GE Aerospace (NYSE:GE)

An analysis of the financial leverage indicators reveals several notable trends over the observed periods. The Debt to Equity ratio shows a significant decline from 2.12 to 0.87 between March 2021 and December 2021, indicating a reduction in reliance on debt relative to shareholders' equity. From early 2022 to early 2023, this ratio remains relatively stable around 0.7 to 0.8, followed by a gradual increase towards 1.11 by September 2025, suggesting a slight increase in leverage in the latter periods.

The Debt to Capital ratio mirrors this pattern, decreasing from 0.68 to 0.47 in 2021, then stabilizing around 0.41 to 0.43 in 2022 and early 2023. Subsequently, it rises to approximately 0.53 by late 2025. This indicates that while the company initially lowered its debt proportion within its capital structure, it has slowly increased this proportion in more recent quarters.

Similarly, the Debt to Assets ratio falls from 0.29 to 0.18 throughout 2021, maintaining near 0.13–0.14 levels in 2022 and early 2023, and then slightly increasing to around 0.16 by the present. This trend suggests a consistent reduction in debt related to total assets initially, followed by a modest rebound towards the end of the timeline.

Financial Leverage, defined as the ratio of total assets to equity, decreased sharply from 7.3 to 4.93 by the end of 2021, reflecting a deleveraging process or growth of equity. Post-2021, financial leverage exhibits an upward trend, reaching a peak of 6.82 by September 2025. This increase may point to a return to higher borrowing or relative equity changes.

The Interest Coverage ratio shows pronounced volatility and a significant improvement over time. Beginning below 1 in early 2021 and even showing negative values in the latter half of 2021 and early 2022, this metric then improves markedly from mid-2022 onward. By December 2023, the ratio surpasses 10, indicating a strong ability to cover interest expenses. The ratio continues to rise, reaching 12.56 by September 2025, which implies enhanced operational earnings or reduced interest burdens enabling better coverage of interest obligations.

Summary of leverage trends:

Initial deleveraging is evident from 2021 to early 2022, with reductions in all debt-related ratios.

A stabilization phase follows with low leverage levels during 2022 to early 2023.

Since early 2023, there is a gradual increase in leverage metrics, indicating moderate re-leveraging.

Financial leverage follows a similar pattern, decreasing first, then increasing from mid-2023 onward.

Analysis of interest coverage:

The interest coverage ratio improves significantly post-early 2022, moving from negative or low values to strong positive ratios above 10.

This improvement signals enhanced profitability or reduced financing costs, improving the company’s ability to meet interest payments.

The steady upward trend in interest coverage through 2024 and 2025 suggests strengthening financial health in terms of earnings relative to interest expense.

Total Debt

The total debt exhibited a general decreasing trend from March 2021 to December 2024, falling from approximately 71.4 billion USD to around 19.3 billion USD. However, some fluctuations are noticeable within this period, including a significant reduction between September 2021 (62.9 billion USD) and December 2021 (35.2 billion USD). From this point onwards, total debt remained relatively stable with slight decreases and fluctuations, such as a small rise at the end of 2022 followed by a gradual downward movement. In the period of 2025, total debt increased modestly, ending at about 20.8 billion USD by September 2025.

Shareholders’ Equity

Shareholders’ equity initially increased steadily, rising from approximately 33.6 billion USD in March 2021 to a peak of roughly 40.3 billion USD by December 2021. After this peak, equity values decreased substantially during 2022, reaching a low of around 18.6 billion USD by June 2024. In the subsequent quarters up to September 2025, shareholders' equity stabilized and showed minor fluctuations, ending slightly below 19 billion USD.

Debt to Equity Ratio

The debt to equity ratio decreased significantly from 2.12 in March 2021 to below 1 (about 0.87) by December 2021, reflecting a marked improvement in the capital structure as total debt reduced and equity increased. This improvement was sustained throughout 2022 and into early 2023, with the ratio fluctuating slightly but remaining below 1, indicating a stronger equity base relative to debt. However, starting mid-2024, the ratio rose above 1 again, peaking around 1.11 by September 2025, signaling a moderate return to higher leverage levels relative to shareholders’ equity.

Overall Analysis

There was a notable deleveraging trend through 2021 accompanied by increasing equity, significantly improving the debt to equity ratio and suggesting efforts to strengthen the financial position. However, after peaking equity in late 2021 and early 2022, the equity declined sharply, and total debt stabilized at a lower level, which combined to push the leverage ratio back above 1 starting mid-2024. The recent increase in debt relative to equity could indicate shifting capital structure strategies or external financing needs. The overall financial trend reflects an initial phase of balance sheet strengthening followed by stabilization with moderate leverage increase towards the latter periods observed.

The financial data for GE Aerospace over the observed quarters displays notable shifts in its capital structure, particularly in total debt levels, total capital, and the resulting debt-to-capital ratio.

Total Debt

Total debt exhibited a significant reduction from March 2021 through March 2023, declining from approximately $71.36 billion to about $22.42 billion. This downward trend indicates a substantial deleveraging effort during this period. However, post-March 2023, total debt fluctuated gently with small increases and decreases, maintaining a level around $19.3 billion to $20.8 billion towards the end of the series in September 2025.

Total Capital

Total capital followed a somewhat similar declining trend, decreasing markedly from roughly $104.94 billion in March 2021 to about $48.3 billion by December 2023. After this phase, there was a brief period of volatility, with capital dipping to around $38.3 billion in mid-2024, then modestly recovering towards approximately $39.7 billion by September 2025. This suggests underlying fluctuations in either equity, debt, or other capital sources during this period.

Debt to Capital Ratio

The debt-to-capital ratio mirrored the trends in debt and capital values closely. Initially, the ratio decreased from 0.68 in March 2021 to a low of approximately 0.41 by March 2023, reflecting a stronger equity position relative to debt or reduced leverage. Nonetheless, starting from mid-2023, this ratio began to rise again, moving back to around 0.53 by September 2025. This increase implies a relative growth in leverage compared to total capital during the more recent periods.

In summary, the data reveals a clear deleveraging phase through early 2023 where debt and debt ratios fell significantly, coupled with declining total capital. Subsequently, the company’s financial posture shows signs of stabilization mixed with moderate increases in leverage ratios. These trends may reflect strategic adjustments in capital structure, possibly driven by operational requirements or market conditions affecting capital procurement and debt management.

The financial data indicates a clear trend of declining total debt from the first quarter of 2021 through to the third quarter of 2025. Initially, total debt decreases sharply from $71,358 million in March 2021 to $20,838 million in September 2025, reflecting a significant reduction in leverage over this period. There is a slight fluctuation in the later quarters, but overall, the trend remains downward, suggesting a strategic emphasis on debt reduction or deleveraging.

Total assets exhibit a contrasting trajectory. The asset base declines notably from $245,164 million in March 2021 to $128,243 million in September 2025. A particularly sharp drop is observed around mid-2024, indicating possible asset sales, write-downs, or restructuring activities. This reduction in assets alongside decreasing debt affects the company's financial structure and capital employed.

The debt to assets ratio decreases from 0.29 in March 2021 to approximately 0.13 by December 2023, showing a significant improvement in the company’s leverage position. However, starting in early 2024, the ratio increases slightly, stabilizing around 0.15-0.16 through to September 2025. This suggests that while leverage improved markedly in the initial periods, there is a marginal uptick or stabilization in leverage more recently, potentially due to the relative change rates between debt and asset values.

Total Debt

Shows a steady and substantial decline over the analyzed periods, indicating a focused effort on reducing financial obligations.

Total Assets

Declines steadily with a notable drop in mid-2024, which could imply major asset disposals or impairment events, reflecting a shrinking asset base.

Debt to Assets Ratio

Improves significantly from 0.29 to 0.13 until the end of 2023, showing reduced financial leverage. A slight increase thereafter to around 0.15-0.16 suggests some stabilization or modest increase in leverage relative to assets.

Overall, the trends highlight a company aggressively managing its debt levels while experiencing a contraction in total assets. The initial improvement in leverage ratios indicates enhanced financial stability, although the late-period ratio uptick suggests a cautious approach may be warranted going forward. These patterns might reflect strategic adjustments in capital structure, asset management, or operational restructuring over the analyzed time frame.

The analysis of the quarterly financial data reveals several noteworthy trends in the company’s financial position over the observed periods.

Total Assets

Total assets show a general decline from March 31, 2021, to March 31, 2023, decreasing from approximately $245 billion to around $164 billion. This downward trend continues with fluctuations through to September 30, 2025, where total assets stand at about $128 billion. The most significant drop occurs between December 31, 2023, and June 30, 2024, reflecting a sharp reduction from around $164 billion to $123 billion. This overall decline suggests a contraction in asset base over the period.

Shareholders’ Equity

Shareholders’ equity initially increases modestly from March 31, 2021, at roughly $33.6 billion to a peak of $40.3 billion by December 31, 2021. After this peak, equity fluctuates downward, showing a significant decrease to approximately $18.6 billion by June 30, 2024. From this low, equity maintains a relatively stable but low range, ending near $18.8 billion by September 30, 2025. This indicates an erosion of equity, particularly pronounced post-2022, which may imply sustained losses or dividends exceeding earnings during this timeframe.

Financial Leverage

The financial leverage ratio decreases markedly from 7.3 at the end of Q1 2021 to a low of 4.93 by the end of Q4 2021, indicating a reduction in debt relative to equity. However, starting in early 2022, this ratio trends upward again, climbing steadily to a peak of 6.82 by September 30, 2025. This resurgence suggests increased reliance on debt financing or a deterioration in equity relative to liabilities, consistent with the observed declines in shareholders’ equity and total assets.

In summary, the company experienced a contraction in its asset base and equity over the analyzed period, with a sharp equity reduction during mid-2024. The financial leverage ratio’s initial decline followed by a steady rise suggests shifting capital structure dynamics, with growing financial risk as debt becomes a larger component of the overall capitalization. These patterns highlight potential challenges in maintaining asset levels and preserving shareholder value, which may warrant further investigation into operational performance and financing strategies.

The analysis of the quarterly financial performance reveals significant fluctuations in earnings before interest and tax (EBIT), interest charges, and interest coverage ratios over the observed period. These metrics indicate varying operational profitability and financial risk throughout the timeline.

Earnings Before Interest and Tax (EBIT)

EBIT values exhibit pronounced volatility in the earlier periods, including substantial negative earnings in certain quarters, notably in December 2021 with a significant loss. From the start of 2023 onward, there is a consistent upward trend in EBIT figures, reaching progressively higher positive values and demonstrating marked operational improvement. This indicates a recovery phase followed by sustained growth in operating profitability.

Interest and Other Financial Charges

Interest expenses remain relatively stable throughout the period, with minor fluctuations. There is a slight downward trend in interest charges over time, reflecting potentially reduced borrowing costs or lower debt levels. The charges peak slightly in the initial quarters but decline gradually toward the later dates, indicating improved financial management or favorable financing conditions.

Interest Coverage Ratio

The interest coverage ratio, representing the ability to meet interest obligations, starts off at low or negative values in some early quarters, correlating with negative EBIT and indicating financial stress. A notable improvement occurs starting early 2023, with the ratio rising to significantly high values, reflecting enhanced earnings power relative to interest expenses. This uptrend continues steadily through subsequent periods, suggesting strengthened financial health and reduced risk of default on interest payments.

Overall, the operational earnings exhibited volatility early in the analyzed timeline but show a clear recovery and consistent growth trend in recent years. Interest expenses have been moderately declining, supporting the improving interest coverage ratios. The enhanced coverage ratio signals a strengthened capacity to fulfill debt-related obligations, demonstrating improved financial stability and operational resilience.