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General Dynamics Corp. pages available for free this week:
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Price to Operating Profit (P/OP) since 2005
- Aggregate Accruals
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Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
General Dynamics Corp., adjustment to net earnings
US$ in millions
| 12 months ended: | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|---|
| Net earnings (as reported) | ||||||
| Add: Unrealized gains (losses) on marketable securities | ||||||
| Net earnings (adjusted) |
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).
The financial data for the reviewed periods from 2015 through 2019 indicates a stable yet slightly increasing trend in both reported and adjusted net earnings. Both metrics remain closely aligned throughout the entire time frame, suggesting limited adjustments or reconciling items between reported and adjusted figures.
- Reported Net Earnings
- The reported net earnings show a marginal decrease from 2965 million US dollars in 2015 to 2912 million US dollars in 2017, reflecting a slight dip over the first three years. However, there is a noticeable recovery starting in 2018 with earnings rising to 3345 million US dollars, followed by a further increase to 3484 million US dollars in 2019. This upward movement signifies an overall positive performance in the latter years.
- Adjusted Net Earnings
- Adjusted net earnings follow a pattern nearly identical to the reported net earnings, with values fluctuating from 2963 million US dollars in 2015 to a low of 2917 million US dollars in 2017. Subsequently, the adjusted earnings experience significant growth in 2018 and 2019, increasing to 3345 million US dollars and then 3484 million US dollars, respectively. The close correlation with the reported values highlights stability in the adjustments applied.
Overall, the data indicates that net earnings experienced minor volatility in the early years reviewed, followed by solid growth in the last two years. The parallel movement of reported and adjusted net earnings underscores consistency in financial reporting and suggests that the adjustments made do not materially affect the reported earnings trajectory.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
General Dynamics Corp., adjusted profitability ratios
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).
The analysis of the financial performance over the five-year period reveals a generally declining trend in profitability margins and returns, with some fluctuations in equity returns.
- Net Profit Margin
- Both reported and adjusted net profit margins exhibit a slight downward trend from 9.42% in 2015 to 8.85% in 2019. The margins remained relatively stable during the initial years, fluctuating marginally between 9.40% and 9.42% from 2015 to 2017. However, a gradual decrease is observed starting in 2018, continuing into 2019, suggesting a modest reduction in profitability relative to revenue.
- Return on Equity (ROE)
- The reported and adjusted ROE values are close and show a less consistent pattern over the period. After a peak of 27.61% reported in 2015, there is a slight decline through to 2017, reaching 25.47%, followed by a recovery to 28.51% in 2018. This peak indicates an improvement in generating returns on shareholders' equity during that year. However, in 2019, the ROE dips again to 25.66%, indicating a reduction in efficiency or profitability in that final year of analysis.
- Return on Assets (ROA)
- There is a clear downward trend in both reported and adjusted ROA throughout the period, falling from 9.27% in 2015 to 7.13% in 2019. This steady decline highlights a decrease in the company's ability to effectively utilize its assets to generate profit. The drop is especially notable after 2016, suggesting either rising asset bases not matched by profit growth or a decline in operational efficiency.
Overall, the data suggests that while the company maintained relatively stable net profit margins in the early years, both profitability and asset returns declined gradually over the five-year period. Return on equity showed some volatility with a temporary rebound in 2018 before declining again in 2019. The consistent decreases in ROA and net margin may reflect increased cost pressures or investments impacting short-term profitability. These trends could warrant further investigation into operational efficiency and capital management practices to identify underlying causes of performance variations.
General Dynamics Corp., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
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 Net profit margin = 100 × Net earnings ÷ Revenue
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net earnings ÷ Revenue
= 100 × ÷ =
- Net Earnings Trend
- The reported net earnings show a relatively stable pattern from 2015 to 2017, with values around 2,900 million US dollars. From 2017 onwards, there is a noticeable increase, reaching 3,484 million US dollars in 2019. The adjusted net earnings closely follow the reported figures with almost identical values, suggesting minimal adjustments over the periods.
- Net Profit Margin Trend
- The reported net profit margin remains steady around 9.4% between 2015 and 2017, experiencing a slight decline starting in 2018 and dropping to 8.85% by 2019. The adjusted net profit margin shows an analogous trend, confirming consistency between reported and adjusted figures.
- Insights
- Despite the increase in net earnings from 2017 to 2019, the net profit margin shows a gradual decline, which may indicate rising costs or expenses affecting profitability relative to revenue. The close alignment between reported and adjusted metrics suggests that financial adjustments had a minimal impact on the firm's earnings and margin figures during this timeframe.
Adjusted Return on Equity (ROE)
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 × ÷ =
2 Adjusted ROE = 100 × Adjusted net earnings ÷ Shareholders’ equity
= 100 × ÷ =
The financial data over the five-year period reflects relatively stable performance with some fluctuations in key profitability metrics. Reported net earnings show minor variations from 2015 to 2017, with a slight decline followed by a notable increase in 2018 and 2019. Adjusted net earnings closely align with the reported figures, indicating minimal impact from adjustments on bottom-line profitability.
- Net Earnings
- Reported net earnings began at 2965 million US dollars in 2015, decreased slightly to 2912 million US dollars by 2017, and then increased to 3345 million in 2018 and further to 3484 million in 2019. Adjusted net earnings mirrored this trend, suggesting consistent operational results without significant one-off adjustments.
- Return on Equity (ROE)
- Reported ROE started at 27.61% in 2015, showing a gradual decline to 25.47% in 2017. In 2018, there was a recovery with an increase to 28.51%, followed by a decrease to 25.66% in 2019. Adjusted ROE values display a similar pattern, matching reported ROE nearly identically across all years, which suggests that adjustments had negligible effects on the calculation of equity returns.
- Insights
- The overall trend indicates that the company maintained strong profitability and efficient use of equity capital, despite slight fluctuations. The peak performance year appears to be 2018, with the highest net earnings and ROE, before a mild decline in 2019. The alignment between reported and adjusted figures highlights consistent financial reporting without significant corrections or anomalies.
Adjusted Return on Assets (ROA)
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 × ÷ =
2 Adjusted ROA = 100 × Adjusted net earnings ÷ Total assets
= 100 × ÷ =
The financial data reveals a nuanced picture of the company's performance over the five-year period ending December 31, 2019.
- Net Earnings
- Reported net earnings remained relatively stable from 2015 to 2017, with a slight decline from 2965 million US dollars in 2015 to 2912 million US dollars in 2017. However, a marked improvement occurred in 2018 and 2019, reaching 3345 million and 3484 million US dollars respectively. Adjusted net earnings closely follow the reported figures, showing minimal discrepancy and similar trends, which indicates consistency between reported and adjusted earnings during this timeframe.
- Return on Assets (ROA)
- Both reported and adjusted ROA percentages exhibit a downward trend throughout the period analyzed. The reported ROA decreases from 9.27% in 2015 to 7.13% in 2019, with a similar pattern seen in the adjusted ROA figures. Interestingly, the decline in ROA occurs despite the increase in net earnings in the later years, suggesting that asset growth or changes in asset utilization may be influencing the reduced efficiency in generating earnings from assets.
Overall, the company demonstrated an upswing in profitability during the latter part of the period, yet experienced a consistent decline in asset profitability, hinting at potential shifts in asset management or investment strategies.