GE Aerospace (NYSE:GE)

Inventory Turnover

Inventory turnover demonstrates a fluctuating but overall declining trend from 3.8 in March 2021 to 2.34 by March 2025, indicating a slower rate of inventory movement over the years. Notably, there is a peak of 4.08 in June 2024 followed by a sharp decline, suggesting irregular inventory management efficiency.

Receivables Turnover

The receivables turnover ratio shows moderate volatility, starting at 4.37 in March 2021, increasing to a notable peak of 6.13 in September 2024, followed by a decline to 3.73 by March 2025. This indicates fluctuations in the rate at which receivables are collected, with periods of improved collection efficiency interspersed with slowdowns.

Payables Turnover

Payables turnover remained relatively stable with slight decreases through the periods, generally ranging between approximately 3.67 and 2.85. A sharp increase is observed in June 2024 to 5.01, followed by a decrease, signaling changes in payment practices or supplier terms during that timeframe.

Working Capital Turnover

Working capital turnover exhibits significant growth starting from 2.26 in March 2021, rising steeply to peaks such as 13.29 in December 2021 and maintaining high levels thereafter, including a peak of 13.68 in March 2025. This suggests improved efficiency in using working capital to generate sales, with some variability over time.

Average Inventory Processing Period

The average inventory processing period generally increased from 96 days in March 2021 to a high of 156 days in March 2025, indicating extended time to process inventory. There are intermittent decreases, but the overall trend suggests growing inventory holding duration and possibly slower inventory turnover.

Average Receivable Collection Period

This period fluctuates moderately, remaining around the 75-90 day mark, with a low point of 60 days in March 2024 and higher values reaching up to 98 days in March 2025. These variations reflect changes in credit and collection policies impacting the duration of receivables outstanding.

Operating Cycle

The operating cycle has generally lengthened, increasing from 179 days in March 2021 to 254 days by March 2025, indicating a longer time span to complete the full operation from inventory purchase to cash collection. This increase aligns with the rise in inventory processing and receivables collection periods.

Average Payables Payment Period

The payables payment period shows a steady increase from 100 days in March 2021 to a peak of 128 days in December 2024, demonstrating a longer time to pay suppliers. A significant dip to 73 days is observed in March 2024, followed by a rise, indicating possible strategic changes in payment timing.

Cash Conversion Cycle

The cash conversion cycle varies between 76 and 126 days, showing an increasing trend over the years with some intermittent reductions. It extends mainly due to longer operating cycles and payables periods, suggesting that cash is tied up longer in the operating process before being converted back into cash inflows.

Cost of equipment and services sold

The cost of equipment and services sold shows a generally decreasing trend from early 2020 through the end of 2021, dropping from $15,696 million in March 2020 to about $14,338 million in December 2021. This period is followed by fluctuations with a notable decline in the first quarter of 2023 to $10,729 million, marking the lowest point in the series. After that, costs moderately increased again through the end of 2023, approaching $14,397 million by December. In 2024, the figures sharply decrease once more, dropping to a low of $5,575 million in June and then slightly rising but remaining lower than historical values through March 2025.

Inventories, including deferred inventory costs

Inventory levels have shown stability with moderate fluctuations from March 2020 to December 2022. The values generally fluctuate in the range of approximately $15,000 million to $17,500 million during this period. A decline appears in 2023, with the inventory decreasing to around $16,198 million in March and slightly dropping again by December 2023. However, in 2024 there is a marked reduction in inventory levels, particularly in the June to September quarters where values fall below $10,000 million. This lower inventory level continues into early 2025, though with a slight increase by March 2025.

Inventory turnover ratio

The inventory turnover ratio data starts from September 2020, initially showing a gradual decline from 3.8 to a low of 3.02 by September 2022. This indicates a slowdown in the rate at which inventory is being sold or used during that period. The turnover ratio slightly recovers in late 2022 and early 2023, peaking at 3.32 in March 2023, then declining again to around 3.02 by December 2023. In 2024, the ratio experiences greater volatility with sharp drops to 2.49 and 2.34 in the last two quarters, indicating slower inventory movement. However, an anomalous peak of 4.08 in March 2024 suggests a temporary acceleration in inventory turnover during that quarter.

Overall insights

The overall picture indicates some instability in both cost of goods sold and inventory management from 2023 into 2024. The significant decline in costs in early 2023 and 2024 corresponds with lower inventory levels and varying inventory turnover rates, suggesting possible operational adjustments, changes in demand, or supply chain impacts. The inventory turnover ratio's fluctuations imply inconsistent efficiency in inventory utilization over the periods analyzed. The sharp declines in costs and inventories in 2024 are noteworthy and may imply a strategic shift, market condition changes, or disruptions affecting the company's operational scale or supply chain dynamics.

The sales of equipment and services demonstrate a fluctuating pattern over the periods analyzed. Starting from a high of 20,272 million US dollars at the end of 2020, there's an observable decline through the first quarter of 2023, reaching a low of 13,694 million. Thereafter, the figures show partial recovery through the end of 2023, followed by a sharp decline in early 2024 before slight improvements towards the first quarter of 2025, albeit still below previous peaks.

Current receivables exhibit a more stable trajectory compared to sales, with moderate fluctuations around an average of approximately 15,000 to 17,000 million US dollars. After a minor dip around early 2023 to 14,212 million, the value rises again, then decreases significantly in the middle of 2024 before stabilizing slightly above 9,600 million by the first quarter of 2025. The overall trend indicates a gradual compression in receivables over the time frame, especially notable in 2024.

The receivables turnover ratio, reported for later periods, reflects variations that may correspond to the shifts in sales and receivables. Higher turnover ratios, peaking at 6.13 during mid-2024, suggest improved efficiency in collecting receivables during that period. However, subsequent decreases to values around 3.73 indicate reduced collection velocity or increased credit terms. The trend shows variability, with no consistent directional movement, implying periodic changes in the management of receivables, possibly in response to market conditions or company policies.

Sales of equipment and services

Overall decline from late 2020 highs, hitting bottom in early 2023 before partial recovery; sharp drop in early 2024 with minor improvements by early 2025.

Current receivables

Moderate stability with fluctuations; notable decrease in mid-2024 followed by stabilization below earlier period levels.

Receivables turnover ratio

Variable performance with a peak in mid-2024; indicates changes in receivables collection efficiency without sustained trend.

Cost of Equipment and Services Sold

The cost exhibits a generally declining trend from early 2020 through early 2023. Starting at approximately 15,696 million USD in March 2020, the value decreases to a lower range near 10,729 million USD by March 2023. This decline is followed by some fluctuations with values slightly rising and falling across 2023. Notably, in 2024, there is a sharp reduction in costs down to values below 7,000 million USD in the earlier quarters before a slight increase towards March 2025.

Accounts Payable

Accounts payable initially grow from around 15,212 million USD in March 2020 to a peak near 18,644 million USD in December 2022. After this peak, a significant decline occurs during 2023, falling to approximately 15,063 million USD by March 2023. The first quarter of 2024 shows a steep reduction to levels near 7,707 million USD, which remains relatively stable through December 2024 and early 2025, indicating a substantial decrease in outstanding liabilities.

Payables Turnover Ratio

The payables turnover ratio remains mostly stable around 3.3 from late 2020 through early 2023 with small fluctuations. However, starting in 2024, there is considerable volatility with the ratio spiking to 5.01 in March 2024, followed by a decrease and stabilization at lower values near 2.85 by March 2025. This shift suggests changes in the company's efficiency or terms in managing its payables, with quicker payment cycles in early 2024 transitioning to comparatively slower turnover by early 2025.

Overall Insights

The data reveals a notable reduction in both cost of equipment and services sold and accounts payable beginning in 2024, which may indicate operational scaling down, restructuring, or changes in procurement strategies. The corresponding fluctuations in payables turnover ratio support this, showing a period of accelerated turnover followed by a return to longer payables cycles, possibly reflecting adjustments in supplier payment policies or working capital management.

Working Capital

The working capital displayed notable fluctuations over the analyzed periods. Starting at approximately 9.9 billion USD in early 2020, it increased sharply to a peak of around 55.5 billion USD by the first quarter of 2021. Subsequently, it exhibited a downward trend with significant volatility, falling to below 3 billion USD by the first quarter of 2025. This decline after mid-2021 suggests a tightening of operational liquidity or a shift in asset and liability management strategies.

Sales of Equipment and Services

Sales figures for equipment and services fluctuated significantly across the reported quarters. Beginning near 18.8 billion USD in early 2020, sales experienced an initial decline heading into 2021, with values hovering around 16 to 19 billion USD. Post-2021, sales demonstrated some recovery and stabilization, reaching highs around 21 billion USD at the end of 2022. However, from 2023 onwards, sales showed a distinct decreasing pattern, dropping below 10 billion USD by early 2025. This downward trajectory may reflect changes in market demand, order backlogs, or external economic pressures affecting sales volume or pricing.

Working Capital Turnover

This ratio data, available starting from the end of 2020, reveals an increasing trend in working capital turnover over time. From a value of approximately 2.26 at the end of 2020, the turnover ratio rose steadily, reaching a peak near 13.7 by the first quarter of 2025. The increase indicates improved efficiency in using working capital to generate sales, reflecting either reduced working capital consumption or more effective revenue generation relative to capital employed. This trend aligns with the observed reduction in working capital and the varying sales figures, emphasizing enhanced operational efficiency or asset utilization.

Inventory Turnover

The inventory turnover ratio demonstrates a generally declining trend over the observed periods. Starting at 3.8 in early 2021, the ratio gradually decreased to values around 3.0 by the end of 2022. Some fluctuations appear, such as a slight increase to 3.32 in mid-2023, followed by another gradual decline through 2024. Notably, a sharp increase to 4.08 is recorded in mid-2024, but this is quickly followed by a decline back to as low as 2.34 by the first quarter of 2025. This pattern reflects varying efficiency in managing inventory levels relative to sales or usage.

Average Inventory Processing Period

The average inventory processing period, measured in number of days, inversely corresponds to the inventory turnover trend. Beginning at 96 days in early 2021, it steadily increased, reaching over 120 days by late 2022 and peaking at 141 days at the end of 2023. There is a notable dip to 89 days in mid-2024, coinciding with the spike observed in inventory turnover, indicating improved inventory processing efficiency for that short period. However, by early 2025, the period extends again substantially to 147 and 156 days, suggesting a slowdown in inventory movement and potentially higher holding costs or reduced sales velocity.

Overall Analysis

The data reveal that the company experienced fluctuations in inventory management efficiency over the observed quarters. The periods of lower inventory turnover and extended average processing days may indicate challenges in inventory clearance or reduced demand. Conversely, brief improvements suggest tactical adjustments or temporary market conditions favoring faster inventory movement. The late 2024 and early 2025 data highlight potential concerns regarding inventory accumulation or slower sales, warranting further review of operational practices and market strategy.

Receivables Turnover

The receivables turnover ratio was not available until the period ending March 31, 2021, from which it started at 4.37 and showed a consistent upward trend during 2021, reaching a peak of 4.83 at the end of the year. In 2022, the turnover ratio gradually declined, dropping to 4.19 by December 31, 2022. The ratio improved to 5.00 in the first quarter of 2023 but then exhibited volatility throughout 2023 and early 2024, with values fluctuating between 3.73 and 6.13. The most recent data at March 31, 2025 reflects a relatively low turnover of 3.73, indicating slower receivables collection relative to previous periods.

Average Receivable Collection Period

The average collection period inversely mirrored the turnover ratio trends. Beginning at 83 days on March 31, 2021, the collection period shortened steadily through 2021, reaching 76 days by December 31, 2021, indicating improved efficiency in collecting receivables. However, during 2022, the days outstanding gradually increased, peaking at 89 days in the fourth quarter, suggesting a slowdown in collections. Early 2023 saw a reduction to 73 days, implying enhanced collection efforts, but this was followed by oscillations throughout 2023 and into 2024. The collection period extended significantly to 97 and 98 days in the third and fourth quarters of 2024, respectively, and remained elevated with 98 days reported at March 31, 2025. This indicates a marked deterioration in receivables management timing in the most recent periods.

Overall Insights

The data exhibits cyclical fluctuations in receivables management efficiency over the observed periods. Initial improvements in turnover and collection periods in 2021 gave way to worsening metrics in late 2022. Although a brief recovery occurred in early 2023, the metrics again declined, with notable volatility suggesting inconsistent collection effectiveness. The significant increase in the average collection period and reduction in turnover ratio in late 2024 and early 2025 highlight potential challenges in credit management or customer payment patterns, which may warrant further investigation and strategic action to improve working capital efficiency.

Average inventory processing period

The average inventory processing period showed a generally increasing trend from March 2021 through December 2023, rising from 96 days to a peak of 121 days in December 2023. Following this peak, the period displayed some volatility with fluctuations between 89 and 147 days, ultimately reaching 156 days by March 2025. Notably, there was a significant drop to 89 days in March 2024, marking the shortest processing period in the observed range after the initial increase.

Average receivable collection period

The average receivable collection period experienced modest fluctuations over time. Starting at 83 days in March 2021, this period saw a gradual decrease to 73 days in March 2023. Afterwards, it increased to a high of 93 days in December 2023, followed by a pronounced decrease to 60 days in March 2024. Subsequently, the collection period rose once again to peak at 98 days by March 2025. Overall, the pattern reveals variability without a consistent upward or downward trend.

Operating cycle

The operating cycle demonstrated a generally upward trajectory over the timeframe. Beginning at 179 days in March 2021, the cycle extended to 207 days by December 2023, reflecting lengthening operational activities. A sharp increase was noted in December 2024, reaching 244 days, and further extended to 254 days by March 2025. Occasional dips were observed, particularly in March 2024 when the cycle dropped to 149 days, coinciding with the reduced inventory processing and receivable collection periods during the same time.

Payables Turnover

The payables turnover ratio, beginning from the earliest available data in March 31, 2020, shows a general declining trend through to December 31, 2020, and this decrease continues into 2024 with some fluctuations. From a value of 3.67 in March 31, 2020, the ratio gradually declines to a low of 2.85 by March 31, 2025, indicating a slowdown in the frequency of payables being paid within the year. However, in June 30, 2024, a notable peak at 5.01 interrupts this downward trend, suggesting a brief period of much quicker payment or turnover before the ratio drops back down again in subsequent quarters.

Average Payables Payment Period

The average payables payment period is inversely related to the payables turnover and correspondingly shows an increasing trend over the observed periods. Starting at 100 days at the earliest recorded data point during March 31, 2020, the payment period lengthens progressively to 128 days by March 31, 2025, implying that the company is taking longer to settle its payables over time. There is a significant deviation in June 30, 2024 when the payment period shortens abruptly to 73 days before increasing again in subsequent quarters. This volatility aligns with the sharp spike seen in payables turnover during the same period.

Summary and Insights

The overall pattern suggests that the company progressively extends the time it takes to pay its suppliers, which could be driven by changes in working capital management, liquidity considerations, or shifts in supplier payment terms. The simultaneous decline in the payables turnover ratio reinforces this observation of slower payments. The sudden reversal in mid-2024, with a sharp increase in turnover and a marked reduction in payment period, indicates a temporary operational change, possibly a strategic push to reduce liabilities or a change in supplier relations. After this period, the trend towards longer payment cycles resumes, highlighting a consistent approach to managing payables with a preference for delayed settlements.

Average inventory processing period

The average inventory processing period shows an overall increasing trend from 96 days at the first recorded point to a peak of 147 days in September 2024, followed by a further rise to 156 days by March 2025. Notably, there was a sharp increase between June 2024 and March 2025, after a period of fluctuation around 110-120 days in the preceding years. This indicates a lengthening time to convert inventory into sales or production outputs in recent quarters.

Average receivable collection period

The receivable collection period demonstrates moderate variability, initially declining from 83 days to 73 days by March 2023, suggesting improved efficiency in collections. However, thereafter, it fluctuates with a notable decline to 60 days in March 2024, followed by an increase reaching 98 days by March 2025. This pattern suggests inconsistency in the timing of receivables, with a recent trend towards longer collection periods.

Average payables payment period

The payables payment period generally rises from 100 days to a peak of 128 days by March 2025, exhibiting a consistent tendency to extend the duration before paying suppliers. Although there were some minor decreases around mid-2023, the overall trend reveals increasing days payable, with a significant jump after June 2024.

Cash conversion cycle

The cash conversion cycle generally fluctuates between 76 and 125 days across the recorded periods, peaking at 126 days in March 2025. After relatively stable levels in early periods around 79-87 days, there is a marked increase starting in December 2023 and continuing through 2024 and early 2025. This indicates that the company is taking longer on average to convert its investments in inventory and receivables back into cash, potentially reflecting the combined effects of rising inventory processing and receivables collection periods relative to payables payment.