GE Aerospace (NYSE:GE)

The financial data reveals several noteworthy trends in the company's leverage and ability to cover interest expenses over the analyzed periods.

Debt to Equity Ratio

The debt to equity ratio exhibits a significant decline from above 2.4 in early 2020 to below 1.0 by the end of 2021, indicating a deleveraging trend during this period. From 2022 onwards, it remains relatively stable around 0.7 to 1.0, with minor fluctuations. However, an uptick to around 1.06 is observed in mid-2024, which slightly reverses in subsequent quarters.

Debt to Capital Ratio

This ratio decreases steadily from approximately 0.71 in Q1 2020 to about 0.41 in early 2023, which corroborates the reduction in leverage observed in the debt to equity ratio. Subsequently, the ratio stabilizes near 0.5 during 2024, suggesting a moderate increase or stabilization in debt levels relative to the company's capital base.

Debt to Assets Ratio

Debt to assets follows a similar downward trend, dropping from roughly 0.32 in early 2020 to about 0.13 by late 2023. This ratio stabilizes around 0.16 in 2024, reflecting a consistent proportion of assets financed through debt towards the later periods with a slight increase compared to the lowest points.

Financial Leverage

The financial leverage ratio declines markedly from over 7.4 in early 2020 to below 5.0 by the end of 2021, indicating a reduction in reliance on debt financing. However, from 2022 through 2024, the ratio trends upward again, reaching above 6.6 at some points in 2024, suggesting an increased use of debt or changes in equity levels during this time.

Interest Coverage Ratio

Data on interest coverage begins in late 2020, showing a volatile and initially weak ability to cover interest expenses with operating earnings. Negative coverage ratios observed in late 2021 suggest periods of earnings insufficient to cover interest obligations. Thereafter, the interest coverage ratio improves substantially, peaking at values above 9.0 by late 2023 and into 2024. This positive progression indicates strengthening earnings relative to interest expenses and improved financial health in servicing debt.

In summary, the company underwent a phase of significant deleveraging from 2020 through 2021, reducing its debt relative to equity, capital, and assets. This was accompanied by an initial struggle in covering interest expenses, with some quarters showing negative coverage. From 2022 onward, while leverage ratios stabilize or increase moderately, the company's capacity to meet interest payments improves markedly, reflecting enhanced operational performance or successful debt management strategies. The slight rise in leverage ratios in 2024 warrants monitoring but does not yet correspond with deteriorating interest coverage, which remains strong.

The analysis of the financial data over the reported periods reveals several noteworthy trends in debt management and shareholders’ equity for the company.

Total Debt

Total debt showed a consistent decreasing trend from March 31, 2020, when it stood at 85,154 million USD, down to 20,964 million USD by December 31, 2023. This represents a significant reduction in outstanding debt over nearly four years. However, following this period, the debt level stabilized with minor fluctuations around the 19,000 to 20,000 million USD range through to March 31, 2025.

Shareholders’ Equity

Shareholders’ equity exhibited more volatility. Initially, equity decreased from 35,284 million USD in March 2020 to 31,475 million USD by September 2022. Subsequently, equity recovered, peaking at 36,366 million USD in December 2022 before declining again to levels between approximately 19,000 and 29,000 million USD from March 2023 onward. Notably, equity was at its lowest recorded value near 18,598 million USD in June 2024, indicating some challenges in maintaining equity levels consistently.

Debt to Equity Ratio

The debt to equity ratio reflects the combined movements of debt and equity. Initially, the ratio was relatively high at approximately 2.4 in early 2020, reflecting a high level of leverage. Over time, this ratio steadily decreased, reaching a low of around 0.7 by mid-2023, indicating a marked reduction in leverage and a stronger equity base relative to debt.

Post mid-2023, the ratio increased again to slightly above 1.0 by mid-2024 and maintained near this level through to March 2025. The increase shows a relative rise in debt compared to equity, mainly driven by the pronounced drop in equity in this period coupled with a stabilization of debt levels. Yet, the leverage remains significantly lower than the initial figures from 2020, suggesting improved financial stability despite more recent fluctuations.

Overall, the company's financial leverage has been reduced considerably since 2020, reflecting an effort to deleverage and strengthen the balance sheet. However, the variability in shareholders’ equity in recent periods suggests some underlying volatility that could merit further investigation to understand the drivers of these changes. The debt stabilization after 2023 combined with declining equity points to a more cautious financial posture but also potential challenges in equity growth going forward.

The financial data reflects several notable trends in the company's capital structure and leverage over the analyzed periods from March 31, 2020, through March 31, 2025.

Total Debt (US$ in millions)

Total debt shows a clear downward trend over the timeline. Starting at 85,154 million in March 2020, it consistently declines with minor fluctuations, reaching a low point around 20,000 million by March 2025. The most significant reductions occurred between December 2020 and December 2021, dropping from 75,066 million to 35,185 million, indicating a substantial deleveraging effort during that period. From 2022 onwards, the total debt continues to decrease gradually but remains relatively stable in the range of approximately 19,000 to 21,000 million in the final quarters.

Total Capital (US$ in millions)

Total capital also trends downward overall but shows greater volatility than total debt. Beginning at 120,438 million in March 2020, it decreases steadily through December 2022, reaching a trough at 61,881 million. Afterwards, there is partial recovery with fluctuating increases and declines, ending at 38,822 million in March 2025. The data indicate a significant contraction in total capital, especially between mid-2020 and late-2022. The fluctuations towards the end may reflect new capital raising activities, asset sales, or balance sheet adjustments.

Debt to Capital Ratio

This ratio demonstrates a meaningful reduction in leverage from March 2020 through December 2021, falling from approximately 0.71 to 0.47. Such a decrease reflects the combined effect of declining debt and changing total capital. Between 2022 and early 2024, the ratio stabilizes around 0.41 to 0.43, indicating a relatively lower leverage level sustained for this period. However, late 2024 sees an uptick back to approximately 0.5, suggesting an increase in leverage, potentially due to either rising debt or shrinking capital base during that time frame.

In summary, the data reveal a strategic deleveraging phase that significantly reduced total debt and improved leverage ratios through late 2021. While total capital contracted sharply, the company managed to maintain a lower debt-to-capital ratio in subsequent years, signaling a stronger balance sheet position. The slight increase in leverage ratio near the end of the period may warrant further monitoring to understand the underlying factors and implications for financial stability.

The financial data exhibits several notable trends regarding total debt, total assets, and the debt-to-assets ratio over the examined periods.

Total Debt

Total debt demonstrates an overall declining trend from March 31, 2020, through the latter periods. Starting at approximately $85,154 million, the debt decreases steadily to about $35,185 million by December 31, 2021. This decline continues, albeit at a slower pace, reaching around $19,571 million by March 31, 2025. The most significant reduction occurs between June 30, 2021, and December 31, 2021, indicating possible debt repayments or restructuring efforts during this timeframe.

Total Assets

Total assets also follow a downward trajectory across the available dates. Beginning at $262,021 million on March 31, 2020, assets contract gradually to $198,874 million by December 31, 2021. Thereafter, they fluctuate moderately but continue to trend downward to roughly $124,123 million by March 31, 2025. The decline is relatively consistent, though some periods show minor recoveries, suggesting periodic asset acquisitions or revaluations.

Debt to Assets Ratio

The debt-to-assets ratio declines markedly from 0.32 in early 2020 to 0.18 by December 31, 2021, reflecting the more rapid reduction in total debt relative to total assets. This ratio further decreases to approximately 0.13 by March 31, 2024, indicating improved leverage and potentially enhanced financial stability. However, a slight increase is observed from mid-2024 onwards, rising to 0.16 by the latest date, which may imply that the pace of asset reduction is exceeding debt reduction during this later period.

Overall, the trends suggest a strategic effort to reduce debt substantially over the examined timeframe, accompanied by a consistent contraction in total assets. The improvement in the debt-to-assets ratio points to better capitalization, although the recent uptick in the ratio warrants monitoring to ensure continued financial health.

The data reveals several notable trends in the financial position over the reported quarters.

Total assets

Total assets demonstrate a general downward trend from March 2020 through March 2025. Starting at approximately 262 billion USD in the first quarter of 2020, total assets decreased significantly by the end of 2021, falling below 200 billion USD (198.9 billion USD in December 2021). This decline continued with fluctuations, remaining around 160 billion USD to 170 billion USD in 2023 and then further dropping to approximately 123 billion USD by mid-2024. There is a slight uptick toward the end of the period, but overall the trend indicates a substantial reduction—over 50%—in total asset levels across the five-year span.

Shareholders’ equity

Shareholders’ equity followed a declining trajectory from March 2020 through early 2024. Equity started near 35 billion USD at the beginning of 2020 and decreased gradually with occasional modest recoveries—peaking briefly around 40.3 billion USD in December 2021. However, a sharper decline is observed afterward, with equity falling to below 20 billion USD by mid-2024. The latter quarters showed minor stabilization near 19 billion USD but no significant recovery by the end of the period. This pattern suggests erosion of net assets or retained earnings impacting the equity base.

Financial leverage (ratio)

Financial leverage, calculated as the ratio of total assets to shareholders’ equity, presents a mixed but overall increasing pattern with fluctuations. Initially, leverage was very high, exceeding 7.4 times in early 2020, indicating significant reliance on liabilities relative to equity. Notably, leverage decreased markedly to a low of around 4.9 during late 2021, coinciding with reductions in total assets and a peak in equity. Post-2021, leverage trends upward again, rising back toward levels above 6.0 by mid-2024, indicating increased use of debt or liabilities relative to equity despite the declining absolute values of assets and equity. This rebound in leverage may imply increased financial risk or strategic adjustments in the capital structure.

In summary, the data illustrates a company experiencing a continuous reduction in total asset base and shareholders’ equity over the five-year period, with temporary stabilization periods. The financial leverage ratio trends indicate periods of deleveraging followed by re-leveraging, which could reflect responses to market conditions or internal financial strategies. Overall, the declining asset and equity values coupled with fluctuating elevated leverage hint at potential challenges in maintaining asset growth and capital strength over time.

The financial data reveals notable fluctuations in Earnings Before Interest and Tax (EBIT) over the observed quarters. Initially, EBIT demonstrates a strong positive value at the start of 2020, followed by two consecutive quarters of negative performance, indicating operational challenges during the mid-2020 period. A partial recovery is seen by the end of 2020, but the EBIT values exhibit considerable volatility through 2021 and early 2022, including several negative quarters which suggest periods of operational losses or increased costs. From mid-2022 onwards, a clear upward trend emerges, with EBIT showing progressively higher positive values, reaching a significant peak in the first quarter of 2023. Although some short-term declines occur subsequently, the overall trajectory remains positive through the remainder of 2023 into early 2025, indicating improved operational efficiency and profitability.

Interest and other financial charges show a decreasing trend over the entire period. These charges start relatively high in early 2020 and gradually decline through to early 2025. The steady reduction may reflect successful debt management, refinancing efforts, or lower interest rates, contributing to reduced financial expenses and potentially enhancing net profitability.

The interest coverage ratio provides additional insight into the company’s ability to cover interest expenses from its earnings. This ratio starts with missing values, followed by a moderate level around 2.59 in late 2020. There is a sharp decline into negative figures during 2021 and early 2022, indicating that earnings were insufficient to cover interest charges in these periods, corroborating the challenges observed in EBIT. Following this, an improving and sustained upward trend is evident, with the ratio rising significantly from mid-2022. By early 2023 and thereafter, the ratio achieves notably strong coverage, peaking above 10 at times, reflecting robust earnings relative to interest expenses and indicating a healthier financial position and lower risk of financial distress.

Overall, the data suggests that after facing significant operational and financial difficulties in 2020 and 2021, the company has demonstrated marked recovery and strengthening through 2022 and beyond. The improving EBIT trend, combined with declining interest expenses and rising interest coverage ratios, signals enhanced operational performance, better cost control, and stronger capability to service debt obligations over time.