 2025, the cash ratio fell to approximately 0.38. Several quarters exhibit minor recoveries in the cash ratio, including Q4 2022 and Q4 2023, but the general trend remains one of deterioration.

In summary, the data suggest that total cash assets decreased substantially over the five-year span, while current liabilities followed a less volatile but declining trend particularly in the later quarters. The lowering of the cash ratio highlights a gradual reduction in the company's immediate liquidity buffer relative to its short-term obligations. This might reflect changes in cash management strategy, capital expenditure, debt repayments, or operational cash flows requiring further investigation for holistic assessment.