Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
GE Aerospace, solvency ratios
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Solvency ratios for the analyzed period demonstrate a generally improving financial position, though with some fluctuations. Initially, the company exhibited moderate leverage, which increased through 2024 before stabilizing. A key trend is the significant improvement in coverage ratios, indicating a strengthening ability to meet fixed and interest obligations.
- Debt Levels
- Debt to equity, both with and without the inclusion of operating lease liabilities, initially remained relatively stable between 2021 and 2022, then decreased in 2023. A reversal is observed in 2024 and 2025, with both ratios increasing, suggesting a reliance on debt financing. Debt to capital followed a similar pattern, remaining consistent for the first two years, decreasing in 2023, and then increasing in the subsequent two years. Debt to assets also decreased in 2023, then increased slightly in 2024 and remained stable in 2025.
- Leverage
- Financial leverage consistently increased throughout the analyzed period, moving from 4.93 in 2021 to 6.97 in 2025. This indicates a growing proportion of assets financed by debt, and a higher potential for amplified returns, but also increased financial risk.
- Coverage Ratios
- Interest coverage experienced a dramatic improvement. A negative value in 2021 indicated an inability to cover interest expenses with earnings. However, the ratio became positive in 2022 and increased substantially through 2025, reaching 12.86. This signifies a significantly enhanced capacity to service interest-bearing debt. Fixed charge coverage mirrored this trend, moving from a negative value in 2021 to 9.14 in 2025, demonstrating a strengthened ability to meet all fixed obligations.
In summary, while debt levels have shown some increase in recent years, the substantial improvement in coverage ratios suggests that the company’s ability to manage its debt obligations has improved considerably. The increasing financial leverage warrants continued monitoring, but is currently supported by strong earnings performance relative to fixed charges.
Debt Ratios
Coverage Ratios
Debt to Equity
GE Aerospace, debt to equity calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 1,686) | 2,039) | 1,253) | 3,757) | 4,361) | |
| Long-term borrowings | 18,808) | 17,234) | 19,711) | 28,593) | 30,824) | |
| Total debt | 20,494) | 19,273) | 20,964) | 32,350) | 35,185) | |
| Shareholders’ equity | 18,677) | 19,342) | 27,378) | 36,366) | 40,310) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 1.10 | 1.00 | 0.77 | 0.89 | 0.87 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Boeing Co. | 9.92 | — | — | — | — | |
| Caterpillar Inc. | — | 1.97 | 1.94 | 2.33 | 2.29 | |
| Eaton Corp. plc | — | 0.50 | 0.49 | 0.51 | 0.52 | |
| Honeywell International Inc. | — | 1.67 | 1.29 | 1.17 | 1.06 | |
| Lockheed Martin Corp. | 3.23 | 3.20 | 2.55 | 1.68 | 1.07 | |
| RTX Corp. | — | 0.69 | 0.73 | 0.44 | 0.43 | |
| Debt to Equity, Sector | ||||||
| Capital Goods | — | 1.54 | 1.54 | 1.33 | 1.26 | |
| Debt to Equity, Industry | ||||||
| Industrials | — | 1.39 | 1.52 | 1.42 | 1.37 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 20,494 ÷ 18,677 = 1.10
2 Click competitor name to see calculations.
The debt to equity ratio exhibits a fluctuating pattern over the five-year period. Initially, the ratio increased before declining and then rising again, indicating a shifting balance between the company’s reliance on debt versus equity financing.
- Debt to Equity Ratio - Overall Trend
- The debt to equity ratio began at 0.87 in 2021, increased to 0.89 in 2022, then decreased to 0.77 in 2023. A subsequent increase was observed in 2024, reaching parity at 1.00, and continued to rise to 1.10 in 2025. This suggests an increasing reliance on debt financing relative to equity in the later years of the observed period.
- Debt and Equity Movements
- Total debt decreased from US$35,185 million in 2021 to US$20,964 million in 2023, before modestly increasing to US$20,494 million in 2025. Shareholders’ equity experienced a more substantial decline, moving from US$40,310 million in 2021 to US$18,677 million in 2025. The combined effect of decreasing equity and fluctuating debt levels drives the observed changes in the debt to equity ratio.
The increase in the debt to equity ratio in 2024 and 2025 warrants attention. Reaching 1.10 in 2025, the ratio indicates that debt financing exceeds shareholders’ equity. This could potentially elevate financial risk, depending on the company’s ability to service its debt obligations and generate sufficient returns.
- Ratio Implications
- A rising debt to equity ratio generally suggests increased financial leverage. While leverage can amplify returns, it also magnifies potential losses. The shift towards a higher ratio in recent years may indicate a strategic decision to utilize debt for growth initiatives or a consequence of declining equity due to factors such as share repurchases or retained earnings policies.
Continued monitoring of this ratio, alongside other solvency and profitability metrics, is recommended to assess the company’s long-term financial health and sustainability.
Debt to Equity (including Operating Lease Liability)
GE Aerospace, debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 1,686) | 2,039) | 1,253) | 3,757) | 4,361) | |
| Long-term borrowings | 18,808) | 17,234) | 19,711) | 28,593) | 30,824) | |
| Total debt | 20,494) | 19,273) | 20,964) | 32,350) | 35,185) | |
| Current operating lease liabilities (included in All other current liabilities) | 280) | 283) | —) | —) | —) | |
| Non-current operating lease liabilities (included in All other liabilities) | 783) | 822) | 1,973) | 2,393) | 2,848) | |
| Total debt (including operating lease liability) | 21,557) | 20,378) | 22,937) | 34,743) | 38,033) | |
| Shareholders’ equity | 18,677) | 19,342) | 27,378) | 36,366) | 40,310) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 1.15 | 1.05 | 0.84 | 0.96 | 0.94 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 10.33 | — | — | — | — | |
| Caterpillar Inc. | — | 2.00 | 1.97 | 2.37 | 2.33 | |
| Eaton Corp. plc | — | 0.54 | 0.52 | 0.54 | 0.55 | |
| Honeywell International Inc. | — | 1.73 | 1.36 | 1.23 | 1.11 | |
| Lockheed Martin Corp. | 3.39 | 3.38 | 2.73 | 1.81 | 1.19 | |
| RTX Corp. | — | 0.72 | 0.76 | 0.47 | 0.46 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Capital Goods | — | 1.60 | 1.61 | 1.39 | 1.32 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | — | 1.55 | 1.71 | 1.59 | 1.54 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 21,557 ÷ 18,677 = 1.15
2 Click competitor name to see calculations.
The Debt to Equity ratio, including operating lease liability, demonstrates a fluctuating pattern over the five-year period. Initially, the ratio increased before declining and then rising again. Total debt decreased significantly between 2021 and 2023, while shareholders’ equity also experienced a reduction throughout the period. However, the rate of decline in equity was greater than that of debt, leading to shifts in the ratio.
- Initial Increase (2021-2022)
- The Debt to Equity ratio increased from 0.94 in 2021 to 0.96 in 2022. This coincided with a decrease in both total debt and shareholders’ equity, but equity decreased at a slightly faster rate. This suggests a marginal increase in financial leverage.
- Subsequent Decline (2022-2023)
- A notable decrease in the ratio occurred between 2022 and 2023, falling to 0.84. This was primarily driven by a more substantial reduction in total debt, which decreased from US$34,743 million to US$22,937 million, while shareholders’ equity continued to decline, albeit at a slower pace. This indicates an improvement in the company’s solvency position during this period.
- Ratio Reversal (2023-2025)
- From 2023 to 2025, the Debt to Equity ratio reversed its downward trend, increasing to 1.05 in 2024 and further to 1.15 in 2025. This increase is attributable to a continued decline in shareholders’ equity, which fell from US$27,378 million to US$18,677 million, while total debt experienced a smaller increase, rising from US$22,937 million to US$21,557 million before stabilizing. This suggests a growing reliance on debt financing relative to equity.
Shareholders’ equity experienced a consistent decline throughout the entire period, decreasing from US$40,310 million in 2021 to US$18,677 million in 2025. Total debt also decreased overall, but the timing and magnitude of the changes differed, resulting in the observed fluctuations in the Debt to Equity ratio. The increasing ratio in the later years warrants further investigation to understand the underlying causes and potential implications for the company’s financial risk.
Debt to Capital
GE Aerospace, debt to capital calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 1,686) | 2,039) | 1,253) | 3,757) | 4,361) | |
| Long-term borrowings | 18,808) | 17,234) | 19,711) | 28,593) | 30,824) | |
| Total debt | 20,494) | 19,273) | 20,964) | 32,350) | 35,185) | |
| Shareholders’ equity | 18,677) | 19,342) | 27,378) | 36,366) | 40,310) | |
| Total capital | 39,171) | 38,615) | 48,342) | 68,716) | 75,495) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.52 | 0.50 | 0.43 | 0.47 | 0.47 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Boeing Co. | 0.91 | 1.08 | 1.49 | 1.39 | 1.35 | |
| Caterpillar Inc. | — | 0.66 | 0.66 | 0.70 | 0.70 | |
| Eaton Corp. plc | — | 0.33 | 0.33 | 0.34 | 0.34 | |
| Honeywell International Inc. | — | 0.63 | 0.56 | 0.54 | 0.51 | |
| Lockheed Martin Corp. | 0.76 | 0.76 | 0.72 | 0.63 | 0.52 | |
| RTX Corp. | — | 0.41 | 0.42 | 0.31 | 0.30 | |
| Debt to Capital, Sector | ||||||
| Capital Goods | — | 0.61 | 0.61 | 0.57 | 0.56 | |
| Debt to Capital, Industry | ||||||
| Industrials | — | 0.58 | 0.60 | 0.59 | 0.58 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= 20,494 ÷ 39,171 = 0.52
2 Click competitor name to see calculations.
The Debt to Capital ratio exhibits a fluctuating pattern over the five-year period. Initially, the ratio remained stable, followed by a decrease and subsequent increase.
- Overall Trend
- The Debt to Capital ratio began at 0.47 in 2021 and remained at the same level in 2022. A decreasing trend was then observed in 2023, with the ratio falling to 0.43. This was followed by increases in both 2024 and 2025, reaching 0.50 and 0.52 respectively.
- Year-over-Year Changes
- From 2021 to 2022, the ratio remained unchanged. A decrease of 0.04 was recorded from 2022 to 2023. Subsequently, the ratio increased by 0.07 from 2023 to 2024, and by an additional 0.02 from 2024 to 2025.
- Ratio Interpretation
- The ratio indicates the proportion of debt financing relative to total capital. A ratio of 0.52 in 2025 suggests that 52% of the company’s capital is financed by debt. The initial stability at 0.47 suggests a consistent capital structure. The subsequent rise in the ratio indicates an increasing reliance on debt financing.
- Underlying Values
- Total debt decreased from US$35,185 million in 2021 to US$20,964 million in 2023, contributing to the initial decline in the Debt to Capital ratio. However, while still decreasing, the rate of debt reduction slowed, and debt slightly increased in 2025. Total capital also decreased over the period, but at a slower rate than debt until 2024, which then stabilized. The combined effect of these changes resulted in the observed ratio fluctuations.
Debt to Capital (including Operating Lease Liability)
GE Aerospace, debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 1,686) | 2,039) | 1,253) | 3,757) | 4,361) | |
| Long-term borrowings | 18,808) | 17,234) | 19,711) | 28,593) | 30,824) | |
| Total debt | 20,494) | 19,273) | 20,964) | 32,350) | 35,185) | |
| Current operating lease liabilities (included in All other current liabilities) | 280) | 283) | —) | —) | —) | |
| Non-current operating lease liabilities (included in All other liabilities) | 783) | 822) | 1,973) | 2,393) | 2,848) | |
| Total debt (including operating lease liability) | 21,557) | 20,378) | 22,937) | 34,743) | 38,033) | |
| Shareholders’ equity | 18,677) | 19,342) | 27,378) | 36,366) | 40,310) | |
| Total capital (including operating lease liability) | 40,234) | 39,720) | 50,315) | 71,109) | 78,343) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.54 | 0.51 | 0.46 | 0.49 | 0.49 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 0.91 | 1.08 | 1.47 | 1.37 | 1.34 | |
| Caterpillar Inc. | — | 0.67 | 0.66 | 0.70 | 0.70 | |
| Eaton Corp. plc | — | 0.35 | 0.34 | 0.35 | 0.36 | |
| Honeywell International Inc. | — | 0.63 | 0.58 | 0.55 | 0.53 | |
| Lockheed Martin Corp. | 0.77 | 0.77 | 0.73 | 0.64 | 0.54 | |
| RTX Corp. | — | 0.42 | 0.43 | 0.32 | 0.31 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Capital Goods | — | 0.62 | 0.62 | 0.58 | 0.57 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | — | 0.61 | 0.63 | 0.61 | 0.61 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 21,557 ÷ 40,234 = 0.54
2 Click competitor name to see calculations.
The Debt to Capital ratio, inclusive of operating lease liabilities, demonstrates a fluctuating pattern over the five-year period. Initially, the ratio remained stable before exhibiting an increasing trend towards the end of the analyzed timeframe.
- Debt to Capital Ratio Trend
- In 2021 and 2022, the Debt to Capital ratio held steady at 0.49. This indicates a consistent capital structure regarding debt financing during these years. A subsequent decrease was observed in 2023, with the ratio falling to 0.46. This suggests a reduction in relative debt levels compared to capital. However, the ratio increased to 0.51 in 2024, and further to 0.54 in 2025, signaling a growing reliance on debt financing relative to the capital base.
The absolute values of both Total Debt and Total Capital decreased from 2021 to 2024, but the rate of decrease in Total Capital was more pronounced, contributing to the increase in the Debt to Capital ratio in 2024 and 2025. Total Debt experienced a slight increase between 2024 and 2025, while Total Capital remained relatively stable, further driving the ratio upward.
- Total Debt and Capital Changes
- Total debt decreased significantly from US$38,033 million in 2021 to US$20,378 million in 2024, before experiencing a modest increase to US$21,557 million in 2025. Total capital also decreased, moving from US$78,343 million in 2021 to US$39,720 million in 2024, and then showing minimal change at US$40,234 million in 2025. The convergence of these trends, particularly the stabilization of capital and the slight increase in debt, explains the observed increase in the Debt to Capital ratio in the later years.
The increasing Debt to Capital ratio in the final two years of the period warrants attention, as it indicates a potentially higher level of financial risk. Continued monitoring of this ratio is recommended to assess the sustainability of the capital structure.
Debt to Assets
GE Aerospace, debt to assets calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 1,686) | 2,039) | 1,253) | 3,757) | 4,361) | |
| Long-term borrowings | 18,808) | 17,234) | 19,711) | 28,593) | 30,824) | |
| Total debt | 20,494) | 19,273) | 20,964) | 32,350) | 35,185) | |
| Total assets | 130,169) | 123,140) | 163,045) | 187,788) | 198,874) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.16 | 0.16 | 0.13 | 0.17 | 0.18 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Boeing Co. | 0.32 | 0.34 | 0.38 | 0.42 | 0.42 | |
| Caterpillar Inc. | — | 0.44 | 0.43 | 0.45 | 0.46 | |
| Eaton Corp. plc | — | 0.24 | 0.24 | 0.25 | 0.25 | |
| Honeywell International Inc. | — | 0.41 | 0.33 | 0.31 | 0.30 | |
| Lockheed Martin Corp. | 0.36 | 0.36 | 0.33 | 0.29 | 0.23 | |
| RTX Corp. | — | 0.25 | 0.27 | 0.20 | 0.20 | |
| Debt to Assets, Sector | ||||||
| Capital Goods | — | 0.31 | 0.29 | 0.28 | 0.28 | |
| Debt to Assets, Industry | ||||||
| Industrials | — | 0.31 | 0.31 | 0.31 | 0.30 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= 20,494 ÷ 130,169 = 0.16
2 Click competitor name to see calculations.
The Debt-to-Assets ratio demonstrates a generally decreasing trend over the observed period, followed by a stabilization in the most recent two years. This indicates a shifting capital structure and potentially reduced financial risk, although recent developments warrant further scrutiny.
- Overall Trend
- From 2021 to 2023, the Debt-to-Assets ratio experienced a consistent decline. This suggests a reduction in the proportion of assets financed by debt, which could be attributed to debt repayment, asset growth outpacing debt accumulation, or a combination of both. The ratio decreased from 0.18 in 2021 to 0.13 in 2023.
- Recent Developments
- In 2024, the ratio increased to 0.16, reversing the prior downward trend. This increase suggests a renewed reliance on debt financing or a decrease in the asset base. The ratio remained stable at 0.16 in 2025, indicating that the change observed in 2024 was not a temporary fluctuation, but rather a potential shift in the company’s financial strategy or operating conditions.
- Debt and Asset Movements
- Total debt decreased significantly from 2021 to 2023, falling from US$35,185 million to US$20,964 million. However, debt levels have shown modest increases in the last two years, reaching US$20,494 million in 2025. Total assets experienced a more substantial decline, decreasing from US$198,874 million in 2021 to US$123,140 million in 2024, before a slight recovery to US$130,169 million in 2025. The interplay between these movements explains the observed ratio fluctuations.
The stabilization of the Debt-to-Assets ratio at 0.16 in the latest two years suggests a potential new equilibrium in the company’s capital structure. Continued monitoring is recommended to determine if this level is sustainable and aligned with the company’s long-term financial goals.
Debt to Assets (including Operating Lease Liability)
GE Aerospace, debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings | 1,686) | 2,039) | 1,253) | 3,757) | 4,361) | |
| Long-term borrowings | 18,808) | 17,234) | 19,711) | 28,593) | 30,824) | |
| Total debt | 20,494) | 19,273) | 20,964) | 32,350) | 35,185) | |
| Current operating lease liabilities (included in All other current liabilities) | 280) | 283) | —) | —) | —) | |
| Non-current operating lease liabilities (included in All other liabilities) | 783) | 822) | 1,973) | 2,393) | 2,848) | |
| Total debt (including operating lease liability) | 21,557) | 20,378) | 22,937) | 34,743) | 38,033) | |
| Total assets | 130,169) | 123,140) | 163,045) | 187,788) | 198,874) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.17 | 0.17 | 0.14 | 0.19 | 0.19 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 0.34 | 0.36 | 0.40 | 0.43 | 0.43 | |
| Caterpillar Inc. | — | 0.44 | 0.44 | 0.46 | 0.46 | |
| Eaton Corp. plc | — | 0.26 | 0.26 | 0.26 | 0.27 | |
| Honeywell International Inc. | — | 0.43 | 0.35 | 0.33 | 0.32 | |
| Lockheed Martin Corp. | 0.38 | 0.39 | 0.36 | 0.32 | 0.26 | |
| RTX Corp. | — | 0.27 | 0.28 | 0.21 | 0.21 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Capital Goods | — | 0.32 | 0.30 | 0.30 | 0.29 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | — | 0.35 | 0.35 | 0.34 | 0.34 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 21,557 ÷ 130,169 = 0.17
2 Click competitor name to see calculations.
The Debt to Assets ratio, including operating lease liability, demonstrates a fluctuating pattern over the five-year period. Initially, the ratio remained stable before exhibiting a notable decline, followed by a period of stabilization.
- Overall Trend
- From 2021 to 2023, a consistent decrease in the Debt to Assets ratio is observed. This indicates a diminishing proportion of assets financed by debt. However, from 2023 to 2025, the ratio stabilizes, suggesting a potential leveling off of debt reduction efforts or a shift in financing strategy.
- Detailed Ratio Analysis
- In 2021 and 2022, the Debt to Assets ratio remained constant at 0.19. This suggests a consistent capital structure during these years. A significant decrease is then seen in 2023, with the ratio falling to 0.14. This represents a substantial reduction in leverage. The ratio then increased slightly to 0.17 in both 2024 and 2025, indicating a modest increase in debt relative to assets, but remaining below the levels observed in 2021 and 2022.
- Underlying Components
- Total debt, including operating lease liability, decreased from US$38,033 million in 2021 to US$22,937 million in 2023, contributing to the initial decline in the ratio. While debt increased slightly to US$21,557 million by 2025, total assets experienced a more substantial decrease from US$198,874 million in 2021 to US$163,045 million in 2023, before a partial recovery to US$130,169 million in 2025. The combined effect of these movements explains the observed trend in the Debt to Assets ratio.
The stabilization of the ratio in the latter years suggests a potential deliberate choice to maintain a certain level of debt financing, despite the continued fluctuation in asset values.
Financial Leverage
GE Aerospace, financial leverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 130,169) | 123,140) | 163,045) | 187,788) | 198,874) | |
| Shareholders’ equity | 18,677) | 19,342) | 27,378) | 36,366) | 40,310) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 6.97 | 6.37 | 5.96 | 5.16 | 4.93 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Boeing Co. | 30.85 | — | — | — | — | |
| Caterpillar Inc. | — | 4.50 | 4.49 | 5.16 | 5.02 | |
| Eaton Corp. plc | — | 2.08 | 2.02 | 2.06 | 2.07 | |
| Honeywell International Inc. | — | 4.04 | 3.88 | 3.73 | 3.47 | |
| Lockheed Martin Corp. | 8.90 | 8.78 | 7.67 | 5.71 | 4.64 | |
| RTX Corp. | — | 2.71 | 2.71 | 2.19 | 2.21 | |
| Financial Leverage, Sector | ||||||
| Capital Goods | — | 5.05 | 5.35 | 4.71 | 4.55 | |
| Financial Leverage, Industry | ||||||
| Industrials | — | 4.49 | 4.94 | 4.65 | 4.52 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 130,169 ÷ 18,677 = 6.97
2 Click competitor name to see calculations.
An examination of the provided financial information reveals a consistent increase in financial leverage over the five-year period from 2021 to 2025. This trend is accompanied by a decrease in total assets and shareholders’ equity.
- Financial Leverage
- The financial leverage ratio demonstrates a clear upward trajectory, rising from 4.93 in 2021 to 6.97 in 2025. This indicates a growing reliance on debt financing relative to equity. The increase is not linear, with slightly smaller increases between 2021 and 2022, and 2024 and 2025, but the overall trend remains consistently positive.
Concurrent with the increasing financial leverage, total assets experienced a decline from US$198,874 million in 2021 to US$123,140 million in 2024, before a modest increase to US$130,169 million in 2025. This suggests a potential contraction of the company’s asset base, followed by a stabilization.
- Shareholders’ Equity
- Shareholders’ equity also exhibited a consistent downward trend, decreasing from US$40,310 million in 2021 to US$18,677 million in 2025. This decline, combined with the increasing financial leverage, suggests that the company is funding a decreasing equity base with a greater proportion of debt.
The combined effect of rising financial leverage and declining shareholders’ equity suggests an increasing risk profile. While a certain level of financial leverage can be beneficial, the observed trend warrants further investigation into the company’s debt structure, interest coverage ratios, and overall ability to meet its financial obligations.
Interest Coverage
GE Aerospace, interest coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to the Company | 8,704) | 6,556) | 9,481) | 225) | (6,520) | |
| Add: Net income attributable to noncontrolling interest | (6) | 10) | (38) | 67) | (71) | |
| Less: Income (loss) from discontinued operations, net of taxes | 103) | (91) | 414) | (644) | (3,195) | |
| Add: Income tax expense | 1,405) | 963) | 1,162) | 476) | (287) | |
| Add: Interest and other financial charges | 843) | 986) | 1,118) | 1,607) | 1,876) | |
| Earnings before interest and tax (EBIT) | 10,843) | 8,606) | 11,309) | 3,019) | (1,807) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 12.86 | 8.73 | 10.12 | 1.88 | -0.96 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Boeing Co. | 1.95 | -3.48 | 0.18 | -0.98 | -0.88 | |
| Caterpillar Inc. | — | 27.21 | 26.66 | 20.80 | 17.88 | |
| Eaton Corp. plc | — | 36.12 | 26.34 | 21.22 | 21.11 | |
| Honeywell International Inc. | — | 7.82 | 10.36 | 16.41 | 22.09 | |
| Lockheed Martin Corp. | 6.30 | 7.00 | 9.84 | 11.72 | 14.27 | |
| RTX Corp. | — | 4.14 | 3.32 | 5.64 | 4.71 | |
| Interest Coverage, Sector | ||||||
| Capital Goods | — | 4.92 | 6.84 | 4.84 | 3.98 | |
| Interest Coverage, Industry | ||||||
| Industrials | — | 5.79 | 6.64 | 4.98 | 5.14 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Interest coverage = EBIT ÷ Interest expense
= 10,843 ÷ 843 = 12.86
2 Click competitor name to see calculations.
The period under review demonstrates a significant improvement in interest coverage. Initially, the company exhibited an inability to comfortably meet its interest obligations, but subsequent years show a strengthening capacity to do so.
- Earnings before interest and tax (EBIT)
- EBIT was negative in 2021, at -US$1,807 million. A substantial positive shift occurred in 2022, with EBIT reaching US$3,019 million. Continued growth was observed through 2023, peaking at US$11,309 million, before decreasing slightly to US$8,606 million in 2024. EBIT experienced further growth in 2025, reaching US$10,843 million. This indicates a strengthening operational profitability over the period.
- Interest and other financial charges
- Interest expense decreased consistently throughout the period. Starting at US$1,876 million in 2021, it declined to US$1,607 million in 2022, and continued to fall to US$1,118 million in 2023. This downward trend persisted, reaching US$986 million in 2024 and US$843 million in 2025. This suggests either successful debt reduction, refinancing at lower rates, or a combination of both.
- Interest coverage
- The interest coverage ratio mirrored the trends in EBIT and interest expense. In 2021, the ratio was negative at -0.96, indicating that earnings were insufficient to cover interest obligations. A positive ratio of 1.88 was achieved in 2022, signifying an improved ability to meet interest payments. Substantial increases followed, with the ratio reaching 10.12 in 2023, 8.73 in 2024, and peaking at 12.86 in 2025. These values suggest a robust and increasing capacity to cover interest expenses with earnings, indicating a strong solvency position towards the end of the analyzed period.
The combined effect of increasing earnings and decreasing interest expense has resulted in a dramatic improvement in the company’s ability to service its debt. The trend suggests a decreasing risk of financial distress related to debt obligations.
Fixed Charge Coverage
GE Aerospace, fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| U.S. federal statutory income tax rate | 21.00% | 21.00% | 21.00% | 21.00% | 21.00% | |
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to the Company | 8,704) | 6,556) | 9,481) | 225) | (6,520) | |
| Add: Net income attributable to noncontrolling interest | (6) | 10) | (38) | 67) | (71) | |
| Less: Income (loss) from discontinued operations, net of taxes | 103) | (91) | 414) | (644) | (3,195) | |
| Add: Income tax expense | 1,405) | 963) | 1,162) | 476) | (287) | |
| Add: Interest and other financial charges | 843) | 986) | 1,118) | 1,607) | 1,876) | |
| Earnings before interest and tax (EBIT) | 10,843) | 8,606) | 11,309) | 3,019) | (1,807) | |
| Add: Operating lease expense | 385) | 482) | 820) | 1,055) | 1,081) | |
| Earnings before fixed charges and tax | 11,228) | 9,088) | 12,129) | 4,074) | (726) | |
| Interest and other financial charges | 843) | 986) | 1,118) | 1,607) | 1,876) | |
| Operating lease expense | 385) | 482) | 820) | 1,055) | 1,081) | |
| Preferred stock dividends and other | —) | —) | 295) | 289) | 237) | |
| Preferred stock dividends and other, tax adjustment1 | —) | —) | 78) | 77) | 63) | |
| Preferred stock dividends and other, after tax adjustment | —) | —) | 373) | 366) | 300) | |
| Fixed charges | 1,228) | 1,468) | 2,311) | 3,028) | 3,257) | |
| Solvency Ratio | ||||||
| Fixed charge coverage2 | 9.14 | 6.19 | 5.25 | 1.35 | -0.22 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors3 | ||||||
| Boeing Co. | 1.58 | -2.69 | 0.31 | -0.70 | -0.64 | |
| Caterpillar Inc. | — | 20.25 | 19.73 | 14.92 | 12.73 | |
| Eaton Corp. plc | — | 13.79 | 11.90 | 10.01 | 10.40 | |
| Honeywell International Inc. | — | 6.44 | 8.13 | 11.00 | 13.67 | |
| Lockheed Martin Corp. | 5.30 | 5.80 | 7.81 | 8.44 | 9.95 | |
| RTX Corp. | — | 3.59 | 2.81 | 4.40 | 3.66 | |
| Fixed Charge Coverage, Sector | ||||||
| Capital Goods | — | 4.03 | 5.14 | 3.61 | 3.06 | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | — | 3.96 | 4.32 | 3.30 | 3.44 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Preferred stock dividends and other, tax adjustment = (Preferred stock dividends and other × U.S. federal statutory income tax rate) ÷ (1 − U.S. federal statutory income tax rate)
= (0 × 21.00%) ÷ (1 − 21.00%) = 0
2 2025 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 11,228 ÷ 1,228 = 9.14
3 Click competitor name to see calculations.
The company demonstrates a significant improvement in its fixed charge coverage over the five-year period. Initially, the company struggled to cover its fixed charges, but subsequent years show a strengthening ability to meet these obligations.
- Earnings Before Fixed Charges and Tax
- Earnings before fixed charges and tax experienced substantial volatility. A considerable loss of US$726 million was recorded in 2021. This was followed by a strong recovery to US$4,074 million in 2022, and further growth to US$12,129 million in 2023. A slight decrease to US$9,088 million occurred in 2024, before increasing again to US$11,228 million in 2025. This indicates improving operational performance and profitability, though with some fluctuation.
- Fixed Charges
- Fixed charges exhibited a decreasing trend throughout the period. Beginning at US$3,257 million in 2021, they declined to US$3,028 million in 2022, and continued to fall to US$2,311 million in 2023. This downward trend persisted, reaching US$1,468 million in 2024 and US$1,228 million in 2025. This suggests a reduction in obligations related to items like lease payments and pension costs, or potentially debt repayment.
- Fixed Charge Coverage
- The fixed charge coverage ratio reflects the company’s capacity to meet its fixed financial obligations. In 2021, the ratio was negative (-0.22), indicating an inability to cover fixed charges with available earnings. A substantial improvement was observed in 2022, with the ratio rising to 1.35. This positive trend continued, with the ratio increasing to 5.25 in 2023, 6.19 in 2024, and reaching 9.14 in 2025. The increasing ratio demonstrates a progressively stronger ability to comfortably cover fixed charges with earnings, suggesting improved financial health and reduced risk of default.
The combined effect of increasing earnings before fixed charges and tax, and decreasing fixed charges, has resulted in a dramatic improvement in the fixed charge coverage ratio. The company has transitioned from a position of not being able to cover its fixed obligations to a position of substantial coverage.