Paying users zone. Data is covered by 
.
Get to General Dynamics Corp. for $13.99, or
get to whole website for at least 3 months from $49.99.
Analysis of Investments
Difficulty: Advanced
Investment Accounting Policy
Cash and Equivalents and Investments in Debt and Equity Securities
General Dynamics considers securities with a maturity of three months or less to be cash equivalents. General Dynamics' cash balances are invested primarily in time deposits rated A-/A3 or higher. General Dynamics' investments in other securities are included in other current and noncurrent assets on the Consolidated Balance Sheet. General Dynamics reports the held-to-maturity securities at amortized cost. General Dynamics reports the available-for-sale securities at fair value. Changes in the fair value of available-for-sale securities are recognized as a component of other comprehensive income (loss) in the Consolidated Statement of Comprehensive Income. General Dynamics had no trading securities on December 31, 2017 or 2016.
Cash flows in 2016 and 2015 were affected negatively by growth in operating working capital in General Dynamics' Combat Systems group due to the utilization of deposits and the timing of billings on a large contract for a Middle Eastern customer, and in the Aerospace group from the build-up of inventory related to the new G500 and G600 aircraft programs and the liquidation of customer deposits associated with aircraft deliveries. In 2017, the growth in operating working capital due to these factors slowed and was offset by lower income tax payments.
Source: General Dynamics Corp., Annual Report
Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
General Dynamics Corp., adjustment to Net Earnings
USD $ in millions
Adjusted Ratios: Mark to Market Available-for-sale Securities (Summary)
General Dynamics Corp., adjusted ratios
| Ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | General Dynamics Corp.'s adjusted net profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by shareholders' equity. | General Dynamics Corp.'s adjusted ROE deteriorated from 2015 to 2016 and from 2016 to 2017. |
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by total assets. | General Dynamics Corp.'s adjusted ROA deteriorated from 2015 to 2016 and from 2016 to 2017. |
Adjusted Net Profit Margin
2017 Calculations
1 Net profit margin = 100 × Net earnings ÷ Revenue
= 100 × ÷ = %
2 Adjusted net profit margin = 100 × Adjusted net earnings ÷ Revenue
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | General Dynamics Corp.'s adjusted net profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Adjusted Return on Equity (ROE)
2017 Calculations
1 ROE = 100 × Net earnings ÷ Shareholders' equity
= 100 × ÷ = %
2 Adjusted ROE = 100 × Adjusted net earnings ÷ Shareholders' equity
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by shareholders' equity. | General Dynamics Corp.'s adjusted ROE deteriorated from 2015 to 2016 and from 2016 to 2017. |
Adjusted Return on Assets (ROA)
2017 Calculations
1 ROA = 100 × Net earnings ÷ Total assets
= 100 × ÷ = %
2 Adjusted ROA = 100 × Adjusted net earnings ÷ Total assets
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by total assets. | General Dynamics Corp.'s adjusted ROA deteriorated from 2015 to 2016 and from 2016 to 2017. |
