Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
GE Aerospace, short-term (operating) activity ratios
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
An examination of short-term operating activity ratios reveals several noteworthy trends between 2021 and 2025. Generally, efficiency metrics related to inventory and receivables demonstrate a weakening trend, while the working capital turnover exhibits substantial volatility and eventual improvement. The cash conversion cycle lengthened considerably over the period.
- Inventory Management
- Inventory turnover decreased consistently from 3.40 in 2021 to 2.44 in 2025, indicating a growing inefficiency in managing inventory. This decline is mirrored by an increasing average inventory processing period, rising from 107 days in 2021 to 150 days in 2025. This suggests that inventory is taking longer to sell, potentially due to slower sales, overstocking, or obsolescence.
- Receivables Management
- Receivables turnover experienced a slight decrease from 4.55 in 2021 to 3.59 in 2025. The average receivable collection period increased from 80 days to 102 days over the same timeframe. These changes suggest a lengthening of the time required to collect payments from customers, potentially indicating a loosening of credit terms or difficulties in collecting outstanding debts.
- Payables Management
- Payables turnover showed some fluctuation, decreasing from 3.32 in 2021 to 2.87 in 2025. The average payables payment period increased from 110 days to 127 days. This indicates a trend towards taking longer to pay suppliers, which could be a strategic decision to manage cash flow, but also potentially strain supplier relationships.
- Working Capital Efficiency
- Working capital turnover increased significantly from 4.94 in 2021 to 26.19 in 2025. This substantial increase suggests a more efficient utilization of working capital in generating revenue, particularly in the later years of the period. The large jump in 2024 and 2025 warrants further investigation to understand the underlying drivers of this improvement.
- Overall Operating Cycle & Cash Conversion
- The operating cycle lengthened from 187 days in 2021 to 252 days in 2025, reflecting the combined effect of slower inventory turnover and receivable collection. The cash conversion cycle also increased, rising from 77 days in 2021 to 125 days in 2025. This indicates that the company is taking longer to convert its investments in inventory and receivables into cash, potentially impacting liquidity.
In summary, while working capital turnover improved markedly towards the end of the period, the trends in inventory, receivables, and the cash conversion cycle suggest a decline in short-term operational efficiency. The lengthening of the operating and cash conversion cycles warrants attention and further investigation to identify the root causes and implement corrective measures.
Turnover Ratios
Average No. Days
Inventory Turnover
GE Aerospace, inventory turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of equipment and services sold | 28,968) | 24,308) | 50,392) | 55,535) | 53,896) | |
| Inventories, including deferred inventory costs | 11,868) | 9,763) | 16,528) | 17,403) | 15,847) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 2.44 | 2.49 | 3.05 | 3.19 | 3.40 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Boeing Co. | 1.01 | 0.78 | 0.88 | 0.81 | 0.75 | |
| Caterpillar Inc. | — | 2.39 | 2.58 | 2.54 | 2.53 | |
| Eaton Corp. plc | — | 3.64 | 3.95 | 4.04 | 4.48 | |
| Honeywell International Inc. | — | 3.70 | 3.72 | 4.04 | 4.29 | |
| Lockheed Martin Corp. | 19.13 | 18.46 | 18.87 | 18.68 | 19.45 | |
| RTX Corp. | — | 5.12 | 4.83 | 5.03 | 5.65 | |
| Inventory Turnover, Sector | ||||||
| Capital Goods | — | 2.14 | 2.30 | 2.28 | 2.28 | |
| Inventory Turnover, Industry | ||||||
| Industrials | — | 4.06 | 4.23 | 4.28 | 4.03 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Inventory turnover = Cost of equipment and services sold ÷ Inventories, including deferred inventory costs
= 28,968 ÷ 11,868 = 2.44
2 Click competitor name to see calculations.
The inventory turnover ratio demonstrates a consistent, albeit gradual, decline over the five-year period. Simultaneously, both cost of equipment and services sold and inventories experienced fluctuations, influencing the observed turnover trend.
- Inventory Turnover Trend
- The inventory turnover ratio decreased from 3.40 in 2021 to 2.44 in 2025. This indicates a lengthening of the average time it takes to sell inventory. The decline is not precipitous, suggesting a controlled shift rather than a sudden disruption in inventory management.
- Cost of Equipment and Services Sold
- Cost of equipment and services sold initially increased from US$53,896 million in 2021 to US$55,535 million in 2022. However, it then decreased to US$50,392 million in 2023, followed by a substantial drop to US$24,308 million in 2024. A partial recovery to US$28,968 million is noted in 2025. These fluctuations in cost of goods sold directly impact the inventory turnover calculation.
- Inventory Levels
- Inventories increased from US$15,847 million in 2021 to US$17,403 million in 2022, mirroring the increase in cost of goods sold. Inventory levels then decreased to US$16,528 million in 2023, and significantly to US$9,763 million in 2024, coinciding with the largest decrease in cost of goods sold. Inventory levels rose again to US$11,868 million in 2025. The correlation between inventory levels and cost of goods sold is apparent.
The most significant change in inventory turnover occurred between 2023 and 2024, dropping from 3.05 to 2.49. This coincides with the largest reduction in cost of equipment and services sold and a substantial decrease in inventory. The slight decrease from 2024 to 2025 (2.49 to 2.44) suggests the trend may be stabilizing at a lower level. Further investigation into the reasons behind the 2024 decline in cost of goods sold is warranted to fully understand the implications for inventory management.
Receivables Turnover
GE Aerospace, receivables turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales of equipment and services | 42,322) | 35,121) | 64,565) | 73,602) | 71,090) | |
| Current receivables | 11,773) | 9,327) | 15,466) | 17,976) | 15,620) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 3.59 | 3.77 | 4.17 | 4.09 | 4.55 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Boeing Co. | 30.63 | 25.28 | 29.37 | 26.46 | 23.58 | |
| Caterpillar Inc. | — | 6.61 | 6.86 | 6.39 | 5.68 | |
| Eaton Corp. plc | — | 5.39 | 5.18 | 5.09 | 5.95 | |
| Honeywell International Inc. | — | 4.92 | 4.87 | 4.77 | 5.04 | |
| Lockheed Martin Corp. | 19.24 | 30.22 | 31.69 | 26.34 | 34.15 | |
| RTX Corp. | — | 7.36 | 6.36 | 7.36 | 6.66 | |
| Receivables Turnover, Sector | ||||||
| Capital Goods | — | 8.05 | 7.68 | 7.36 | 7.57 | |
| Receivables Turnover, Industry | ||||||
| Industrials | — | 9.05 | 8.61 | 8.17 | 7.76 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Receivables turnover = Sales of equipment and services ÷ Current receivables
= 42,322 ÷ 11,773 = 3.59
2 Click competitor name to see calculations.
The receivables turnover ratio exhibited a generally declining trend over the five-year period. While fluctuations occurred, the overall movement suggests a lengthening of the cash conversion cycle related to receivables.
- Overall Trend
- The receivables turnover ratio decreased from 4.55 in 2021 to 3.59 in 2025. This indicates that, relative to sales, the company is collecting receivables less efficiently over time. The ratio’s decline is not monotonic, with a slight increase observed between 2022 and 2023, but the subsequent years demonstrate continued downward pressure.
- Year-over-Year Changes
- From 2021 to 2022, the receivables turnover ratio decreased from 4.55 to 4.09, representing a decline of approximately 10.5%. This initial decrease coincided with an increase in current receivables. A modest recovery occurred in 2023, with the ratio rising to 4.17. However, 2024 saw a more substantial decrease to 3.77, and this trend continued into 2025, with the ratio falling to 3.59.
- Relationship to Sales
- The decline in receivables turnover does not appear directly correlated with sales volume alone. While sales decreased significantly from 2022 to 2024, the receivables turnover ratio continued to decline even as sales began to recover in 2025. This suggests factors beyond overall sales volume are influencing the collection of receivables, such as changes in credit terms offered to customers, the mix of customers, or the effectiveness of collection efforts.
- Receivables Balance
- Current receivables generally tracked sales, increasing from 2021 to 2022, decreasing in 2023, and then declining more sharply in 2024 alongside the significant sales drop. The 2025 increase in sales was accompanied by an increase in receivables, contributing to the lower turnover ratio.
Further investigation is warranted to understand the underlying causes of the declining receivables turnover ratio. Analysis of the aging of receivables, credit policies, and collection procedures could provide valuable insights.
Payables Turnover
GE Aerospace, payables turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of equipment and services sold | 28,968) | 24,308) | 50,392) | 55,535) | 53,896) | |
| Accounts payable | 10,078) | 7,909) | 15,408) | 18,644) | 16,243) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 2.87 | 3.07 | 3.27 | 2.98 | 3.32 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Boeing Co. | 6.50 | 6.03 | 5.86 | 6.18 | 6.40 | |
| Caterpillar Inc. | — | 5.24 | 5.41 | 4.76 | 4.36 | |
| Eaton Corp. plc | — | 4.18 | 4.39 | 4.51 | 4.75 | |
| Honeywell International Inc. | — | 3.46 | 3.36 | 3.53 | 3.40 | |
| Lockheed Martin Corp. | 18.58 | 28.85 | 25.56 | 27.25 | 74.34 | |
| RTX Corp. | — | 5.07 | 5.31 | 5.40 | 5.93 | |
| Payables Turnover, Sector | ||||||
| Capital Goods | — | 5.73 | 5.42 | 5.21 | 5.60 | |
| Payables Turnover, Industry | ||||||
| Industrials | — | 8.65 | 8.07 | 7.83 | 7.81 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Payables turnover = Cost of equipment and services sold ÷ Accounts payable
= 28,968 ÷ 10,078 = 2.87
2 Click competitor name to see calculations.
The accounts payable activity demonstrates a fluctuating pattern over the five-year period. While the cost of equipment and services sold experienced volatility, accounts payable and the resulting payables turnover ratio exhibited distinct trends worthy of review.
- Cost of Equipment and Services Sold
- The cost of equipment and services sold increased from US$53,896 million in 2021 to US$55,535 million in 2022, before decreasing to US$50,392 million in 2023. A significant decline occurred in 2024, falling to US$24,308 million, followed by a partial recovery to US$28,968 million in 2025. This volatility suggests potential shifts in procurement strategies, supply chain dynamics, or overall business activity.
- Accounts Payable
- Accounts payable increased from US$16,243 million in 2021 to US$18,644 million in 2022, mirroring the increase in the cost of goods sold. A subsequent decrease to US$15,408 million was observed in 2023. The most substantial reduction occurred in 2024, with accounts payable falling to US$7,909 million, consistent with the lower cost of equipment and services sold. Accounts payable increased again in 2025, reaching US$10,078 million.
- Payables Turnover
- The payables turnover ratio began at 3.32 in 2021, decreased to 2.98 in 2022, and then rose slightly to 3.27 in 2023. A further decrease to 3.07 in 2024 was noted, followed by a decline to 2.87 in 2025. This indicates a lengthening of the average time taken to pay suppliers, particularly evident in the latter years of the period. The ratio’s movement generally aligns with the fluctuations in cost of equipment and services sold and accounts payable, but the 2025 value suggests a continued trend of slower payment cycles.
Overall, the observed trends suggest a dynamic relationship between purchasing activity and payment terms. The declining payables turnover ratio in the later years warrants further investigation to determine if it reflects strategic changes in supplier relationships, cash management practices, or potential challenges in maintaining optimal working capital efficiency.
Working Capital Turnover
GE Aerospace, working capital turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 40,596) | 37,635) | 59,799) | 66,234) | 66,348) | |
| Less: Current liabilities | 38,980) | 34,392) | 50,876) | 56,947) | 51,953) | |
| Working capital | 1,616) | 3,243) | 8,923) | 9,287) | 14,395) | |
| Sales of equipment and services | 42,322) | 35,121) | 64,565) | 73,602) | 71,090) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | 26.19 | 10.83 | 7.24 | 7.93 | 4.94 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Boeing Co. | 4.40 | 2.15 | 5.78 | 3.42 | 2.34 | |
| Caterpillar Inc. | — | 4.58 | 5.23 | 4.62 | 3.54 | |
| Eaton Corp. plc | — | 6.31 | 5.91 | 8.70 | 65.65 | |
| Honeywell International Inc. | — | 5.79 | 7.39 | 7.03 | 5.86 | |
| Lockheed Martin Corp. | 37.02 | 29.25 | 18.85 | 12.93 | 11.52 | |
| RTX Corp. | — | — | 41.62 | 20.15 | 9.75 | |
| Working Capital Turnover, Sector | ||||||
| Capital Goods | — | 6.28 | 8.26 | 6.79 | 5.01 | |
| Working Capital Turnover, Industry | ||||||
| Industrials | — | 10.82 | 13.27 | 10.34 | 6.90 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Working capital turnover = Sales of equipment and services ÷ Working capital
= 42,322 ÷ 1,616 = 26.19
2 Click competitor name to see calculations.
The working capital turnover ratio exhibits a significant and dynamic trend over the five-year period. Initially, the ratio increased substantially before experiencing considerable fluctuation. Working capital itself demonstrates a consistent decline throughout the period, while sales show a more complex pattern.
- Working Capital Turnover Trend
- The working capital turnover ratio began at 4.94 in 2021 and rose sharply to 7.93 in 2022. It then decreased slightly to 7.24 in 2023, before increasing dramatically to 10.83 in 2024. The most substantial increase occurred between 2024 and 2025, with the ratio reaching 26.19. This indicates an increasing efficiency in utilizing working capital to generate sales, particularly in the latter years of the period.
- Working Capital Trend
- Working capital decreased consistently from US$14,395 million in 2021 to US$1,616 million in 2025. This continuous reduction in working capital, coupled with the fluctuating sales figures, is a key driver of the observed changes in the turnover ratio. The largest decrease in working capital occurred between 2022 and 2023, and again between 2023 and 2024.
- Sales Trend
- Sales of equipment and services increased from US$71,090 million in 2021 to US$73,602 million in 2022. A decrease was then observed in 2023, with sales falling to US$64,565 million. Sales experienced a substantial decline in 2024, reaching US$35,121 million, before partially recovering to US$42,322 million in 2025. The interplay between these sales fluctuations and the declining working capital explains the ratio’s volatility.
The substantial increase in the working capital turnover ratio in 2025 suggests a significant improvement in the company’s ability to generate sales from its reduced working capital base. However, the prior decline in sales in 2024, followed by a partial recovery, warrants further investigation to understand the underlying factors influencing sales performance and their impact on working capital management.
Average Inventory Processing Period
GE Aerospace, average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 2.44 | 2.49 | 3.05 | 3.19 | 3.40 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 150 | 147 | 120 | 114 | 107 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Boeing Co. | 363 | 466 | 415 | 452 | 486 | |
| Caterpillar Inc. | — | 153 | 141 | 144 | 144 | |
| Eaton Corp. plc | — | 100 | 92 | 90 | 82 | |
| Honeywell International Inc. | — | 99 | 98 | 90 | 85 | |
| Lockheed Martin Corp. | 19 | 20 | 19 | 20 | 19 | |
| RTX Corp. | — | 71 | 76 | 73 | 65 | |
| Average Inventory Processing Period, Sector | ||||||
| Capital Goods | — | 171 | 159 | 160 | 160 | |
| Average Inventory Processing Period, Industry | ||||||
| Industrials | — | 90 | 86 | 85 | 91 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 2.44 = 150
2 Click competitor name to see calculations.
An examination of the presented financial metrics reveals a consistent lengthening of the average inventory processing period alongside a declining inventory turnover ratio over the five-year period. These trends suggest a potential slowdown in the efficiency of inventory management.
- Inventory Turnover
- The inventory turnover ratio decreased from 3.40 in 2021 to 2.44 in 2025. This indicates that inventory is being sold more slowly over time. The rate of decline was more pronounced between 2022 and 2023 (from 3.19 to 3.05) than between 2023 and 2024 (from 3.05 to 2.49), suggesting a possible acceleration of the slowdown in sales relative to inventory levels during that period. The decline stabilizes somewhat between 2024 and 2025.
- Average Inventory Processing Period
- The average inventory processing period increased steadily from 107 days in 2021 to 150 days in 2025. This lengthening period directly corresponds with the decreasing inventory turnover ratio. The increase between 2021 and 2023 was relatively consistent, adding approximately 6 days each year. A more substantial increase of 27 days occurred between 2023 and 2024, followed by a smaller increase of 3 days between 2024 and 2025. This suggests a significant disruption or change in inventory handling processes around 2024.
The combined trends suggest that the company is taking longer to convert its inventory into sales. Further investigation may be warranted to understand the underlying causes of these changes, such as shifts in product mix, changes in supply chain efficiency, or potential obsolescence of inventory.
Average Receivable Collection Period
GE Aerospace, average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 3.59 | 3.77 | 4.17 | 4.09 | 4.55 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 102 | 97 | 87 | 89 | 80 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Boeing Co. | 12 | 14 | 12 | 14 | 15 | |
| Caterpillar Inc. | — | 55 | 53 | 57 | 64 | |
| Eaton Corp. plc | — | 68 | 70 | 72 | 61 | |
| Honeywell International Inc. | — | 74 | 75 | 77 | 72 | |
| Lockheed Martin Corp. | 19 | 12 | 12 | 14 | 11 | |
| RTX Corp. | — | 50 | 57 | 50 | 55 | |
| Average Receivable Collection Period, Sector | ||||||
| Capital Goods | — | 45 | 48 | 50 | 48 | |
| Average Receivable Collection Period, Industry | ||||||
| Industrials | — | 40 | 42 | 45 | 47 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 3.59 = 102
2 Click competitor name to see calculations.
An examination of short-term activity ratios reveals a consistent lengthening in the average receivable collection period between 2021 and 2025. This trend is mirrored by a concurrent decline in the receivables turnover ratio over the same period.
- Average Receivable Collection Period
- The average receivable collection period increased steadily from 80 days in 2021 to 102 days in 2025. An initial increase to 89 days occurred between 2021 and 2022, followed by a slight decrease to 87 days in 2023. However, the period continued to lengthen in subsequent years, reaching 97 days in 2024 and culminating in 102 days in 2025. This indicates a growing delay in collecting payments from customers.
- Receivables Turnover
- The receivables turnover ratio exhibited a downward trend throughout the analyzed period. Starting at 4.55 in 2021, the ratio decreased to 4.09 in 2022 and 4.17 in 2023. Further declines were observed in 2024 (3.77) and 2025 (3.59). This suggests that the company is becoming less efficient in converting receivables into cash.
- Relationship between Ratios
- The inverse relationship between the average receivable collection period and the receivables turnover ratio is evident. As the collection period increases, the turnover ratio decreases, and vice versa. This confirms that a longer time to collect receivables directly contributes to a lower rate of converting those receivables into cash. The consistent pattern suggests a systematic change in credit policies, customer payment behavior, or collection efforts.
The observed trends warrant further investigation to determine the underlying causes of the lengthening collection period and declining turnover. Potential factors could include changes in credit terms offered to customers, an increase in the proportion of sales to customers with longer payment cycles, or inefficiencies in the accounts receivable collection process.
Operating Cycle
GE Aerospace, operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 150 | 147 | 120 | 114 | 107 | |
| Average receivable collection period | 102 | 97 | 87 | 89 | 80 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 252 | 244 | 207 | 203 | 187 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Boeing Co. | 375 | 480 | 427 | 466 | 501 | |
| Caterpillar Inc. | — | 208 | 194 | 201 | 208 | |
| Eaton Corp. plc | — | 168 | 162 | 162 | 143 | |
| Honeywell International Inc. | — | 173 | 173 | 167 | 157 | |
| Lockheed Martin Corp. | 38 | 32 | 31 | 34 | 30 | |
| RTX Corp. | — | 121 | 133 | 123 | 120 | |
| Operating Cycle, Sector | ||||||
| Capital Goods | — | 216 | 207 | 210 | 208 | |
| Operating Cycle, Industry | ||||||
| Industrials | — | 130 | 128 | 130 | 138 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 150 + 102 = 252
2 Click competitor name to see calculations.
The operating cycle has demonstrated a consistent lengthening trend over the five-year period. Each component contributing to the operating cycle – average inventory processing period and average receivable collection period – has also increased, contributing to the overall extended cycle length.
- Average Inventory Processing Period
- The average inventory processing period has increased steadily from 107 days in 2021 to 150 days in 2025. The rate of increase accelerated between 2022 and 2024, with a 33-day increase over those two years. This suggests a potential slowdown in inventory turnover or an increase in the time required to convert raw materials into finished goods.
- Average Receivable Collection Period
- The average receivable collection period also exhibits an upward trend, rising from 80 days in 2021 to 102 days in 2025. While the increase was more moderate than that of the inventory processing period, it still indicates a lengthening of the time required to collect payments from customers. The increase from 2023 to 2025 was 15 days, representing a more significant change than the prior two years.
- Operating Cycle
- Consequently, the operating cycle has lengthened from 187 days in 2021 to 252 days in 2025. This represents a 65-day increase over the period. The most substantial increase occurred between 2023 and 2025, with a 45-day extension. This extended cycle implies that the company is taking longer to convert its investments in inventory and other resources into cash.
The concurrent increases in both inventory processing and receivable collection periods suggest a systemic shift in the company’s operational efficiency. Further investigation into the underlying causes of these increases, such as changes in inventory management practices, credit policies, or customer payment behavior, would be beneficial.
Average Payables Payment Period
GE Aerospace, average payables payment period calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 2.87 | 3.07 | 3.27 | 2.98 | 3.32 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 127 | 119 | 112 | 123 | 110 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Boeing Co. | 56 | 61 | 62 | 59 | 57 | |
| Caterpillar Inc. | — | 70 | 67 | 77 | 84 | |
| Eaton Corp. plc | — | 87 | 83 | 81 | 77 | |
| Honeywell International Inc. | — | 105 | 109 | 103 | 107 | |
| Lockheed Martin Corp. | 20 | 13 | 14 | 13 | 5 | |
| RTX Corp. | — | 72 | 69 | 68 | 62 | |
| Average Payables Payment Period, Sector | ||||||
| Capital Goods | — | 64 | 67 | 70 | 65 | |
| Average Payables Payment Period, Industry | ||||||
| Industrials | — | 42 | 45 | 47 | 47 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 2.87 = 127
2 Click competitor name to see calculations.
The average payables payment period exhibited an increasing trend over the five-year period examined. Simultaneously, the payables turnover ratio demonstrated a generally decreasing pattern, though with some fluctuation. These movements suggest evolving dynamics in the company’s supplier relationships and working capital management.
- Payables Turnover
- The payables turnover ratio decreased from 3.32 in 2021 to 2.87 in 2025. While there was a slight increase from 2.98 in 2022 to 3.27 in 2023, the overall trend is downward. This indicates that the company is taking longer to pay its suppliers, or that purchases on credit are decreasing relative to cost of goods sold. The decline suggests a potential shift in purchasing practices or negotiating power with suppliers.
- Average Payables Payment Period
- The average payables payment period increased from 110 days in 2021 to 127 days in 2025. The period rose to 123 days in 2022, decreased slightly to 112 days in 2023, and then increased again to 119 days in 2024 before reaching 127 days in 2025. This lengthening of the payment period aligns with the decreasing payables turnover. A longer payment period could indicate improved cash flow management by extending payment terms with suppliers, or it could reflect difficulty in meeting payment obligations. The fluctuations suggest potential variations in supplier agreements or seasonal purchasing patterns.
The consistent inverse relationship between the payables turnover and the average payables payment period suggests a deliberate or consequential change in how the company manages its short-term liabilities. Further investigation into supplier contracts and purchasing strategies would be beneficial to understand the underlying drivers of these trends.
Cash Conversion Cycle
GE Aerospace, cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 150 | 147 | 120 | 114 | 107 | |
| Average receivable collection period | 102 | 97 | 87 | 89 | 80 | |
| Average payables payment period | 127 | 119 | 112 | 123 | 110 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 125 | 125 | 95 | 80 | 77 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Boeing Co. | 319 | 419 | 365 | 407 | 444 | |
| Caterpillar Inc. | — | 138 | 127 | 124 | 124 | |
| Eaton Corp. plc | — | 81 | 79 | 81 | 66 | |
| Honeywell International Inc. | — | 68 | 64 | 64 | 50 | |
| Lockheed Martin Corp. | 18 | 19 | 17 | 21 | 25 | |
| RTX Corp. | — | 49 | 64 | 55 | 58 | |
| Cash Conversion Cycle, Sector | ||||||
| Capital Goods | — | 152 | 140 | 140 | 143 | |
| Cash Conversion Cycle, Industry | ||||||
| Industrials | — | 88 | 83 | 83 | 91 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 150 + 102 – 127 = 125
2 Click competitor name to see calculations.
An examination of short-term operating activity reveals lengthening cycles across inventory processing, receivables collection, and payables payment. These changes collectively impact the cash conversion cycle, demonstrating an increasing trend over the observed period.
- Average Inventory Processing Period
- The average time to process inventory has consistently increased, moving from 107 days in 2021 to 150 days in 2025. This represents a 40% increase over the five-year period. The most significant increase occurred between 2022 and 2023 (7 days) and again between 2023 and 2024 (27 days), suggesting potential inefficiencies in inventory management or a shift towards holding larger inventories.
- Average Receivable Collection Period
- The average number of days to collect receivables also exhibits an upward trend, rising from 80 days in 2021 to 102 days in 2025. While the increase was moderate between 2021 and 2023 (7 days total), it accelerated between 2023 and 2025 (15 days). This suggests a potential slowing in the rate at which the company converts sales into cash, possibly due to changes in customer payment terms or increased difficulty in collecting outstanding balances.
- Average Payables Payment Period
- The average time taken to settle payables has generally increased, from 110 days in 2021 to 127 days in 2025. The period fluctuated, with a peak of 123 days in 2022, but ultimately demonstrates a lengthening trend. This could indicate the company is strategically extending its payment terms to suppliers to improve its short-term cash flow, or it may reflect a weakening negotiating position with vendors.
- Cash Conversion Cycle
- The cash conversion cycle, representing the time it takes to convert investments in inventory and other resources into cash flows from sales, has increased substantially. Starting at 77 days in 2021, it reached 125 days by 2025. The most pronounced increase occurred between 2023 and 2024 (30 days), and remained constant between 2024 and 2025. This lengthening cycle suggests the company is tying up more cash in its operations and may require careful monitoring to ensure sufficient liquidity.
In summary, the observed trends indicate a growing operational cycle. Further investigation into the underlying causes of these increases – including inventory management practices, credit policies, and supplier relationships – is recommended to assess potential risks and opportunities for improvement.