Stock Analysis on Net
Stock Analysis on Net

General Dynamics Corp. (NYSE:GD)

This company has been moved to the archive! The financial data has not been updated since October 28, 2020.

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

General Dynamics Corp., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
U.S. federal 471 587 656 698 841
State 36 48 31 24 31
International 119 95 77 71 98
Current 626 730 764 793 970
U.S. federal 49 (37) 215 316 116
State 1 8 7 14 5
International 42 26 60 46 46
Adjustment for enacted change in U.S. tax law — — 119 — —
Deferred 92 (3) 401 376 167
Provision for income taxes, net 718 727 1,165 1,169 1,137

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. General Dynamics Corp. current decreased from 2017 to 2018 and from 2018 to 2019.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. General Dynamics Corp. deferred decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.
Provision for income taxes, net Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. General Dynamics Corp. provision for income taxes, net decreased from 2017 to 2018 and from 2018 to 2019.

Effective Income Tax Rate (EITR)

General Dynamics Corp., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Statutory federal income tax rate 21.00% 21.00% 35.00% 35.00% 35.00%
State tax on commercial operations, net of federal benefits 0.70% 1.10% 0.60% 0.60% 0.60%
Impact of international operations 0.20% 0.60% -4.50% -3.80% -1.40%
Domestic production deduction 0.00% 0.00% -1.50% -1.30% -1.60%
Foreign derived intangible income -1.40% -1.20% 0.00% 0.00% 0.00%
Equity-based compensation -1.10% -1.10% -2.60% -2.00% 0.00%
Domestic tax credits -2.00% -1.10% -0.80% -0.80% -1.10%
Contract close-outs 0.00% -0.50% 0.00% 0.00% -2.90%
Other, net -0.30% -1.00% -0.50% -0.10% -0.90%
Effective income tax rate, before adoption impact of enacted change in U.S. tax law 17.10% 17.80% 25.70% 27.60% 27.70%
Adoption impact of enacted change in U.S. tax law 0.00% 0.00% 2.90% 0.00% 0.00%
Effective income tax rate 17.10% 17.80% 28.60% 27.60% 27.70%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Item Description The company
Effective income tax rate, before adoption impact of enacted change in U.S. tax law Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. General Dynamics Corp. effective income tax rate, before adoption impact of enacted change in U.S. tax law decreased from 2017 to 2018 and from 2018 to 2019.

Components of Deferred Tax Assets and Liabilities

General Dynamics Corp., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Retirement benefits 1,097 1,055 935 1,461 1,347
Lease assets 418 — — — —
Tax loss and credit carryforwards 323 393 437 480 522
Salaries and wages 167 160 137 257 275
Workers’ compensation 148 138 139 235 248
Other 367 351 335 396 406
Deferred assets 2,520 2,097 1,983 2,829 2,798
Valuation allowances (291) (336) (402) (406) (425)
Net deferred assets 2,229 1,761 1,581 2,423 2,373
Intangible assets (1,070) (1,061) (688) (1,049) (1,013)
Lease liabilities (418) — — — —
Contract accounting methods (375) (530) (500) (532) (261)
Property, plant and equipment (291) (265) (182) (320) (285)
Capital Construction Fund qualified ships (164) (160) (159) (240) (240)
Other (359) (284) (221) (245) (203)
Deferred liabilities (2,677) (2,300) (1,750) (2,386) (2,002)
Net deferred tax asset (liability) (448) (539) (169) 37 371

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Item Description The company
Deferred assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. General Dynamics Corp. deferred assets increased from 2017 to 2018 and from 2018 to 2019.
Net deferred assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. General Dynamics Corp. net deferred assets increased from 2017 to 2018 and from 2018 to 2019.
Net deferred tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. General Dynamics Corp. net deferred tax asset (liability) decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Deferred Tax Assets and Liabilities, Classification

General Dynamics Corp., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Current deferred tax asset (included in Other current assets) — — — 5 3
Current deferred tax liability — — — 1,258 829
Noncurrent deferred tax asset (included in Other assets) 33 38 75 1,362 1,272
Noncurrent deferred tax liability 481 577 244 72 75

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Item Description The company
Noncurrent deferred tax asset (included in Other assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. General Dynamics Corp. noncurrent deferred tax asset (included in Other assets) decreased from 2017 to 2018 and from 2018 to 2019.
Noncurrent deferred tax liability Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. General Dynamics Corp. noncurrent deferred tax liability increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

Adjustments to Financial Statements: Removal of Deferred Taxes

General Dynamics Corp., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Adjustment to Current Assets
Current assets (as reported) 19,780 18,189 18,328 15,447 14,571
Less: Current deferred tax assets, net — — — 5 3
Current assets (adjusted) 19,780 18,189 18,328 15,442 14,568
Adjustment to Total Assets
Total assets (as reported) 48,841 45,408 35,046 32,872 31,997
Less: Current deferred tax assets, net — — — 5 3
Less: Noncurrent deferred tax assets, net 33 38 75 1,362 1,272
Total assets (adjusted) 48,808 45,370 34,971 31,505 30,722
Adjustment to Current Liabilities
Current liabilities (as reported) 16,801 14,739 13,099 12,846 12,445
Less: Current deferred tax liabilities, net — — — 1,258 829
Current liabilities (adjusted) 16,801 14,739 13,099 11,588 11,616
Adjustment to Total Liabilities
Total liabilities (as reported) 35,264 33,676 23,611 21,896 21,259
Less: Current deferred tax liabilities, net — — — 1,258 829
Less: Noncurrent deferred tax liabilities, net 481 577 244 72 75
Total liabilities (adjusted) 34,783 33,099 23,367 20,566 20,355
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported) 13,577 11,732 11,435 10,976 10,738
Less: Net deferred tax assets (liabilities) (448) (539) (169) 37 371
Shareholders’ equity (adjusted) 14,025 12,271 11,604 10,939 10,367
Adjustment to Net Earnings
Net earnings (as reported) 3,484 3,345 2,912 2,955 2,965
Add: Deferred income tax expense (benefit) 92 (3) 401 376 167
Net earnings (adjusted) 3,576 3,342 3,313 3,331 3,132

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

General Dynamics Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

General Dynamics Corp., adjusted financial ratios

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Current Ratio
Reported current ratio 1.18 1.23 1.40 1.20 1.17
Adjusted current ratio 1.18 1.23 1.40 1.33 1.25
Net Profit Margin
Reported net profit margin 8.85% 9.24% 9.40% 9.42% 9.42%
Adjusted net profit margin 9.09% 9.23% 10.70% 10.62% 9.95%
Total Asset Turnover
Reported total asset turnover 0.81 0.80 0.88 0.95 0.98
Adjusted total asset turnover 0.81 0.80 0.89 1.00 1.02
Financial Leverage
Reported financial leverage 3.60 3.87 3.06 2.99 2.98
Adjusted financial leverage 3.48 3.70 3.01 2.88 2.96
Return on Equity (ROE)
Reported ROE 25.66% 28.51% 25.47% 26.92% 27.61%
Adjusted ROE 25.50% 27.23% 28.55% 30.45% 30.21%
Return on Assets (ROA)
Reported ROA 7.13% 7.37% 8.31% 8.99% 9.27%
Adjusted ROA 7.33% 7.37% 9.47% 10.57% 10.19%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. General Dynamics Corp. adjusted current ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. General Dynamics Corp. adjusted net profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. General Dynamics Corp. adjusted total asset turnover ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 General Dynamics Corp. adjusted financial leverage ratio increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. General Dynamics Corp. adjusted ROE deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. General Dynamics Corp. adjusted ROA deteriorated from 2017 to 2018 and from 2018 to 2019.

General Dynamics Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Current assets 19,780 18,189 18,328 15,447 14,571
Current liabilities 16,801 14,739 13,099 12,846 12,445
Liquidity Ratio
Current ratio1 1.18 1.23 1.40 1.20 1.17
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted current assets 19,780 18,189 18,328 15,442 14,568
Adjusted current liabilities 16,801 14,739 13,099 11,588 11,616
Liquidity Ratio
Adjusted current ratio2 1.18 1.23 1.40 1.33 1.25

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 19,780 ÷ 16,801 = 1.18

2 Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 19,780 ÷ 16,801 = 1.18

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. General Dynamics Corp. adjusted current ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings 3,484 3,345 2,912 2,955 2,965
Revenue 39,350 36,193 30,973 31,353 31,469
Profitability Ratio
Net profit margin1 8.85% 9.24% 9.40% 9.42% 9.42%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 3,576 3,342 3,313 3,331 3,132
Revenue 39,350 36,193 30,973 31,353 31,469
Profitability Ratio
Adjusted net profit margin2 9.09% 9.23% 10.70% 10.62% 9.95%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

1 Net profit margin = 100 × Net earnings ÷ Revenue
= 100 × 3,484 ÷ 39,350 = 8.85%

2 Adjusted net profit margin = 100 × Adjusted net earnings ÷ Revenue
= 100 × 3,576 ÷ 39,350 = 9.09%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. General Dynamics Corp. adjusted net profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Revenue 39,350 36,193 30,973 31,353 31,469
Total assets 48,841 45,408 35,046 32,872 31,997
Activity Ratio
Total asset turnover1 0.81 0.80 0.88 0.95 0.98
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenue 39,350 36,193 30,973 31,353 31,469
Adjusted total assets 48,808 45,370 34,971 31,505 30,722
Activity Ratio
Adjusted total asset turnover2 0.81 0.80 0.89 1.00 1.02

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 39,350 ÷ 48,841 = 0.81

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 39,350 ÷ 48,808 = 0.81

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. General Dynamics Corp. adjusted total asset turnover ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets 48,841 45,408 35,046 32,872 31,997
Shareholders’ equity 13,577 11,732 11,435 10,976 10,738
Solvency Ratio
Financial leverage1 3.60 3.87 3.06 2.99 2.98
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 48,808 45,370 34,971 31,505 30,722
Adjusted shareholders’ equity 14,025 12,271 11,604 10,939 10,367
Solvency Ratio
Adjusted financial leverage2 3.48 3.70 3.01 2.88 2.96

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= 48,841 ÷ 13,577 = 3.60

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 48,808 ÷ 14,025 = 3.48

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 General Dynamics Corp. adjusted financial leverage ratio increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings 3,484 3,345 2,912 2,955 2,965
Shareholders’ equity 13,577 11,732 11,435 10,976 10,738
Profitability Ratio
ROE1 25.66% 28.51% 25.47% 26.92% 27.61%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 3,576 3,342 3,313 3,331 3,132
Adjusted shareholders’ equity 14,025 12,271 11,604 10,939 10,367
Profitability Ratio
Adjusted ROE2 25.50% 27.23% 28.55% 30.45% 30.21%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

1 ROE = 100 × Net earnings ÷ Shareholders’ equity
= 100 × 3,484 ÷ 13,577 = 25.66%

2 Adjusted ROE = 100 × Adjusted net earnings ÷ Adjusted shareholders’ equity
= 100 × 3,576 ÷ 14,025 = 25.50%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. General Dynamics Corp. adjusted ROE deteriorated from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings 3,484 3,345 2,912 2,955 2,965
Total assets 48,841 45,408 35,046 32,872 31,997
Profitability Ratio
ROA1 7.13% 7.37% 8.31% 8.99% 9.27%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 3,576 3,342 3,313 3,331 3,132
Adjusted total assets 48,808 45,370 34,971 31,505 30,722
Profitability Ratio
Adjusted ROA2 7.33% 7.37% 9.47% 10.57% 10.19%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

1 ROA = 100 × Net earnings ÷ Total assets
= 100 × 3,484 ÷ 48,841 = 7.13%

2 Adjusted ROA = 100 × Adjusted net earnings ÷ Adjusted total assets
= 100 × 3,576 ÷ 48,808 = 7.33%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. General Dynamics Corp. adjusted ROA deteriorated from 2017 to 2018 and from 2018 to 2019.