Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

General Dynamics Corp., balance sheet: goodwill and intangible assets

US$ in millions

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Contract and program intangible assets	3,776)	3,771)	1,684)	1,633)	1,626)
Trade names and trademarks	474)	469)	465)	446)	455)
Technology and software	164)	165)	137)	121)	119)
Other intangible assets	159)	159)	155)	154)	154)
Intangible assets, gross carrying amount	4,573)	4,564)	2,441)	2,354)	2,354)
Accumulated amortization	(2,258)	(1,979)	(1,739)	(1,676)	(1,591)
Intangible assets, net carrying amount	2,315)	2,585)	702)	678)	763)
Goodwill	19,677)	19,594)	11,914)	11,445)	11,443)
Intangible assets and goodwill	21,992)	22,179)	12,616)	12,123)	12,206)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Download chart

Item	Description	The company
Intangible assets, net carrying amount	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	General Dynamics Corp. intangible assets, net carrying amount increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	General Dynamics Corp. goodwill increased from 2017 to 2018 and from 2018 to 2019.
Intangible assets and goodwill	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	General Dynamics Corp. intangible assets and goodwill increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

General Dynamics Corp., adjustments to financial statements

US$ in millions

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Adjustment to Total Assets
Total assets (as reported)	48,841)	45,408)	35,046)	32,872)	31,997)
Less: Goodwill	19,677)	19,594)	11,914)	11,445)	11,443)
Total assets (adjusted)	29,164)	25,814)	23,132)	21,427)	20,554)
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported)	13,577)	11,732)	11,435)	10,976)	10,738)
Less: Goodwill	19,677)	19,594)	11,914)	11,445)	11,443)
Shareholders’ equity (adjusted)	(6,100)	(7,862)	(479)	(469)	(705)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

General Dynamics Corp., Financial Data: Reported vs. Adjusted

Download chart

General Dynamics Corp., adjusted financial ratios

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Total Asset Turnover
Reported total asset turnover	0.81	0.80	0.88	0.95	0.98
Adjusted total asset turnover	1.35	1.40	1.34	1.46	1.53
Financial Leverage
Reported financial leverage	3.60	3.87	3.06	2.99	2.98
Adjusted financial leverage	—	—	—	—	—
Return on Equity (ROE)
Reported ROE	25.66%	28.51%	25.47%	26.92%	27.61%
Adjusted ROE	—	—	—	—	—
Return on Assets (ROA)
Reported ROA	7.13%	7.37%	8.31%	8.99%	9.27%
Adjusted ROA	11.95%	12.96%	12.59%	13.79%	14.43%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	General Dynamics Corp. adjusted total asset turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	General Dynamics Corp. adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

General Dynamics Corp., Financial Ratios: Reported vs. Adjusted

Download chart

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Revenue	39,350)	36,193)	30,973)	31,353)	31,469)
Total assets	48,841)	45,408)	35,046)	32,872)	31,997)
Activity Ratio
Total asset turnover¹	0.81	0.80	0.88	0.95	0.98
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue	39,350)	36,193)	30,973)	31,353)	31,469)
Adjusted total assets	29,164)	25,814)	23,132)	21,427)	20,554)
Activity Ratio
Adjusted total asset turnover²	1.35	1.40	1.34	1.46	1.53

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 39,350 ÷ 48,841 = 0.81

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 39,350 ÷ 29,164 = 1.35

Download chart

Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	General Dynamics Corp. adjusted total asset turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets	48,841)	45,408)	35,046)	32,872)	31,997)
Shareholders’ equity	13,577)	11,732)	11,435)	10,976)	10,738)
Solvency Ratio
Financial leverage¹	3.60	3.87	3.06	2.99	2.98
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	29,164)	25,814)	23,132)	21,427)	20,554)
Adjusted shareholders’ equity	(6,100)	(7,862)	(479)	(469)	(705)
Solvency Ratio
Adjusted financial leverage²	—	—	—	—	—

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

¹ Financial leverage = Total assets ÷ Shareholders’ equity
= 48,841 ÷ 13,577 = 3.60

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 29,164 ÷ -6,100 = —

Download chart

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings	3,484)	3,345)	2,912)	2,955)	2,965)
Shareholders’ equity	13,577)	11,732)	11,435)	10,976)	10,738)
Profitability Ratio
ROE¹	25.66%	28.51%	25.47%	26.92%	27.61%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings	3,484)	3,345)	2,912)	2,955)	2,965)
Adjusted shareholders’ equity	(6,100)	(7,862)	(479)	(469)	(705)
Profitability Ratio
Adjusted ROE²	—	—	—	—	—

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

¹ ROE = 100 × Net earnings ÷ Shareholders’ equity
= 100 × 3,484 ÷ 13,577 = 25.66%

² Adjusted ROE = 100 × Net earnings ÷ Adjusted shareholders’ equity
= 100 × 3,484 ÷ -6,100 = —

Download chart

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings	3,484)	3,345)	2,912)	2,955)	2,965)
Total assets	48,841)	45,408)	35,046)	32,872)	31,997)
Profitability Ratio
ROA¹	7.13%	7.37%	8.31%	8.99%	9.27%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings	3,484)	3,345)	2,912)	2,955)	2,965)
Adjusted total assets	29,164)	25,814)	23,132)	21,427)	20,554)
Profitability Ratio
Adjusted ROA²	11.95%	12.96%	12.59%	13.79%	14.43%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

¹ ROA = 100 × Net earnings ÷ Total assets
= 100 × 3,484 ÷ 48,841 = 7.13%

² Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 3,484 ÷ 29,164 = 11.95%

Download chart

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	General Dynamics Corp. adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

General Dynamics Corp. (NYSE:GD)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

General Dynamics Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

General Dynamics Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)