General Dynamics Corp. (NYSE:GD)

Debt to equity

Over the observed period, this ratio displayed a generally increasing trend from 0.32 in early April 2016 to a peak of 1.36 by March 2020. There was a notable sharp increase between April 2018 (0.55) and July 2018 (1.19), with fluctuations following this peak, decreasing to 0.91 in late September 2020.

Debt to capital

This ratio also rose steadily from 0.24 in April 2016 to a high of 0.58 in March 2020. Similar to the debt to equity ratio, a sharp increase occurred between April and July 2018, indicating a heightened reliance on debt within the company's capital structure. Post-peak, a gradual reduction was noted, ending at 0.48 by September 2020.

Debt to assets

The ratio of debt to assets followed a comparable pattern, increasing from 0.11 in April 2016 to a maximum of 0.34 recorded in March 2020. This suggests that a larger portion of the company's assets were financed through debt over time, with a sharp rise between April and July 2018 mirrored in the other debt ratios. A decline after the peak led to a value of 0.27 at the end of the period.

Financial leverage

The financial leverage ratio rose moderately from 3.00 in April 2016 to a peak of 4.07 in March 2020, reflecting an increase in the company's use of borrowed funds relative to equity. The ratio experienced a noticeable escalation from 3.16 in April 2018 to 3.93 in July 2018, aligning with the trend seen in debt-related ratios. Afterwards, a slight downturn occurred, closing at 3.42 in September 2020.

Summary of trends

Across all leverage and debt-related metrics, a distinct pattern emerges: moderate increases occurred up to early 2018, followed by a sharp spike around mid-2018, suggesting a period of significant debt accumulation. This period of elevated leverage persisted through early 2020, with peak values generally reached around March 2020. Subsequent quarters showed a gradual reduction in leverage and debt ratios, indicating a strategic effort to deleverage or stabilize the company's capital structure.

The financial data reveals noteworthy trends in the company's leverage and equity position over the observed quarterly periods. Both total debt and shareholders’ equity exhibit fluctuations that influence the debt to equity ratio and overall financial structure.

Total Debt

Total debt demonstrates a general upward trend with significant variability. Beginning at a moderate level around 3,400 million USD in early 2016, it peaks sharply during mid-2018 with an increase reaching as high as approximately 14,278 million USD. Following this peak, total debt decreases somewhat but remains elevated compared to earlier periods, oscillating between about 13,000 million and 18,000 million USD towards late 2020.

Shareholders’ Equity

Shareholders’ equity shows a relatively steady increase over the observed time frame. Starting at approximately 10,582 million USD in early 2016, equity progresses with some fluctuations but maintains an overall rising trend, attaining around 14,716 million USD by late 2020. Despite some quarter-to-quarter variability, equity growth appears moderately consistent without extreme volatility.

Debt to Equity Ratio

The debt to equity ratio illustrates the combined effects of debt and equity movements on the company's leverage. Initially, the ratio remains low and stable, hovering around 0.3 to 0.4 through early 2017, indicating a conservative leverage position. However, beginning in 2018, the ratio increases sharply, spiking to over 1.1 at certain points, reflecting that total debt began to surpass equity during this period. Post mid-2018, although the ratio declines slightly, it continues to fluctuate above 0.9 through late 2020, signifying sustained higher leverage compared to the earlier periods.

Overall, the company’s financial structure shows a shift from relatively low leverage toward significantly higher debt levels beginning in 2018, while equity growth remains steady but less pronounced. The marked increase in debt relative to equity suggests increased reliance on borrowed funds, which may have implications for financial risk and cost of capital. Stakeholders should note this change in capital structure dynamics as it signals altered financial flexibility and risk profile.

The analysis of the quarterly financial data reveals notable trends in the company's leverage and capital structure over the observed periods.

Total Debt

Total debt exhibited a general upward trajectory from approximately $3.4 billion in early 2016 to peaks exceeding $17.9 billion in early 2020. Initial increases were relatively gradual through 2016 and 2017, followed by a significant surge in the first half of 2018, where total debt more than doubled between the end of 2017 and mid-2018. Subsequent quarters saw fluctuations with a decreasing trend towards the end of 2019, before rising again to the highest levels observed in Q1 2020, after which debt slightly declined again. This pattern suggests periods of substantial borrowing, likely for strategic investments or acquisitions, with some deleveraging near the end of 2019.

Total Capital

Total capital reflected overall growth through the timeframe, increasing from about $14 billion in early 2016 up to nearly $31.2 billion by Q1 2020. Despite some volatility, particularly between 2018 and 2019, capital levels generally maintained an upward slope. The rapid increase noted during 2018 coincides with the rise in total debt, indicating that the company expanded its total capital base significantly then, likely supported by the higher leverage. Toward the end of the period, a slight reduction in total capital occurred alongside a decrease in debt.

Debt to Capital Ratio

The debt to capital ratio moved from approximately 0.24 in early 2016 to peaks around 0.58 in early 2020. The ratio demonstrated a gradual increase from 2016 through 2017, followed by a marked escalation through 2018 that peaked above 0.54. This elevated leverage level persisted with minor fluctuations through 2019 and into 2020. The ratio's increase aligns with the significant rise in total debt relative to capital. Nonetheless, the ratio showed some signs of moderation during the latter half of 2019 and beyond, indicating efforts to manage leverage.

In summary, the company experienced progressive growth in its capital base but relied increasingly on debt financing, particularly from late 2017 through early 2020. The elevated debt to capital ratios during this period reflect a strategic shift towards higher leverage to support expansion or other financial activities. These leverage levels, while higher than earlier years, appear to be somewhat controlled in the most recent quarters observed, suggesting ongoing attention to capital structure management.

The financial data reveals several key trends related to the company's leverage and asset base over the observed quarters.

Total Debt

Total debt exhibited a gradual increase from the initial period, starting at approximately $3.4 billion, rising moderately through 2016 and 2017. A notable surge occurred beginning in early 2018, where debt sharply increased, peaking around $14.3 billion by mid-2018. After this peak, total debt showed some fluctuations but maintained generally high levels relative to prior periods, declining somewhat toward the end of 2019 and early 2020 but again climbing sharply to nearly $18 billion by the first quarter of 2020 before tapering slightly thereafter.

Total Assets

Total assets followed an overall upward trajectory throughout the period, beginning at about $31.7 billion and steadily increasing to a peak above $53.7 billion by early 2020. Despite minor declines in some quarters, the company's asset base expanded consistently, particularly accelerating from 2017 onward. This growth in assets outpaced the earlier periods' slower rates, suggesting ongoing investment, acquisitions, or capital expansion activities.

Debt to Assets Ratio

The debt to assets ratio remained relatively stable and low at around 0.11 to 0.12 in the initial quarters through 2017, indicating low leverage relative to assets. Beginning in 2018, this ratio increased significantly, reaching a peak of approximately 0.34 in early 2020. This rise corresponds with the sharp increase in total debt during the same timeframe, while assets also increased but at a comparatively slower rate. Following this peak, there was a modest reduction in leverage ratios, stabilizing near 0.27 towards the last reported periods.

In summary, the company demonstrated a significant increase in debt levels starting in 2018, which outpaced asset growth temporarily and led to a higher leverage position during that timeframe. Despite this, total assets maintained a positive trajectory, indicating expansion in the asset base. The fluctuation in the debt to assets ratio suggests careful management of debt in relation to asset growth, with some deleveraging evident after the peak leverage in early 2020.

Over the analyzed quarterly periods, total assets demonstrated a general upward trend with occasional short-term fluctuations. Starting from approximately 31.7 billion US dollars at the beginning of the period, total assets increased steadily to a peak near 53.7 billion US dollars. Notable growth occurred in the intervals around mid-2018 and early 2020, although a slight decline was observed in mid-2020 before a relatively stable level was maintained.

Shareholders’ equity showed moderate growth across the same timeframe. Beginning at about 10.6 billion US dollars, equity gradually increased to reach approximately 14.7 billion US dollars by the end of the period. This increase was interrupted by some fluctuations, including a noticeable dip toward the end of 2018, but overall the trend remained upward with equity recovering thereafter and continuing to grow into 2020.

The financial leverage ratio, reflecting the relationship between total assets and shareholders’ equity, presented variability aligned with changes in assets and equity. Initially around 3.0, leverage rose gradually, peaking sharply at nearly 4.1 in early 2019 and again around mid-2020. This suggests periods of increased reliance on debt financing relative to equity. After peaking, the ratio decreased somewhat but remained elevated compared to earlier periods, indicating sustained higher leverage levels.

Total Assets

Exhibited consistent growth over the timeframe with a significant acceleration in late 2017 and mid-2018, followed by some variability but maintaining an overall upward momentum.

Shareholders’ Equity

Increased over time, reflecting strengthening net asset value, despite intermittent declines. The general trajectory was positive, supporting growth in book value equity.

Financial Leverage

Fluctuated moderately, showing a rising trend with peaks in 2019 and 2020, indicating periods when asset growth outpaced equity, suggesting a higher proportion of liabilities funding the assets.

Overall, the data reflect a growing asset base and a strengthening equity position, accompanied by varying but generally increasing leverage. These patterns indicate an expansionary phase with increased asset holdings funded by a mix of equity and debt, highlighting evolving capital structure dynamics during the observed quarters.