Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Common-Size Income Statement
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
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Profitability Ratios (Summary)
GE Aerospace, profitability ratios
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The profitability metrics demonstrate a significant improvement over the five-year period. Initial years show negative or minimal profitability, followed by substantial gains in subsequent years. This suggests a successful turnaround or implementation of effective strategies to enhance operational efficiency and financial performance.
- Gross Profit Margin
- The gross profit margin exhibited initial stability, at approximately 24% in 2021 and 2022, before declining to 21.95% in 2023. A notable increase is then observed, reaching 30.79% in 2024 and further improving to 31.55% in 2025. This indicates increasing efficiency in production and cost management, or a shift towards higher-margin products.
- Operating Profit Margin
- The operating profit margin experienced a considerable decrease from 8.58% in 2021 to 6.05% in 2022. However, it rebounded strongly, reaching 8.49% in 2023 and then experiencing substantial growth to 23.29% in 2024 and 26.03% in 2025. This suggests successful control of operating expenses and improved core business performance.
- Net Profit Margin
- The net profit margin began with a negative value of -9.17% in 2021, indicating a net loss. It turned positive in 2022, reaching 0.31%, and then demonstrated substantial growth, increasing to 14.68% in 2023, 18.67% in 2024, and 20.57% in 2025. This signifies a significant improvement in overall profitability after accounting for all expenses, including interest and taxes.
- Return on Equity (ROE)
- The return on equity mirrored the trend of the net profit margin, starting with a negative value of -16.17% in 2021. It became positive in 2022 (0.62%) and then increased dramatically to 34.63% in 2023, followed by 33.90% in 2024 and a further increase to 46.60% in 2025. This indicates a substantial improvement in the return generated for shareholders.
- Return on Assets (ROA)
- The return on assets also began negatively at -3.28% in 2021, becoming positive in 2022 (0.12%). It then showed consistent growth, reaching 5.81% in 2023, 5.32% in 2024, and 6.69% in 2025. This demonstrates increasing efficiency in utilizing assets to generate profits.
Collectively, these ratios indicate a strong positive trend in profitability and efficiency. The company has moved from a position of loss to one of substantial profit generation and improved returns for both shareholders and asset utilization.
Return on Sales
Return on Investment
Gross Profit Margin
GE Aerospace, gross profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit from sales | ||||||
| Sales of equipment and services | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Gross profit margin = 100 × Gross profit from sales ÷ Sales of equipment and services
= 100 × ÷ =
2 Click competitor name to see calculations.
The gross profit margin exhibited fluctuations over the five-year period. While gross profit from sales and sales of equipment and services experienced varying levels of performance, the gross profit margin demonstrated a distinct pattern of initial increase followed by a decline and subsequent recovery.
- Gross Profit Margin Trend
- The gross profit margin began at 24.19% in 2021, increasing to 24.55% in 2022. A subsequent decline was observed in 2023, with the margin falling to 21.95%. A significant increase occurred in 2024, reaching 30.79%, and continued into 2025, rising to 31.55%.
- Relationship to Sales
- Gross profit from sales generally tracked the trend in sales of equipment and services, although not proportionally. Sales increased from 2021 to 2022, and gross profit followed suit. Both sales and gross profit decreased in 2023. The substantial drop in sales in 2024 was accompanied by a disproportionately smaller decrease in gross profit, resulting in a higher gross profit margin. Sales partially recovered in 2025, while gross profit also increased, maintaining the elevated margin.
- Margin Expansion
- The increase in gross profit margin in 2024 and 2025 suggests improved cost management or pricing strategies despite lower overall sales volume in 2024. The ability to maintain a higher margin with reduced sales indicates potential operational efficiencies or a shift in product mix towards higher-margin offerings. The 2025 figures suggest this improvement was sustained alongside a partial sales recovery.
In summary, the gross profit margin demonstrates a dynamic relationship with sales, with recent periods indicating an ability to improve profitability even amidst fluctuating revenue levels.
Operating Profit Margin
GE Aerospace, operating profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Sales of equipment and services | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Operating Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Operating Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Operating profit margin = 100 × Operating income ÷ Sales of equipment and services
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited significant fluctuation over the five-year period. Initial performance demonstrated a decline followed by substantial improvement. Operating income increased overall, but the relationship with sales varied considerably, driving the observed margin changes.
- Operating Profit Margin - Overall Trend
- The operating profit margin began at 8.58% in 2021, decreased to a low of 6.05% in 2022, and then showed a consistent and accelerating increase, reaching 26.03% by 2025. This indicates improving operational efficiency and/or pricing power in the later years of the period.
- 2021-2022 Performance
- A decrease in the operating profit margin from 8.58% to 6.05% occurred between 2021 and 2022. While sales of equipment and services increased slightly, operating income decreased more substantially, resulting in the margin contraction. This suggests potential increases in operating costs or a less favorable sales mix during this period.
- 2022-2023 Recovery
- The operating profit margin recovered to 8.49% in 2023. This improvement coincided with an increase in operating income, despite a decrease in sales of equipment and services. This suggests improved cost control or a shift towards higher-margin products/services.
- 2023-2025 Significant Expansion
- The period from 2023 to 2025 witnessed a dramatic expansion of the operating profit margin, rising from 8.49% to 26.03%. This was driven by a substantial increase in operating income relative to sales. Although sales increased from 35,121 to 42,322 between 2024 and 2025, the operating income increase was proportionally larger, indicating a significant improvement in profitability. The substantial drop in sales between 2023 and 2024, followed by a recovery, warrants further investigation to understand the underlying drivers.
In summary, the operating profit margin demonstrates a volatile but ultimately positive trend. The substantial improvement in recent years suggests successful implementation of strategies to enhance operational efficiency and profitability.
Net Profit Margin
GE Aerospace, net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to the Company | ||||||
| Sales of equipment and services | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Net Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Net Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net profit margin = 100 × Net income (loss) attributable to the Company ÷ Sales of equipment and services
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin demonstrates a significant improvement over the observed period. Initially negative, the metric trends positively, indicating increasing profitability relative to revenue.
- Net Profit Margin Trend
- In 2021, the net profit margin was -9.17%, reflecting a net loss relative to sales. A substantial shift occurred in 2022, with the margin turning positive at 0.31%. This positive trend continued, with the margin increasing to 14.68% in 2023. Further gains were realized in 2024, reaching 18.67%, and continued into 2025, culminating in a net profit margin of 20.57%.
The progression from a negative margin to over 20% suggests successful implementation of strategies to improve operational efficiency, cost control, or revenue generation. The increasing margin indicates that the company is retaining a larger portion of its revenue as profit over time.
- Relationship to Sales
- While net income attributable to the Company increased substantially from 2021 to 2023, sales of equipment and services decreased from 2023 to 2024. Despite this sales decline, the net profit margin continued to improve in 2024, suggesting that cost management or pricing strategies effectively offset the revenue reduction. Sales increased again in 2025, and the net profit margin continued to climb.
The consistent upward trajectory of the net profit margin, even amidst fluctuations in sales, is a positive indicator of the company’s financial health and operational performance.
Return on Equity (ROE)
GE Aerospace, ROE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to the Company | ||||||
| Shareholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| ROE, Sector | ||||||
| Capital Goods | ||||||
| ROE, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
ROE = 100 × Net income (loss) attributable to the Company ÷ Shareholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Equity (ROE) exhibited significant volatility over the observed period. Initially negative, it demonstrated substantial improvement, culminating in a pronounced upward trend.
- Net Income
- Net income attributable to the Company transitioned from a substantial loss in 2021 to positive figures in subsequent years. The largest increase occurred between 2022 and 2023, followed by a slight decrease in 2024, and a further increase in 2025. This positive trend in net income is a primary driver of the observed ROE changes.
- Shareholders’ Equity
- Shareholders’ equity experienced a consistent decline from 2021 through 2025. While the rate of decrease slowed in the later years, the overall trend is downward. This decreasing equity base, in conjunction with increasing net income, significantly influences the ROE calculation.
- Return on Equity (ROE)
- ROE was negative in 2021, registering at -16.17%. It recovered to 0.62% in 2022, indicating a move towards profitability. A substantial increase was then observed in 2023, with ROE reaching 34.63%. This upward momentum continued into 2024, with ROE at 33.90%, before accelerating further to 46.60% in 2025. The increasing ROE, despite declining shareholders’ equity, suggests a growing efficiency in generating profits from existing equity.
The combination of recovering and then increasing net income alongside decreasing shareholders’ equity resulted in a dramatic improvement in ROE. The most significant change in ROE occurred between 2022 and 2023, and the trend continued with further gains through 2025. The accelerating ROE in the later periods warrants further investigation to determine the sustainability of this performance.
Return on Assets (ROA)
GE Aerospace, ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to the Company | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| ROA, Sector | ||||||
| Capital Goods | ||||||
| ROA, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
ROA = 100 × Net income (loss) attributable to the Company ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited a significant improvement over the observed period. Initially negative, the ROA trended positively, demonstrating increasing profitability relative to the company’s asset base.
- Net Income and ROA Relationship
- A substantial shift from a net loss in 2021 to net income in subsequent years directly influenced the ROA. The negative net income of -6,520 million in 2021 resulted in a corresponding ROA of -3.28%. The positive net income of 225 million in 2022 led to a modest ROA of 0.12%, indicating a move towards profitability. Further increases in net income to 9,481 million, 6,556 million, and 8,704 million in 2023, 2024, and 2025 respectively, drove the ROA to 5.81%, 5.32%, and 6.69%.
- Asset Base Trend
- Total assets decreased from 198,874 million in 2021 to 163,045 million in 2023. This reduction in the asset base, coupled with increasing net income, contributed to the substantial improvement in ROA between 2021 and 2023. Assets then experienced a slight increase to 130,169 million in 2025, but the continued growth in net income resulted in a further increase in ROA.
The ROA demonstrates a clear positive trajectory, indicating enhanced efficiency in utilizing assets to generate earnings. The most significant improvement occurred between 2021 and 2023, driven by both a recovery from net losses and a reduction in the asset base. While assets fluctuated, the consistent growth in net income continued to support a positive ROA trend through 2025.
- ROA Peak and Recent Performance
- The highest ROA observed during the period was 6.69% in 2025. Although the ROA experienced a slight decrease from 5.81% in 2023 to 5.32% in 2024, it recovered and surpassed the 2023 level in 2025, suggesting a sustained improvement in asset utilization and profitability.