Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
GE Aerospace, solvency ratios (quarterly data)
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
The solvency position, as indicated by the provided ratios, demonstrates a fluctuating pattern over the observed period. Initially, the company exhibited increasing leverage, followed by a period of improvement, and then a renewed increase in leverage towards the end of the analyzed timeframe. The ability to meet interest obligations showed significant improvement before stabilizing and then increasing again.
- Debt to Equity
- The debt to equity ratio generally decreased from 0.86 in March 2022 to a low of 0.69 in March 2024. However, it then increased, reaching 1.11 in September 2025 and remaining at 1.10 in December 2025. This suggests an increasing reliance on equity financing initially, followed by a shift back towards debt financing in more recent quarters.
- Debt to Capital
- The debt to capital ratio remained relatively stable between 0.46 and 0.49 through December 2022. It then decreased to 0.41 by June 2023 and remained at approximately 0.50-0.53 for the remainder of the period. This indicates a consistent, though slightly increasing, proportion of debt within the company’s capital structure.
- Debt to Assets
- The debt to assets ratio exhibited a consistent decline from 0.18 in March 2022 to 0.13 between March 2023 and December 2023. It then increased to 0.16 and remained at that level through December 2025, suggesting a moderate increase in the proportion of assets financed by debt in the latter part of the period.
- Financial Leverage
- Financial leverage increased from 4.92 in March 2022 to a peak of 5.96 in December 2022. It then stabilized around 6.45-6.82 before reaching 6.97 in December 2025. This indicates an increasing degree of financial leverage employed by the company, suggesting a greater reliance on debt to amplify returns, but also increasing financial risk.
- Interest Coverage
- The interest coverage ratio experienced a dramatic improvement, moving from negative values in the first four quarters to 6.73 in March 2023. It continued to increase, peaking at 12.86 in December 2025. This substantial improvement indicates a significantly enhanced ability to cover interest expenses from earnings, suggesting improved profitability and reduced risk of default. The initial negative values suggest the company was not generating sufficient earnings to cover its interest obligations during that period.
Overall, the company demonstrated improved solvency metrics in terms of interest coverage, but experienced a trend of increasing leverage, particularly in the most recent periods. This suggests a potential shift in financial strategy or capital structure, which warrants further investigation.
Debt Ratios
Coverage Ratios
Debt to Equity
GE Aerospace, debt to equity calculation (quarterly data)
| Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Short-term borrowings | 1,686) | 2,067) | 1,889) | 2,084) | 2,039) | 1,681) | 1,700) | 1,032) | 1,253) | 1,334) | 1,882) | 2,262) | 3,757) | 4,285) | 4,947) | 4,985) | |||||
| Long-term borrowings | 18,808) | 18,771) | 16,998) | 17,487) | 17,234) | 18,240) | 17,973) | 19,493) | 19,711) | 19,488) | 19,900) | 20,159) | 28,593) | 26,121) | 27,571) | 28,649) | |||||
| Total debt | 20,494) | 20,838) | 18,887) | 19,571) | 19,273) | 19,921) | 19,673) | 20,525) | 20,964) | 20,822) | 21,782) | 22,421) | 32,350) | 30,406) | 32,518) | 33,634) | |||||
| Shareholders’ equity | 18,677) | 18,812) | 19,135) | 19,251) | 19,342) | 18,874) | 18,598) | 29,855) | 27,378) | 28,665) | 31,194) | 31,652) | 36,366) | 31,475) | 34,649) | 39,005) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to equity1 | 1.10 | 1.11 | 0.99 | 1.02 | 1.00 | 1.06 | 1.06 | 0.69 | 0.77 | 0.73 | 0.70 | 0.71 | 0.89 | 0.97 | 0.94 | 0.86 | |||||
| Benchmarks | |||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||
| Boeing Co. | 9.92 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Caterpillar Inc. | — | 2.01 | 2.18 | 2.14 | 1.97 | 1.95 | 2.18 | 2.15 | 1.94 | 1.81 | 2.07 | 2.04 | 2.33 | 2.34 | 2.35 | 2.20 | |||||
| Eaton Corp. plc | — | 0.57 | 0.59 | 0.54 | 0.50 | 0.49 | 0.51 | 0.48 | 0.49 | 0.50 | 0.52 | 0.50 | 0.51 | 0.56 | 0.59 | 0.58 | |||||
| Honeywell International Inc. | — | 2.21 | 2.27 | 1.88 | 1.67 | 1.77 | 1.65 | 1.53 | 1.29 | 1.18 | 1.24 | 1.13 | 1.17 | 0.96 | 1.09 | 1.05 | |||||
| Lockheed Martin Corp. | 3.23 | 3.59 | 4.06 | 3.04 | 3.20 | 2.68 | 3.12 | 2.92 | 2.55 | 1.88 | 1.90 | 1.62 | 1.68 | 0.96 | 1.02 | 1.16 | |||||
| RTX Corp. | — | 0.61 | 0.67 | 0.67 | 0.69 | 0.69 | 0.71 | 0.71 | 0.73 | 0.51 | 0.49 | 0.47 | 0.44 | 0.48 | 0.45 | 0.43 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q4 2025 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 20,494 ÷ 18,677 = 1.10
2 Click competitor name to see calculations.
The debt to equity ratio exhibits considerable fluctuation over the observed period. Initially, the ratio increased from 0.86 in March 2022 to 0.97 in September 2022, indicating a growing reliance on debt financing relative to equity. A subsequent decrease to 0.89 by December 2022 suggests some mitigation of this trend.
- Initial Decline (2023)
- The first half of 2023 witnessed a significant reduction in the debt to equity ratio, falling from 0.89 to 0.70. This improvement is attributable to a more substantial decrease in total debt compared to the change in shareholders’ equity. The ratio remained relatively stable at 0.70 to 0.73 through the third quarter of 2023.
However, a reversal in this trend began in the fourth quarter of 2023, with the ratio increasing to 0.77 and continuing to rise to 0.86 by March 2024. This increase is driven by a slower rate of debt reduction compared to the decline in shareholders’ equity.
- Significant Equity Reduction (2024)
- A notable shift occurred in the second quarter of 2024, with shareholders’ equity experiencing a substantial decrease, leading to a sharp increase in the debt to equity ratio to 1.06. This ratio remained at 1.06 through the third quarter of 2024. While debt levels also decreased, the reduction in equity was more pronounced, resulting in a higher ratio. The ratio moderated slightly to 1.00 by December 2024.
The ratio continued to fluctuate between 1.02 and 0.99 in the first half of 2025. The final quarters of the observed period show a further increase, reaching 1.11 in September 2025 and remaining at 1.10 by December 2025. This indicates a continued trend of debt financing becoming more prominent relative to equity.
- Overall Trend
- The overall trend demonstrates a cyclical pattern. The ratio initially increased, then decreased significantly in 2023, followed by a period of instability and a subsequent increase in 2024 and 2025. The latter portion of the period is characterized by a debt to equity ratio consistently above 1.0, suggesting a greater proportion of debt financing compared to equity.
The fluctuations in shareholders’ equity appear to be a key driver of the changes in the debt to equity ratio, with significant equity reductions correlating with increases in the ratio.
Debt to Capital
GE Aerospace, debt to capital calculation (quarterly data)
| Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Short-term borrowings | 1,686) | 2,067) | 1,889) | 2,084) | 2,039) | 1,681) | 1,700) | 1,032) | 1,253) | 1,334) | 1,882) | 2,262) | 3,757) | 4,285) | 4,947) | 4,985) | |||||
| Long-term borrowings | 18,808) | 18,771) | 16,998) | 17,487) | 17,234) | 18,240) | 17,973) | 19,493) | 19,711) | 19,488) | 19,900) | 20,159) | 28,593) | 26,121) | 27,571) | 28,649) | |||||
| Total debt | 20,494) | 20,838) | 18,887) | 19,571) | 19,273) | 19,921) | 19,673) | 20,525) | 20,964) | 20,822) | 21,782) | 22,421) | 32,350) | 30,406) | 32,518) | 33,634) | |||||
| Shareholders’ equity | 18,677) | 18,812) | 19,135) | 19,251) | 19,342) | 18,874) | 18,598) | 29,855) | 27,378) | 28,665) | 31,194) | 31,652) | 36,366) | 31,475) | 34,649) | 39,005) | |||||
| Total capital | 39,171) | 39,650) | 38,022) | 38,822) | 38,615) | 38,795) | 38,271) | 50,380) | 48,342) | 49,487) | 52,976) | 54,073) | 68,716) | 61,881) | 67,167) | 72,639) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to capital1 | 0.52 | 0.53 | 0.50 | 0.50 | 0.50 | 0.51 | 0.51 | 0.41 | 0.43 | 0.42 | 0.41 | 0.41 | 0.47 | 0.49 | 0.48 | 0.46 | |||||
| Benchmarks | |||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||
| Boeing Co. | 0.91 | 1.18 | 1.07 | 1.07 | 1.08 | 1.69 | 1.45 | 1.55 | 1.49 | 1.47 | 1.42 | 1.39 | 1.39 | 1.45 | 1.35 | 1.36 | |||||
| Caterpillar Inc. | — | 0.67 | 0.69 | 0.68 | 0.66 | 0.66 | 0.69 | 0.68 | 0.66 | 0.64 | 0.67 | 0.67 | 0.70 | 0.70 | 0.70 | 0.69 | |||||
| Eaton Corp. plc | — | 0.36 | 0.37 | 0.35 | 0.33 | 0.33 | 0.34 | 0.32 | 0.33 | 0.33 | 0.34 | 0.34 | 0.34 | 0.36 | 0.37 | 0.37 | |||||
| Honeywell International Inc. | — | 0.69 | 0.69 | 0.65 | 0.63 | 0.64 | 0.62 | 0.61 | 0.56 | 0.54 | 0.55 | 0.53 | 0.54 | 0.49 | 0.52 | 0.51 | |||||
| Lockheed Martin Corp. | 0.76 | 0.78 | 0.80 | 0.75 | 0.76 | 0.73 | 0.76 | 0.74 | 0.72 | 0.65 | 0.66 | 0.62 | 0.63 | 0.49 | 0.50 | 0.54 | |||||
| RTX Corp. | — | 0.38 | 0.40 | 0.40 | 0.41 | 0.41 | 0.42 | 0.41 | 0.42 | 0.34 | 0.33 | 0.32 | 0.31 | 0.32 | 0.31 | 0.30 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q4 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= 20,494 ÷ 39,171 = 0.52
2 Click competitor name to see calculations.
The debt to capital ratio exhibits a fluctuating pattern over the observed period, spanning from March 31, 2022, to December 31, 2025. Initially, the ratio demonstrates an increasing trend, peaking in June 2022 before experiencing a gradual decline through September 2023. A subsequent increase is then observed, culminating in a peak in September 2025, before a slight decrease at the end of the period.
- Initial Trend (Mar 31, 2022 – Jun 30, 2022)
- The debt to capital ratio increased from 0.46 to 0.48. This suggests a relative increase in debt financing compared to capital during this period. Total debt decreased slightly, while total capital experienced a more substantial reduction.
- Decline (Jul 31, 2022 – Sep 30, 2023)
- From July 2022 through September 2023, the ratio generally decreased, moving from 0.49 to 0.42. This indicates a strengthening of the capital structure, with capital decreasing at a slower rate than debt. Significant reductions in both total debt and total capital were observed during this timeframe.
- Subsequent Increase (Oct 31, 2023 – Sep 30, 2025)
- The ratio began to rise again from October 2023, reaching 0.53 in September 2025. This increase suggests a renewed reliance on debt financing. While total debt increased slightly, the more significant driver was a decrease in total capital.
- Final Period (Oct 31, 2025 – Dec 31, 2025)
- The ratio experienced a minor decrease in the final quarter, settling at 0.52. This suggests a slight improvement in the capital structure, though the overall leverage remains elevated compared to earlier periods in the observed timeframe.
Overall, the observed fluctuations in the debt to capital ratio suggest dynamic shifts in the company’s financing strategy and capital structure. The period demonstrates a cyclical pattern of increasing and decreasing leverage, with a general trend towards higher leverage by the end of the analyzed period.
Debt to Assets
GE Aerospace, debt to assets calculation (quarterly data)
| Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Short-term borrowings | 1,686) | 2,067) | 1,889) | 2,084) | 2,039) | 1,681) | 1,700) | 1,032) | 1,253) | 1,334) | 1,882) | 2,262) | 3,757) | 4,285) | 4,947) | 4,985) | |||||
| Long-term borrowings | 18,808) | 18,771) | 16,998) | 17,487) | 17,234) | 18,240) | 17,973) | 19,493) | 19,711) | 19,488) | 19,900) | 20,159) | 28,593) | 26,121) | 27,571) | 28,649) | |||||
| Total debt | 20,494) | 20,838) | 18,887) | 19,571) | 19,273) | 19,921) | 19,673) | 20,525) | 20,964) | 20,822) | 21,782) | 22,421) | 32,350) | 30,406) | 32,518) | 33,634) | |||||
| Total assets | 130,169) | 128,243) | 125,256) | 124,123) | 123,140) | 126,698) | 123,190) | 163,942) | 163,045) | 156,662) | 163,006) | 164,472) | 187,788) | 180,877) | 185,540) | 191,961) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to assets1 | 0.16 | 0.16 | 0.15 | 0.16 | 0.16 | 0.16 | 0.16 | 0.13 | 0.13 | 0.13 | 0.13 | 0.14 | 0.17 | 0.17 | 0.18 | 0.18 | |||||
| Benchmarks | |||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||
| Boeing Co. | 0.32 | 0.36 | 0.34 | 0.34 | 0.34 | 0.42 | 0.41 | 0.36 | 0.38 | 0.39 | 0.39 | 0.41 | 0.42 | 0.42 | 0.42 | 0.43 | |||||
| Caterpillar Inc. | — | 0.44 | 0.45 | 0.45 | 0.44 | 0.44 | 0.45 | 0.45 | 0.43 | 0.43 | 0.44 | 0.44 | 0.45 | 0.45 | 0.46 | 0.46 | |||||
| Eaton Corp. plc | — | 0.26 | 0.27 | 0.26 | 0.24 | 0.24 | 0.25 | 0.24 | 0.24 | 0.25 | 0.25 | 0.25 | 0.25 | 0.26 | 0.28 | 0.27 | |||||
| Honeywell International Inc. | — | 0.46 | 0.47 | 0.44 | 0.41 | 0.42 | 0.40 | 0.38 | 0.33 | 0.33 | 0.34 | 0.32 | 0.31 | 0.28 | 0.31 | 0.31 | |||||
| Lockheed Martin Corp. | 0.36 | 0.37 | 0.37 | 0.36 | 0.36 | 0.35 | 0.35 | 0.35 | 0.33 | 0.31 | 0.31 | 0.29 | 0.29 | 0.22 | 0.22 | 0.23 | |||||
| RTX Corp. | — | 0.23 | 0.25 | 0.25 | 0.25 | 0.26 | 0.26 | 0.27 | 0.27 | 0.22 | 0.22 | 0.21 | 0.20 | 0.21 | 0.20 | 0.20 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q4 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= 20,494 ÷ 130,169 = 0.16
2 Click competitor name to see calculations.
The debt-to-assets ratio demonstrates a generally decreasing trend over the observed period, followed by a period of stabilization and a slight increase towards the end of the timeframe. Initially, the ratio remained consistent at 0.18 for the first two quarters, then gradually declined to 0.13 by the end of 2023. This indicates a strengthening of the company’s financial position as the proportion of assets financed by debt decreased. The ratio then stabilized around 0.16 for the final four quarters, suggesting a pause in the deleveraging trend and a potential shift towards maintaining the current capital structure.
- Overall Trend
- From March 2022 to December 2023, a clear downward trend in the debt-to-assets ratio is evident. This suggests a reduction in financial leverage, potentially through debt repayment or asset growth exceeding debt accumulation. However, this trend appears to have paused, with the ratio remaining relatively stable between March 2024 and December 2025.
- Magnitude of Change
- The most significant decrease in the ratio occurred between June 2022 and December 2023, representing a reduction of 0.05. The subsequent stabilization indicates that the company has maintained a similar level of debt relative to its assets during the latter part of the period. The slight increase in the final quarters suggests a potential reintroduction of debt or slower asset growth.
- Recent Performance
- The ratio’s consistency at approximately 0.16 in the most recent quarters suggests a deliberate effort to maintain a specific capital structure. While the initial decline indicated a focus on deleveraging, the current stability may reflect a strategic decision to balance debt and equity financing. The final value of 0.16 in December 2025 is slightly higher than the low of 0.13 observed in late 2023, warranting further investigation into the drivers of this change.
In summary, the debt-to-assets ratio indicates an initial period of successful deleveraging, followed by a stabilization of the company’s financial leverage. The recent slight increase suggests a potential shift in financial strategy or a change in the balance between debt and asset growth.
Financial Leverage
GE Aerospace, financial leverage calculation (quarterly data)
| Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Total assets | 130,169) | 128,243) | 125,256) | 124,123) | 123,140) | 126,698) | 123,190) | 163,942) | 163,045) | 156,662) | 163,006) | 164,472) | 187,788) | 180,877) | 185,540) | 191,961) | |||||
| Shareholders’ equity | 18,677) | 18,812) | 19,135) | 19,251) | 19,342) | 18,874) | 18,598) | 29,855) | 27,378) | 28,665) | 31,194) | 31,652) | 36,366) | 31,475) | 34,649) | 39,005) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Financial leverage1 | 6.97 | 6.82 | 6.55 | 6.45 | 6.37 | 6.71 | 6.62 | 5.49 | 5.96 | 5.47 | 5.23 | 5.20 | 5.16 | 5.75 | 5.35 | 4.92 | |||||
| Benchmarks | |||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||
| Boeing Co. | 30.85 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Caterpillar Inc. | — | 4.54 | 4.84 | 4.70 | 4.50 | 4.45 | 4.86 | 4.75 | 4.49 | 4.24 | 4.68 | 4.61 | 5.16 | 5.19 | 5.16 | 4.82 | |||||
| Eaton Corp. plc | — | 2.16 | 2.18 | 2.12 | 2.08 | 2.05 | 2.05 | 2.00 | 2.02 | 2.03 | 2.05 | 2.04 | 2.06 | 2.14 | 2.15 | 2.12 | |||||
| Honeywell International Inc. | — | 4.82 | 4.87 | 4.31 | 4.04 | 4.22 | 4.09 | 3.99 | 3.88 | 3.56 | 3.60 | 3.54 | 3.73 | 3.40 | 3.55 | 3.45 | |||||
| Lockheed Martin Corp. | 8.90 | 9.75 | 11.04 | 8.48 | 8.78 | 7.71 | 8.92 | 8.27 | 7.67 | 6.11 | 6.17 | 5.66 | 5.71 | 4.35 | 4.53 | 5.15 | |||||
| RTX Corp. | — | 2.61 | 2.68 | 2.68 | 2.71 | 2.70 | 2.73 | 2.65 | 2.71 | 2.33 | 2.24 | 2.22 | 2.19 | 2.25 | 2.26 | 2.20 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q4 2025 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 130,169 ÷ 18,677 = 6.97
2 Click competitor name to see calculations.
The financial leverage ratio for the analyzed period demonstrates a generally increasing trend, indicating a growing reliance on debt financing relative to equity. Initial values suggest a moderately leveraged position, which becomes more pronounced over time.
- Overall Trend
- From March 31, 2022, through December 31, 2025, the financial leverage ratio generally increased. It began at 4.92 and rose to 6.97, representing a significant increase in financial leverage over the observed timeframe. There are some fluctuations within this overall upward trend.
- Initial Period (Mar 31, 2022 – Dec 31, 2022)
- The ratio experienced an initial increase from 4.92 to 5.35, then to 5.75 before decreasing slightly to 5.16 by the end of 2022. This suggests a period of increasing, then moderating, leverage.
- 2023 Performance
- Throughout 2023, the ratio continued to climb, starting at 5.20 and reaching 5.96 by year-end. This indicates a consistent increase in the proportion of debt used to finance assets during this period.
- 2024 and 2025
- The most substantial increases occurred in 2024, peaking at 6.71 in June, and continued into 2025, reaching 6.97 by December 31, 2025. This represents the highest level of financial leverage observed within the analyzed period. The ratio remained relatively stable between 6.82 and 6.97 during the final three quarters of 2025.
- Asset and Equity Considerations
- Total assets decreased from US$191,961 million in March 2022 to US$130,169 million in December 2025. Simultaneously, shareholders’ equity also decreased, from US$39,005 million to US$18,677 million. The combined effect of decreasing assets and equity, while the leverage ratio increased, suggests that debt financing has become a more significant component of the capital structure.
The observed trend in financial leverage warrants further investigation to assess the associated risks and benefits, particularly in relation to the company’s ability to meet its debt obligations and maintain financial stability.
Interest Coverage
GE Aerospace, interest coverage calculation (quarterly data)
| Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Net income (loss) attributable to the Company | 2,541) | 2,157) | 2,028) | 1,978) | 1,899) | 1,852) | 1,266) | 1,539) | 1,592) | 348) | 35) | 7,506) | 2,222) | (165) | (790) | (1,042) | |||||
| Add: Net income attributable to noncontrolling interest | 10) | (3) | (7) | (6) | (8) | (10) | 2) | 26) | (1) | (13) | 4) | (28) | 15) | 5) | 19) | 28) | |||||
| Less: Net income (loss) from discontinued operations, net of taxes | 89) | (17) | 21) | 10) | (5) | 147) | (54) | (179) | 2) | 174) | (1,019) | 1,257) | (65) | (84) | (210) | (285) | |||||
| Add: Income tax expense | 389) | 344) | 389) | 283) | 397) | 198) | 125) | 243) | 420) | 139) | 332) | 271) | (66) | 21) | 317) | 204) | |||||
| Add: Interest and other financial charges | 250) | 225) | 158) | 210) | 224) | 251) | 248) | 263) | 296) | 286) | 267) | 269) | 417) | 390) | 394) | 406) | |||||
| Earnings before interest and tax (EBIT) | 3,101) | 2,740) | 2,547) | 2,455) | 2,517) | 2,144) | 1,695) | 2,250) | 2,305) | 586) | 1,657) | 6,761) | 2,653) | 335) | 150) | (119) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Interest coverage1 | 12.86 | 12.56 | 11.46 | 9.44 | 8.73 | 7.93 | 6.25 | 6.11 | 10.12 | 9.41 | 8.49 | 6.73 | 1.88 | -1.66 | -1.16 | -1.49 | |||||
| Benchmarks | |||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||
| Boeing Co. | 1.95 | -2.41 | -2.72 | -3.10 | -3.48 | -2.16 | -0.23 | 0.21 | 0.18 | -0.06 | -0.85 | -0.53 | -0.98 | -2.54 | -1.40 | -1.31 | |||||
| Caterpillar Inc. | — | 25.46 | 25.81 | 26.67 | 27.21 | 26.28 | 26.88 | 27.68 | 26.66 | 24.81 | 23.80 | 21.33 | 20.80 | 22.05 | 20.08 | 19.10 | |||||
| Eaton Corp. plc | — | 23.55 | 28.05 | 36.65 | 36.12 | 40.37 | 37.97 | 32.04 | 26.34 | 22.25 | 19.68 | 19.85 | 21.22 | 21.33 | 24.31 | 22.57 | |||||
| Honeywell International Inc. | — | 6.96 | 6.92 | 7.43 | 7.82 | 8.40 | 9.33 | 9.89 | 10.36 | 10.68 | 12.45 | 14.34 | 16.41 | 20.95 | 20.60 | 21.35 | |||||
| Lockheed Martin Corp. | 6.30 | 5.50 | 5.60 | 7.12 | 7.00 | 8.65 | 8.83 | 9.19 | 9.84 | 10.42 | 11.74 | 10.58 | 11.72 | 13.31 | 10.88 | 14.12 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q4 2025 Calculation
Interest coverage
= (EBITQ4 2025
+ EBITQ3 2025
+ EBITQ2 2025
+ EBITQ1 2025)
÷ (Interest expenseQ4 2025
+ Interest expenseQ3 2025
+ Interest expenseQ2 2025
+ Interest expenseQ1 2025)
= (3,101 + 2,740 + 2,547 + 2,455)
÷ (250 + 225 + 158 + 210)
= 12.86
2 Click competitor name to see calculations.
The interest coverage ratio exhibits a significant improvement over the observed period, transitioning from negative values to a consistently strong position. Initial periods demonstrate an inability to cover interest obligations from earnings before interest and tax, followed by a substantial and sustained increase in coverage.
- Initial Period (Mar 31, 2022 – Dec 31, 2022)
- The interest coverage ratio begins with negative values, reaching -1.49 in March 2022, -1.16 in June 2022, and -1.66 in September 2022. This indicates that earnings before interest and tax were insufficient to cover interest expenses during these quarters. A positive shift occurs in December 2022, with the ratio reaching 1.88, signifying the company’s ability to cover its interest obligations.
- Improvement and Stabilization (Mar 31, 2023 – Dec 31, 2023)
- From March 2023 through December 2023, the interest coverage ratio demonstrates a strong upward trend, increasing from 6.73 to 10.12. This suggests a considerable improvement in profitability relative to interest expenses. The ratio remains above 6.0 throughout this period, indicating a comfortable margin of safety.
- Continued Strength and Moderate Fluctuations (Mar 31, 2024 – Dec 31, 2025)
- The ratio experiences moderate fluctuations while remaining consistently positive and above 6.0. It decreases slightly to 6.11 in March 2024, then increases to 8.73 by December 2024. This trend continues into 2025, peaking at 12.86 in December 2025. The fluctuations suggest some variability in earnings relative to interest expenses, but the overall trend remains positive and indicates a strong ability to meet interest obligations.
Overall, the progression of the interest coverage ratio demonstrates a substantial improvement in the company’s solvency position. The transition from negative coverage to consistently strong coverage suggests improved profitability and/or reduced interest expenses. The sustained high ratios in the later periods indicate a robust capacity to service its debt.