General Dynamics Corp. (NYSE:GD)

Current Income Tax Expense

The current income tax expense shows a consistent decrease over the analyzed period, declining from 970 million US dollars at the end of 2015 to 626 million US dollars by the end of 2019. This downward trend suggests a reduction in the company's taxable income or effective current tax rates over these years.

Deferred Income Tax Expense

The deferred income tax expense exhibits significant variability throughout the period. Starting at 167 million US dollars in 2015, it rises sharply to 376 million in 2016 and further increases to 401 million in 2017. However, in 2018, it reverses substantially, shifting to a negative value of -3 million US dollars, indicating a deferred tax benefit rather than an expense. In 2019, it returns to a positive but lower figure of 92 million US dollars. This fluctuation may denote changes in temporary differences, tax planning strategies, or adjustments in deferred tax assets and liabilities.

Provision for Income Taxes, Net

The net provision for income taxes follows the general downward pattern observed in the current tax expense, decreasing from 1,137 million US dollars in 2015 to 718 million US dollars in 2019. Notably, there is a pronounced drop between 2017 and 2018, where the provision decreases from 1,165 million to 727 million US dollars. This significant reduction aligns with the negative deferred tax expense in 2018, which likely contributed to lowering the net tax provision for that year.

Overall Insights

The data reveals a trend of declining current tax expenses and net income tax provisions over the five-year horizon, suggesting either a decrease in taxable profits or improved tax planning strategies. The volatility in deferred tax expenses, particularly the shift to a deferred tax benefit in 2018, indicates complex underlying changes in temporary differences or tax regulations impacting deferred tax calculations. The substantial fluctuation in the deferred component is a key driver of changes in the net tax provision, especially notable in the sharp decrease seen in 2018.

Statutory Federal Income Tax Rate

The statutory federal income tax rate remained steady at 35% from 2015 to 2017, followed by a significant reduction to 21% in 2018 and 2019. This reflects a notable tax reform impact starting in 2018.

State Tax on Commercial Operations

The state tax rate on commercial operations, net of federal benefits, showed a slight increase from 0.6% in 2015-2017 to a peak of 1.1% in 2018, then decreased back to 0.7% in 2019.

Impact of International Operations

The impact of international operations was negative and rising in magnitude from -1.4% in 2015 to -4.5% in 2017, indicating increasing tax burdens or adjustments internationally. However, this reversed sharply to positive values of 0.6% in 2018 and 0.2% in 2019, suggesting improved international tax effects or operational shifts.

Domestic Production Deduction

The domestic production deduction, which was consistently negative and similar in magnitude around -1.3% to -1.6% from 2015 through 2017, was no longer reported in 2018 and 2019. This likely aligns with tax law changes eliminating or modifying this deduction.

Foreign Derived Intangible Income

Data for foreign derived intangible income deductions appeared only starting in 2018 and 2019, with values of -1.2% and -1.4%, respectively, indicating the introduction of this new tax benefit related to intangible income abroad.

Equity-based Compensation

Equity-based compensation tax effects were negative and increased from -2.6% in 2017 to -1.1% in both 2018 and 2019, indicating a reduction in tax benefit or expense impact over time in this category.

Domestic Tax Credits

Domestic tax credits remained relatively steady from 2015 to 2018, between -0.8% and -1.1%, but doubled to -2.0% in 2019, suggesting a significant increase in credits utilized or available in the last year analyzed.

Contract Close-Outs

The tax effect from contract close-outs was notable at -2.9% in 2015 but absent in most other years except for a minor -0.5% in 2018, indicating a one-time or sporadic tax impact event.

Other, Net

The miscellaneous tax effects grouped as "Other, net" fluctuated without a clear trend, ranging from -0.9% in 2015 down to -0.1% in 2016, then between -0.5% and -1.0% in 2017 and 2018, before easing to -0.3% in 2019.

Effective Income Tax Rate Before Adoption Impact

The effective income tax rate before considering tax law changes steadily declined from 27.7% in 2015 and 2016 to 25.7% in 2017, with a sharp decrease to 17.8% in 2018 and a slight further decrease to 17.1% in 2019. This trend strongly reflects the influence of legislative changes reducing overall tax burden.

Adoption Impact of Enacted Change in U.S. Tax Law

There was a positive adjustment of 2.9% to the effective income tax rate in 2017 related to the adoption impact of enacted U.S. tax law changes, likely reflecting the accounting effects of the new tax rules.

Effective Income Tax Rate

The reported effective income tax rate, which includes the adoption impact, was consistent with the pre-adoption trend, showing stability at 27.7% and 27.6% in 2015 and 2016, a rise to 28.6% in 2017 due to the adoption impact, followed by a significant drop to 17.8% in 2018 and 17.1% in 2019. This reinforces the conclusion that the company’s effective tax rate was substantially lowered beginning in 2018 due to U.S. tax reform.

Retirement Benefits

The retirement benefits showed a fluctuating pattern, starting at 1,347 million USD in 2015, rising to 1,461 million USD in 2016, then decreasing significantly to 935 million USD in 2017. Subsequently, there was a modest increase to 1,055 million USD by 2018 and 1,097 million USD in 2019.

Lease Assets

This category only reported data in 2019, with a value of 418 million USD, indicating the possible introduction or recognition of lease assets in that year.

Tax Loss and Credit Carryforwards

There was a steady decline in tax loss and credit carryforwards from 522 million USD in 2015 down to 323 million USD in 2019, suggesting a consistent utilization or expiration of these tax benefits over the period.

Salaries and Wages

Salaries and wages expenses decreased noticeably from 275 million USD in 2015 to 137 million USD in 2017, followed by a slight increase to 160 million USD in 2018 and 167 million USD in 2019, reflecting cost-cutting or restructuring in personnel expenses before a moderate recovery.

Workers’ Compensation

Workers' compensation expenses mirrored the trend in salaries and wages, declining from 248 million USD in 2015 to 139 million USD in 2017, then holding relatively stable around 138–148 million USD in subsequent years.

Other Deferred Assets

The 'Other' category within deferred assets decreased steadily from 406 million USD in 2015 to 335 million USD in 2017, before rising slightly to 351 million USD in 2018 and 367 million USD in 2019.

Deferred Assets

Total deferred assets dropped significantly from 2,798 million USD in 2015 to 1,983 million USD in 2017, followed by moderate recovery to 2,520 million USD by 2019.

Valuation Allowances

Valuation allowances improved steadily, moving from a negative 425 million USD in 2015 to a less negative 291 million USD in 2019, indicating a reduction in reserved amounts against deferred tax assets.

Net Deferred Assets

Net deferred assets fluctuated notably, starting at 2,373 million USD in 2015, peaking modestly in 2016 at 2,423 million USD, then falling sharply to 1,581 million USD in 2017 before a gradual recovery to 2,229 million USD in 2019.

Intangible Assets

Intangible assets exhibited significant negative values throughout, ranging from -1,013 million USD in 2015 to -1,070 million USD in 2019, with notable volatility especially in 2018 when the decline deepened to -1,061 million USD, reflecting amortization or impairment impacts.

Lease Liabilities

Lease liabilities appeared only in 2019 with a negative 418 million USD, corresponding to the recognition of lease-related obligations in that year.

Contract Accounting Methods

This item consistently showed negative values, with the lowest point at -532 million USD in 2016, followed by gradual improvement to -375 million USD by 2019, indicating adjustments or changes in contract accounting treatments over time.

Property, Plant, and Equipment

Reported negative throughout the period, property, plant, and equipment values moved from -285 million USD in 2015 to -291 million USD in 2019, with fluctuations in between, suggesting stable but negative net book values or accumulated depreciation effects.

Capital Construction Fund Qualified Ships

Values for qualified ships decreased from -240 million USD in 2015 and 2016 to around -160 million USD in subsequent years, indicating either disposals or adjustments in the fund valuation.

Other Deferred Liabilities

The 'Other' category for deferred liabilities expanded negatively from -203 million USD in 2015 to -359 million USD in 2019, showing increasing deferred liabilities in this segment.

Deferred Liabilities

Total deferred liabilities increased in magnitude from -2,002 million USD in 2015 to -2,677 million USD in 2019, with notable volatility including a peak negative value around 2018 at -2,300 million USD, pointing to growing obligations over the period.

Net Deferred Tax Asset (Liability)

This measure deteriorated sharply, changing from a positive 371 million USD in 2015 to a negative 448 million USD in 2019, with a consistent decline after 2016, reflecting a shift from net asset to net liability position regarding deferred taxes.

Current Deferred Tax Asset

There is a limited data set, with values available only for 2015 and 2016. The asset increased from 3 million US dollars in 2015 to 5 million US dollars in 2016, indicating a moderate growth in recoverable current deferred tax components. No data is available for subsequent years.

Current Deferred Tax Liability

This liability showed a significant increase from 829 million US dollars in 2015 to 1,258 million US dollars in 2016. The absence of data beyond 2016 prevents analysis of further trends, but the increase in this period reflects growing current tax obligations or timing differences.

Noncurrent Deferred Tax Asset

The noncurrent deferred tax asset exhibited a notable decline over the period with available data. It decreased sharply from 1,272 million US dollars in 2015 to 1,362 million US dollars in 2016, followed by a steep drop to 75 million in 2017, continuing downward to 38 million in 2018 and 33 million in 2019. This sustained reduction suggests a diminishing expectation of future tax benefits from noncurrent assets.

Noncurrent Deferred Tax Liability

This liability shows a fluctuating but generally increasing trend. Starting at 75 million US dollars in 2015, it slightly decreased to 72 million in 2016, then sharply increased to 244 million in 2017, peaked at 577 million in 2018, and slightly decreased to 481 million in 2019. Such variation implies changes in long-term tax timing differences, with an overall enhancement in deferred tax liabilities over the observed period.

Current Assets

The reported current assets exhibited a consistent increase over the five-year period, starting at 14,571 million US dollars in 2015 and reaching 19,780 million US dollars in 2019. The adjusted current assets mirrored this trend closely, indicating stable adjustments with minimal deviations, highlighting a steady growth in liquid resources available to cover short-term obligations.

Total Assets

Total assets displayed notable growth, rising from 31,997 million US dollars in 2015 to 48,841 million US dollars in 2019. Adjusted total assets followed a similar upward trajectory, with a slight difference in magnitude, pointing to adjustments primarily made in asset valuation or classification. The significant jump in total assets between 2017 and 2018 suggests possible acquisitions or capital investments during that timeframe.

Current Liabilities

Reported current liabilities increased steadily from 12,445 million US dollars in 2015 to 16,801 million US dollars in 2019. Adjusted current liabilities showed a smaller value in 2015 and 2016 compared to reported figures, before aligning from 2017 onward. This difference in early years may be attributable to reclassification or deferral of certain short-term obligations, but both measures indicate increased short-term financial obligations over time.

Total Liabilities

Total liabilities rose substantially, from 21,259 million US dollars in 2015 to 35,264 million US dollars in 2019 as reported. Adjusted total liabilities demonstrated consistently lower values but identical trends, suggesting adjustments that reduce reported liabilities slightly without altering the overall upward direction. The pronounced increase in liabilities between 2017 and 2018 corresponds with the similar increase in total assets, implying leveraged financing or increased debt.

Shareholders’ Equity

Reported shareholders’ equity experienced a gradual increase from 10,738 million US dollars in 2015 to 13,577 million US dollars in 2019. Adjusted equity was slightly lower than reported initially but surpassed it in later years, rising to 14,025 million US dollars by 2019. The consistent growth in equity illustrates retained earnings and possible issuance of shareholder funds, supporting the company’s expanded asset base.

Net Earnings

Reported net earnings were relatively stable in the range of approximately 2,912 to 3,484 million US dollars over the period, with a slight upward trend. Adjusted net earnings were consistently higher than reported earnings, starting at 3,132 million US dollars in 2015 and increasing to 3,576 million US dollars in 2019. This indicates adjustments that enhance the profitability measure, possibly excluding certain deferred tax effects or one-time items. Overall, profitability remained healthy and showed moderate growth.

Overall Analysis

The data demonstrates a clear expansion in the company's scale, as reflected in the increases in assets, liabilities, and equity. The alignment of reported and adjusted figures indicates limited impact from deferred income tax adjustments on the balance sheet composition, although these adjustments do affect earnings metrics to a greater extent. The rise in liabilities alongside equity growth suggests a balanced approach to funding expansion through both debt and equity. Profitability has maintained a stable, improving pattern, consistent with the growth in equity and asset bases.

Current Ratio Trends

The reported current ratio displays an initial increase from 1.17 in 2015 to a peak of 1.4 in 2017, followed by a decline to 1.18 by 2019. The adjusted current ratio follows a similar pattern, rising from 1.25 in 2015 to 1.4 in 2017 and then decreasing to 1.18 in 2019. This indicates an improvement in short-term liquidity until 2017, after which liquidity conditions slightly deteriorated.

Net Profit Margin Trends

The reported net profit margin remains relatively stable from 2015 to 2017, around 9.4%, then slightly declines to 8.85% by 2019. The adjusted net profit margin shows a higher level overall, peaking at 10.7% in 2017 before decreasing to 9.09% in 2019. The adjustment appears to highlight stronger profitability early on, though the downward trend post-2017 suggests profitability pressures.

Total Asset Turnover Trends

Reported total asset turnover exhibits a steady decrease from 0.98 in 2015 to 0.81 in 2019. The adjusted figures show a similar decline but start slightly higher at 1.02 in 2015, converging with reported ratios by 2019. This indicates diminishing efficiency in asset utilization over the period.

Financial Leverage Trends

The reported financial leverage shows a moderate increase from 2.98 in 2015 to a peak of 3.87 in 2018 before declining to 3.6 in 2019. Adjusted leverage follows a comparable pattern, reaching 3.7 in 2018 then dropping to 3.48 in 2019. These trends suggest growing reliance on debt or liabilities to finance assets, with some easing towards the end of the period.

Return on Equity (ROE) Trends

Reported ROE declines from 27.61% in 2015 to 25.66% in 2019, after a brief increase in 2018. Adjusted ROE starts higher at 30.21% in 2015, peaks in 2016 at 30.45%, and decreases steadily to 25.5% by 2019. Adjusted values reflect stronger equity returns initially, but both measures indicate a downward trend in shareholder profitability over time.

Return on Assets (ROA) Trends

Reported ROA decreases from 9.27% in 2015 to 7.13% in 2019, reflecting declining asset profitability. Adjusted ROA starts higher at 10.19% and follows a similar downward pattern, dropping to 7.33% by 2019. This consistent decline implies reduced effectiveness in generating profits from assets.

Reported and Adjusted Current Assets

The reported current assets show a consistent upward trend from 2015 through 2019, increasing from 14,571 million US dollars to 19,780 million US dollars. This reflects a gradual growth in the company's liquid and short-term assets over the five-year period. The adjusted current assets values closely mirror the reported figures, differing only minimally in 2015 and 2016, suggesting minor adjustments were made but the overall asset growth trend remains unchanged.

Reported and Adjusted Current Liabilities

Current liabilities demonstrate a steady increase over the same period, rising from 12,445 million US dollars in 2015 to 16,801 million US dollars in 2019. The adjusted current liabilities start lower than reported in 2015 and 2016, indicating some reclassification or removal of items, but from 2017 onwards, the adjusted and reported liabilities converge. The increase in liabilities parallels the growth in current assets, signaling an expanding operational scale and possibly higher short-term obligations.

Reported and Adjusted Current Ratio

The reported current ratio fluctuates between 1.17 and 1.4, peaking in 2017 before declining in the subsequent two years to a low of 1.18 in 2019. This indicates a varying degree of liquidity, with the company being most liquid in 2017 and showing a slight decrease in liquidity by 2019. The adjusted current ratio values generally trend higher than reported ratios in 2015 and 2016, consistent with the lower adjusted liabilities in those years, signifying a stronger liquidity position when adjustments are considered. From 2017 onwards, both reported and adjusted ratios align and reflect the same decline pattern, reinforcing the observation of reduced liquidity relative to previous years.

Summary of Financial Position and Liquidity Trends

Overall, the company exhibits growth in both current assets and liabilities, indicating expansion but also increased short-term obligations. The peak in liquidity in 2017, as measured by the current ratio, suggests that year represented a strong liquidity position, while subsequent declines call for attention to short-term financial management. Adjustments for deferred income tax and other factors slightly enhance perceived liquidity in earlier years but do not alter the long-term trends. The alignment of adjusted and reported figures in later years underscores the reliability of the reported data for more recent periods.

Net Earnings Trends

The reported net earnings demonstrated a relatively stable performance from 2015 to 2017, showing a slight decrease from 2965 million US dollars in 2015 to 2912 million US dollars in 2017. This was followed by a notable increase in 2018 and 2019, reaching 3345 million and 3484 million US dollars respectively. Adjusted net earnings, which account for deferred income tax adjustments, showed a more consistent upward trend throughout the period, increasing from 3132 million US dollars in 2015 to 3576 million US dollars in 2019, indicating improvements when non-recurring tax effects are considered.

Net Profit Margin Trends

The reported net profit margin remained stable at approximately 9.42% during 2015 and 2016, with a slight decrease to 9.4% in 2017 and a more pronounced decline to 9.24% and 8.85% in 2018 and 2019 respectively. Conversely, the adjusted net profit margin exhibited a different pattern, peaking at 10.7% in 2017 before decreasing to 9.23% in 2018 and further declining slightly to 9.09% in 2019. This suggests that profitability, after accounting for tax adjustments, was higher in earlier years but converged closer to the reported margin toward the end of the period.

Comparative Analysis of Reported Versus Adjusted Data

Throughout the timeframe, adjusted net earnings consistently exceeded reported net earnings, indicating the positive impact of deferred income tax adjustments on reported profitability. Similarly, adjusted net profit margins were consistently higher than reported margins until 2018, after which both metrics aligned more closely. This convergence may imply a reduction in the effect of deferred tax items on profitability or a change in tax regulation or corporate tax strategies over time.

Overall Insights

The data reflects a company experiencing growth in absolute earnings while facing slight pressure on profitability ratios, particularly in the later years. The adjustment for deferred income taxes improves the earnings visibility and smoothing of profit margins, although recent trends suggest diminishing differences between reported and adjusted results. Such patterns highlight the importance of considering tax adjustments for a comprehensive assessment of financial performance over the examined period.

The data reflects financial trends over a five-year period, highlighting both reported and adjusted figures related to total assets and asset turnover ratios.

Total Assets

The reported total assets show a steady increase from US$31,997 million in 2015 to US$48,841 million in 2019. Similarly, the adjusted total assets follow the same pattern, ranging from US$30,722 million in 2015 to US$48,808 million in 2019. The convergence between reported and adjusted asset values becomes closer over time, particularly from 2017 onwards, indicating the adjustments related to deferred income tax have a diminishing impact on the total assets reported in later years.

Total Asset Turnover Ratios

Reported total asset turnover exhibited a declining trend, decreasing from 0.98 in 2015 to 0.81 in 2019, with the most notable declines occurring between 2015 and 2018. Adjusted total asset turnover ratios also follow a similar decreasing pattern, starting slightly higher than reported values at 1.02 in 2015 and declining to 0.81 in 2019. Both ratios show relative stability between 2018 and 2019 despite the earlier periods' decline, demonstrating a leveling off in asset utilization efficiency.

Insights and Implications

The expanding asset base across the years suggests ongoing investment and asset accumulation. However, the declining asset turnover ratios imply that the efficiency of asset use to generate revenue has weakened over the period, indicating potential challenges in maintaining revenue growth proportional to asset expansion. The close alignment of reported and adjusted figures in recent years implies that deferred income tax adjustments have less impact on asset valuation and utilization metrics in the later periods.

The financial data reveals several noteworthy trends regarding the company’s asset base, equity position, and leverage over the five-year period from 2015 to 2019. Both reported and adjusted values are presented, reflecting the impact of annual reported and deferred income tax adjustments on these financial metrics.

Total Assets

There is a consistent upward trajectory in total assets throughout the period. Reported total assets increased from 31,997 million USD in 2015 to 48,841 million USD in 2019, marking a significant expansion of approximately 52.6%. Adjusted total assets, which account for deferred income tax effects, similarly rose from 30,722 million USD to 48,808 million USD, closely tracking the reported figures but slightly lower in magnitude. This steady growth indicates an expansion in the scale of the company’s asset base.

Shareholders' Equity

Shareholders’ equity also showed an upward trend, reflecting increasing net worth. The reported equity rose from 10,738 million USD in 2015 to 13,577 million USD in 2019, an increase of approximately 26.4%. The adjusted equity values exhibit a parallel trend but with slightly higher figures from 2017 onwards, growing from 10,367 million USD in 2015 to 14,025 million USD in 2019. This suggests that deferred income tax adjustments positively affected the equity base, particularly in later years. The consistent growth in equity highlights strengthened financial resilience and retained earnings or capital infusion over time.

Financial Leverage

Financial leverage ratios, representing the relationship between assets and equity, display increasing leverage over the period with some fluctuations. Reported financial leverage started at 2.98 in 2015, remained relatively stable through 2016 and 2017, then spiked to 3.87 in 2018 before slightly decreasing to 3.6 in 2019. Adjusted financial leverage follows a similar pattern but consistently remains marginally lower, starting at 2.96 in 2015 and peaking at 3.7 in 2018 before easing to 3.48 in 2019. The peak in 2018 suggests increased use of debt or other liabilities relative to equity, which moderated in 2019 but still remained elevated compared to earlier years.

Overall, the company exhibits steady asset growth accompanied by a strengthening equity base. The leverage ratio shows a tendency towards higher leverage, particularly noticeable in 2018, implying increased financial risk or strategic financing choices in that year. The adjustments for deferred income tax generally result in slightly lower asset totals and leverage ratios, with adjusted equity values somewhat higher in later years, reflecting the impact of tax accounting on the reported financial position.

Net Earnings

Reported net earnings demonstrate relative stability from 2015 to 2017, with figures fluctuating slightly between 2,912 million and 2,965 million US dollars. A noticeable increase occurs in 2018, rising to 3,345 million US dollars, and this growth trend continues into 2019, reaching 3,484 million US dollars. Adjusted net earnings follow a somewhat similar pattern, starting higher than reported earnings at 3,132 million in 2015 and increasing steadily to 3,331 million in 2016 and 3,313 million in 2017. The adjusted earnings remain relatively stable into 2018 before increasing again in 2019 to 3,576 million. Overall, adjusted net earnings consistently exceed reported net earnings across all years, indicating positive adjustments likely related to deferred or non-recurring tax effects.

Shareholders' Equity

Reported shareholders' equity shows a steady upward trajectory over the five-year period, starting at 10,738 million US dollars in 2015 and rising to 13,577 million in 2019. The growth is gradual and consistent each year. The adjusted shareholders' equity figures are generally lower than the reported amounts in earlier years, beginning at 10,367 million in 2015, but they surpass reported equity amounts in later years, particularly noticeable in 2019 where adjusted equity reaches 14,025 million compared to the reported 13,577 million. This suggests that adjustments made to shareholders' equity possibly reflect tax-related considerations that have become more significant over time.

Return on Equity (ROE)

The reported ROE starts at a robust level of 27.61% in 2015, slightly decreases to 26.92% in 2016 and further declines to 25.47% in 2017 before rebounding to 28.51% in 2018. In 2019, it decreases again to 25.66%. Meanwhile, adjusted ROE begins at a higher level of 30.21% in 2015 and remains relatively steady through 2016 at 30.45%. The adjusted ROE then declines to 28.55% in 2017 and continues a downward trend through 2018 and 2019, finishing at 25.5%. The trend suggests that adjustments tend to smooth and initially elevate the ROE figures relative to reported data, but this effect diminishes over the analyzed period.

Overall Insights

The analysis reveals that adjusted figures for net earnings, shareholders' equity, and ROE consistently exceed or closely track reported data, indicating that deferred income tax adjustments and related considerations materially affect financial outcomes. Earnings show growth particularly after 2017, while shareholders' equity also increases steadily, reflecting ongoing capital accumulation or retained earnings growth. ROE displays some volatility but remains strong, with adjusted values generally higher in the early years and converging toward reported values by 2019. This convergence may imply changing impacts of tax adjustments over time or evolving company financial structure affecting returns.

Net Earnings

Reported net earnings show a slight decline from 2015 to 2017, decreasing from 2965 million USD to 2912 million USD. Subsequently, there is a noticeable recovery with increases in 2018 and 2019, reaching 3484 million USD. Adjusted net earnings follow a more consistent upward trend, increasing steadily from 3132 million USD in 2015 to 3576 million USD in 2019.

Total Assets

Reported total assets exhibit continuous growth over the period, rising from 31997 million USD in 2015 to 48841 million USD in 2019. Adjusted total assets mirror this trend closely, starting from 30722 million USD in 2015 and increasing to 48808 million USD in 2019, indicating stable asset base expansion.

Return on Assets (ROA)

Reported ROA declines from 9.27% in 2015 to 7.13% in 2019, signaling diminishing efficiency in generating earnings from assets over time. The adjusted ROA initially increases from 10.19% in 2015 to a peak of 10.57% in 2016, then decreases more sharply to 7.33% in 2019. Both reported and adjusted measures converge around 7.3% in 2019, suggesting a reduction in profitability relative to asset size by the end of the period.

Overall Insights

The data reveals sustained asset growth alongside relatively stable adjusted earnings but a declining return on assets ratio. This pattern suggests that while the company has scaled its operations, the efficiency of asset utilization to generate earnings has decreased. The divergence between reported and adjusted figures in earlier years tends to narrow by the end of the period, indicating that adjustments related to income tax may have lessened or become more consistent in recent years.