GE Aerospace (NYSE:GE)

The analysis of key financial performance indicators over multiple quarters reveals distinct patterns and trends in the company's operational efficiency and financial structure.

Return on Assets (ROA)

Initially, ROA data is unavailable for the early quarters, but from the first available period in March 2021, the company experienced negative returns on assets, indicating inefficiency in asset utilization with losses reflected in several consecutive quarters. This downward trend peaks around December 2022 with the lowest ROA recorded at approximately -3.23%. Subsequently, there is a notable recovery starting in early 2023, with ROA shifting into positive territory by March 2023. The upward trajectory continues strongly through to the end of the data period in September 2025, reaching values exceeding 6%, reflecting improved asset productivity and operational performance.

Financial Leverage

Financial leverage starts at a relatively high ratio, fluctuating around 7.5 until the end of 2020, suggesting significant use of debt or other liabilities in the capital structure. From early 2021, there is a marked decline in leverage down to approximately 4.93 by the end of 2021, indicating deleveraging or equity increase. However, from 2022 onwards, financial leverage trends upwards again, stabilizing in the range of 5.2 to nearly 6.82 by the last measured quarter. This suggests a moderate increase in borrowing or financial obligations relative to equity but remaining below the initial high values shown at the beginning of the series.

Return on Equity (ROE)

ROE exhibits considerable volatility, with no data available before March 2021. At that point, there is a sharp dip into negative figures, with the lowest value recorded around -18.56% in December 2022, signifying low profitability or even losses impacting shareholder returns. A substantial recovery follows thereafter, with ROE turning positive by early 2023 and rising drastically to over 40% by September 2025. This substantial improvement suggests enhanced profitability and efficient equity utilization over the latter part of the timeline.

In summary, the company faced significant financial challenges in the early 2021 to late 2022 period, as indicated by negative ROA and ROE measures accompanied by fluctuating leverage ratios. Following this period, the firm demonstrated marked recovery and growth in profitability and asset utilization, with both ROA and ROE improving significantly. The modest increase in financial leverage in the latter years suggests a balanced approach to funding growth with some reliance on debt, while maintaining improved returns to equity holders. Overall, the trends suggest a turnaround in performance and increasing financial health in the recent periods.

The financial data reveals distinct trends across key performance metrics over multiple quarters, highlighting notable fluctuations as well as phases of recovery and growth.

Net Profit Margin

The net profit margin was initially absent in early periods but showed a peak of 7.81% in the quarter ending March 31, 2021. Following this, a downward trend was observed, hitting negative values through 2021 and 2022, with the lowest margin at -9.17% in the quarter ended March 31, 2022. Beginning in early 2023, a recovery phase ensued, with margin values turning positive and progressively increasing, reaching approximately 20% by late 2025. This indicates a turnaround from losses to sustained profitability.

Asset Turnover

The asset turnover ratio, while lacking early data, remained relatively stable between 0.29 and 0.3 during 2020 and 2021. From early 2022, the ratio showed signs of improvement, peaking at 0.43 in the first quarter of 2023. Subsequent quarters saw fluctuations, with values ranging around 0.29 to 0.42, suggesting variations in asset utilization efficiency that slightly declined towards the end of the observed period.

Financial Leverage

Financial leverage started at a high ratio above 7 in early 2020, gradually declining to below 5 by the end of 2021. After this low point, the leverage ratio exhibited an increasing trend through 2023 and 2024, fluctuating between approximately 5.2 and 6.8. This pattern indicates an ongoing adjustment in the capital structure, with the company initially reducing leverage significantly before moderately increasing it again, potentially reflecting changes in financing strategy or capital needs.

Return on Equity (ROE)

ROE data mirrored the trends observed in net profit margin. Early quarters showed a strong positive return of 16.04%, followed by a pronounced decline into negative territory throughout 2021 and 2022, with values reaching nearly -18.56%. A strong recovery was evident starting in early 2023, with ROE rising sharply and consistently, reaching levels above 40% by late 2025. This recovery signals improved profitability and effective use of equity capital in later periods.

In summary, the data outlines a period of financial distress characterized by negative profitability and returns during the 2021–2022 timeframe, followed by a marked rebound beginning in 2023. Efficiency in asset use showed some variability but generally stabilized, while leverage was managed downwards before increasing moderately again. Overall, the financial performance trends suggest strategic adjustments and operational improvements leading to enhanced profitability and shareholder returns in the most recent periods.

Tax Burden

The tax burden ratio exhibits fluctuations over the periods with some initial data gaps. It peaks at 1.09 in early 2021 but then declines significantly by early 2023, ranging between 0.32 and 0.95. From 2023 onward, it stabilizes between 0.85 and 0.94, suggesting a more consistent tax impact on pre-tax earnings during these later quarters.

Interest Burden

Interest burden data is initially sparse, with a notable negative value of -0.1 in late 2021 indicating an unusual financial occurrence during that period. Subsequently, it shows a steady improvement from 0.3 in early 2023 to a range of 0.81 to 0.92 by mid-2025, reflecting enhanced efficiency in managing interest expenses relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin reveals considerable volatility, with negative values predominating from late 2020 through late 2022, indicating periods of operating losses or margin compression. From early 2023, there is a marked and sustained improvement, with the margin climbing consistently and reaching above 25% by late 2025, demonstrating strong operational profitability growth in recent quarters.

Asset Turnover

Asset turnover ratios generally fluctuate within a moderate range, mostly between 0.29 and 0.43. The data shows incremental improvement from 2020 through mid-2023, indicating more effective use of assets in generating sales. However, a decline is noticed thereafter, with ratios decreasing toward 0.29-0.31 by late 2025, which may suggest diminishing efficiency in asset utilization over the last periods.

Financial Leverage

The financial leverage metric starts relatively high above 7.4 in early 2020 and gradually decreases to around 4.9 during 2021, indicating a reduction in debt relative to equity. Subsequently, it rises again, fluctuating mostly between 5.1 and 6.8 through 2025. This pattern suggests a moderate leverage position with some variability but no extreme leverage spikes during the later periods.

Return on Equity (ROE)

The return on equity shows significant volatility, with negative returns during the 2020-2022 timeframe reflecting losses or weak profitability from shareholders' perspective. From 2023 onward, the ROE improves dramatically, moving from slightly positive values to steadily rising above 40% by late 2025. This trend aligns with the improving EBIT margins and indicates a strong recovery in the company’s capacity to generate profit from shareholders' investments.

The financial performance exhibits notable variations over the observed quarterly periods, highlighting shifts in profitability, operational efficiency, and asset utilization.

Net Profit Margin (%)

The net profit margin data reveals considerable volatility. Initial data points are missing, but from early 2021, the margin was negative, starting with a decline to -4.68%, reaching a low near -9.17% by early 2022. Subsequently, from 2023 onward, a strong recovery is evident, with net profit margins improving significantly and positive margins exceeding 15% in late 2023 and early 2024. The margin continues to show strong profitability, peaking around 20.43% by mid-2025, indicating enhanced profitability and control over costs relative to revenue.

Asset Turnover (ratio)

Asset turnover ratios remained relatively steady with modest fluctuations. Starting around 0.29 in early reported periods, this ratio gradually increased to peak near 0.43 in late 2023, signaling improved efficiency in utilizing assets to generate sales. However, in mid- to late-2024, the ratio shows a decline back toward 0.29-0.31 territory by mid-2025. This suggests that while asset efficiency improved substantially at one point, there was a partial regression or stabilization at a lower utilization level later.

Return on Assets (ROA) (%)

Return on assets closely mirrors the trends observed in the net profit margin. Initially negative or near zero, the ROA exhibits a downward trend through 2021 and early 2022, falling to approximately -3.28%. This reflects periods of inefficient asset use and operational challenges. Starting in 2023, a significant turnaround is observed: ROA climbs steadily to surpass 6% by late 2024 and into 2025. This gradual and sustained improvement points to both stronger profitability and better asset management.

In summary, the data indicates a period of financial difficulty in 2021 and early 2022, with negative profitability and suboptimal asset returns. From 2023 onward, there is a marked and sustained improvement across all key financial metrics, suggesting effective strategic actions to enhance profitability and asset utilization. The decline in asset turnover toward the latter periods may warrant attention to examine causes, but overall profitability and returns have strengthened significantly by mid-2025.

The financial indicators demonstrate several trends over the observed periods, revealing a trajectory of recovery and improvement after a phase of negative performance.

Tax Burden

The tax burden ratio shows fluctuations with a general downward trend starting from around 1.09 in early 2021 to values consistently below 1.0 from 2023 onward. This suggests changes in tax efficiency or effective tax rate adjustments, with the ratio stabilizing near 0.85 to 0.90 in the latest periods.

Interest Burden

The interest burden ratio experienced significant volatility initially, including negative values in 2021, which might indicate interest expenses exceeding earnings temporarily or accounting anomalies. From 2023 forward, there is a clear upward trend, with the ratio improving steadily from 0.30 to above 0.90 by 2025, indicating better management of interest expenses relative to earnings.

EBIT Margin

The EBIT margin displays marked instability in 2020 and early 2021, including negative margins as low as -6.94% and -5.06%. However, a strong recovery is observed starting in 2022, with margins improving significantly to over 15%, and peaking above 25% in the final quarters. This upward trend reflects considerable enhancement in operating profitability over time.

Asset Turnover

Asset turnover ratios remain relatively stable throughout, mostly oscillating between 0.29 and 0.43. There is a slight improvement in 2022 and early 2023, indicating a modest increase in the efficiency of assets in generating revenues. However, periods toward 2024 and 2025 show a decline, suggesting some variability in asset utilization efficiency.

Return on Assets (ROA)

ROA mirrors the earlier volatility seen in EBIT margin, with negative returns in 2020 and 2021, reflecting unprofitable operations or asset inefficiency during this time. From 2022 onwards, ROA rises steadily, reaching above 6% by late 2025. This improvement indicates increased profitability and better utilization of the company’s asset base.

In summary, the data indicates that after a challenging period with substantial operating losses and inefficiencies, the financial performance improved significantly. Operating profitability (EBIT margin) and overall returns (ROA) strengthened strongly from 2022 onward. Interest burden improved markedly as well, which may have contributed to overall profitability enhancements. Asset turnover remained mostly steady, suggesting consistent operational activity levels despite fluctuations in profitability.

The financial ratios over the analyzed periods reveal notable fluctuations and trends in profitability and operational efficiency.

Tax Burden

The tax burden ratio is absent in earlier periods but becomes available from March 2021 onwards. Initial values show relatively high variability, starting above 1.0, then dropping significantly below 0.5 in early 2023 before stabilizing between approximately 0.75 and 0.9 in subsequent periods. This suggests a reduction in effective tax rates or changes in tax-related accounting that improved after early 2023 and maintained a more consistent burden through to mid-2025.

Interest Burden

The interest burden ratio data appear intermittently. It indicates a challenging period around December 2020 with a notably negative value, implying high interest expenses relative to earnings before interest and taxes during that quarter. Following that, the ratio recovers steadily, rising from 0.3 in early 2023 to around 0.9 by mid-2025. This trend denotes improved capacity to cover interest expenses from operating earnings, enhancing financial stability over time.

EBIT Margin

The EBIT margin exhibits considerable volatility early on, with positive figures around 11.6% in early 2020, followed by significant declines, including negative margins reaching nearly -7% by early 2021. Starting in late 2022, the margin improves markedly, exceeding 15% and reaching above 25% by the end of 2024. This upward trajectory signals strong growth in operating profitability, suggesting effective cost management and revenue improvements.

Net Profit Margin

The net profit margin trends mirror those of EBIT margin but with greater negative impacts in some periods. From a positive 7.8% in early 2020, it dips into negative territory, falling near -9% in early 2021, indicating net losses significantly affected by operational and financial challenges. A recovery phase begins around late 2022, with margins improving to approximately 20% by the end of 2024, illustrating a successful turnaround toward solid net profitability.

Overall, the data depict a phase of operational and financial difficulty in 2020 and early 2021, followed by a progressive recovery. Improvements in interest burden and tax burden ratios complement rising EBIT and net profit margins, indicating a strengthening financial position and enhanced profitability capacity heading into 2025.