Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
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Profitability Ratios (Summary)
GE Aerospace, profitability ratios
Based on: 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), 10-K (reporting date: 2020-12-31).
The financial data indicates evolving profitability and efficiency trends over the five-year period. The gross profit margin demonstrates a general upward trajectory, starting at 17.26% in 2020 and reaching a peak of 30.79% in 2024, despite a slight decrease observed in 2023. This suggests improved cost management or pricing strategies leading to higher profitability at the gross level.
Operating profit margin follows a similar positive pattern with some fluctuations. The margin rose from 5.49% in 2020 to 8.58% in 2021, dipped to 6.05% in 2022, then increased to 8.49% in 2023 and surged significantly to 23.29% in 2024. The marked increase in the latest year indicates enhanced operational efficiency or reduced operating expenses relative to revenues.
The net profit margin reveals considerable volatility during the period. It started at a moderate 7.81% in 2020, fell sharply into negative territory at -9.17% in 2021, and rebounded slowly with a marginal positive margin of 0.31% in 2022. Subsequently, it improved considerably, reaching 14.68% in 2023 and 18.67% in 2024, indicating a recovery in overall profitability after a challenging year.
Return on equity (ROE) shows pronounced fluctuations. Beginning at 16.04% in 2020, it dropped sharply to -16.17% in 2021, closely mirroring the net profit margin trend. From there, ROE improved to a marginal 0.62% in 2022, then demonstrated strong growth to 34.63% in 2023 and slightly declined but remained robust at 33.9% in 2024. This suggests the company restored and enhanced its ability to generate returns for shareholders after initial losses.
The return on assets (ROA) follows a similar pattern to ROE but at lower levels. ROA started at 2.25% in 2020, dipped to -3.28% in 2021, recovered marginally to 0.12% in 2022, and improved to 5.81% in 2023 before moderating slightly to 5.32% in 2024. This indicates a recovery and subsequent stabilization in asset utilization efficiency after the downturn in 2021.
- Gross profit margin
- Consistent upward trend with minor fluctuation in 2023 followed by a strong increase in 2024.
- Operating profit margin
- Fluctuated but ultimately increased significantly by 2024, indicating improved operational control.
- Net profit margin
- Experienced severe decline in 2021 with recovery and strong growth through 2024.
- Return on equity (ROE)
- Mirrors net profit margin fluctuations with significant recovery and strong returns after 2021.
- Return on assets (ROA)
- Declined in 2021, then stabilized and improved moderately, reflecting better asset efficiency post-2021.
Return on Sales
Return on Investment
Gross Profit Margin
GE Aerospace, gross profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit from sales | ||||||
| Sales of equipment and services | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Gross profit margin = 100 × Gross profit from sales ÷ Sales of equipment and services
= 100 × ÷ =
2 Click competitor name to see calculations.
- Gross Profit from Sales
- The gross profit from sales increased from 12,601 million US dollars in 2020 to a peak of 18,067 million in 2022. Following this peak, there was a decline to 14,173 million in 2023 and a further decrease to 10,813 million in 2024. This indicates a rising trend in gross profit initially, with a marked downturn in the last two years.
- Sales of Equipment and Services
- Sales of equipment and services showed a fluctuating pattern. The figure started at 73,022 million US dollars in 2020, slightly decreased to 71,090 million in 2021, then rose to 73,602 million in 2022. This was followed by a significant decline to 64,565 million in 2023, and an even sharper drop to 35,121 million in 2024. The overall trend is a notable reduction in sales over the last two years.
- Gross Profit Margin
- The gross profit margin experienced variability over the observed period. It increased significantly from 17.26% in 2020 to 24.19% in 2021, then edged slightly higher to 24.55% in 2022. A decline to 21.95% occurred in 2023, followed by a substantial increase to 30.79% in 2024. This suggests improvement in profitability relative to sales in the final year despite declining absolute sales and gross profit values.
- Overall Insights
- The data reflects an initial period of growth in gross profit and sales through 2022, followed by a downturn in absolute values for both gross profit and sales in 2023 and 2024. Despite reductions in gross profit and sales volumes, the gross profit margin improved sharply in 2024, implying enhanced cost control or pricing strategies leading to better profitability per unit of sales. The divergence between declining sales and increasing profit margin in 2024 should be further analyzed to determine the underlying drivers.
Operating Profit Margin
GE Aerospace, operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating earnings | ||||||
| Sales of equipment and services | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Operating Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Operating Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating profit margin = 100 × Operating earnings ÷ Sales of equipment and services
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals notable fluctuations and trends in the key performance indicators over the five-year period.
- Operating earnings
- Operating earnings exhibited variability, starting from US$ 4,012 million in 2020 and rising significantly to 6,096 million in 2021. This was followed by a decline to 4,454 million in 2022, then an increase again in 2023 to 5,482 million, and a substantial jump to 8,179 million in 2024. Overall, there is an upward trend with pronounced growth in the most recent year.
- Sales of equipment and services
- Sales showed a generally declining trajectory over the period. Beginning at US$ 73,022 million in 2020, sales slightly dropped to 71,090 million in 2021 but rose again to 73,602 million in 2022. However, after 2022, sales descended sharply to 64,565 million in 2023 and then almost halved to 35,121 million in 2024. This significant reduction in sales contrasts with the rise in operating earnings in the latest year.
- Operating profit margin
- The operating profit margin fluctuated considerably, with initial values of 5.49% in 2020 and improving to 8.58% in 2021. It then decreased to 6.05% in 2022 before recovering to 8.49% in 2023. A remarkable increase to 23.29% was observed in 2024, indicating a substantial improvement in profitability relative to sales.
In summary, despite experiencing a significant decline in sales in the final years, operating earnings have increased, particularly in 2024. This was accompanied by a sharp rise in the operating profit margin, suggesting improved cost efficiency, pricing strategies, or changes in the sales mix contributing to enhanced profitability. The divergence between declining sales and rising operating earnings and margins warrants further investigation into operational factors and strategic shifts impacting financial performance.
Net Profit Margin
GE Aerospace, net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings (loss) attributable to the Company | ||||||
| Sales of equipment and services | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Net Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Net Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net profit margin = 100 × Net earnings (loss) attributable to the Company ÷ Sales of equipment and services
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings (Loss) Attributable to the Company
- The net earnings display notable volatility over the period. Initially, the company achieved strong profitability in 2020 with net earnings of 5704 million US dollars. However, 2021 saw a significant decline, resulting in a net loss of 6520 million US dollars. Recovery is evident from 2022 onwards, with modest positive earnings of 225 million, followed by a substantial increase to 9481 million in 2023. This upward trend moderated slightly in 2024, with earnings amounting to 6556 million. Overall, the net earnings pattern indicates a recovery phase post-2021 losses, with considerable fluctuations likely influenced by external or operational factors.
- Sales of Equipment and Services
- Sales figures demonstrate a general decline across the five-year span. Starting from 73022 million US dollars in 2020, sales decreased slightly to 71090 million in 2021, followed by a brief increase in 2022 to 73602 million. Thereafter, a marked downward trend occurred, with sales falling to 64565 million in 2023 and experiencing a sharp drop to 35121 million in 2024. This consistent reduction, particularly the steep decrease in the final year, may indicate challenges in market demand, supply chain issues, or strategic shifts affecting revenue generation.
- Net Profit Margin
- The net profit margin reflects significant variability corresponding with net earnings trends. In 2020, the margin was positive at 7.81%, but it shifted to a negative margin of -9.17% in 2021, consistent with the reported net loss. The margin recovered slightly in 2022 to 0.31%, before improving markedly to 14.68% in 2023. The margin peaked at 18.67% in 2024, indicating enhanced profitability relative to sales despite the decline in sales volume. This improvement in profit margin, despite falling sales, suggests possible cost efficiencies or better pricing strategies during the latter years.
Return on Equity (ROE)
GE Aerospace, ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings (loss) attributable to the Company | ||||||
| Shareholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| ROE, Sector | ||||||
| Capital Goods | ||||||
| ROE, Industry | ||||||
| Industrials | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROE = 100 × Net earnings (loss) attributable to the Company ÷ Shareholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings (Loss) Attributable to the Company
- The net earnings demonstrated considerable volatility over the analyzed period. Starting with a positive figure of 5,704 million USD at the end of 2020, the company experienced a substantial loss of 6,520 million USD in 2021. This was followed by a recovery to a modest profit of 225 million USD in 2022. A significant upturn occurred in 2023, with net earnings reaching 9,481 million USD, before declining again to 6,556 million USD in 2024. The data indicates a high level of fluctuation in profitability, with notable recovery after 2021 losses and strong earnings in subsequent years.
- Shareholders’ Equity
- Shareholders' equity exhibited a decreasing trend after an initial increase. It increased from 35,552 million USD in 2020 to 40,310 million USD in 2021, but then declined consistently over the next three years, falling to 36,366 million USD in 2022, 27,378 million USD in 2023, and further down to 19,342 million USD in 2024. This downward movement suggests that equity erosion has been ongoing since 2021 despite variations in net earnings.
- Return on Equity (ROE)
- ROE reflects the patterns observed in net earnings and equity changes. The ratio started at a healthy 16.04% in 2020 but dropped sharply to -16.17% in 2021, aligning with the net loss reported that year. It then recovered to a marginally positive 0.62% in 2022. A substantial increase occurred in 2023 and 2024, with ROE reaching 34.63% and 33.9%, respectively, indicating improved profitability relative to shareholders' equity despite the decline in equity value. The high ROE in the last two years reflects a combination of strong net earnings and reduced equity base.
Return on Assets (ROA)
GE Aerospace, ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings (loss) attributable to the Company | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| ROA, Sector | ||||||
| Capital Goods | ||||||
| ROA, Industry | ||||||
| Industrials | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROA = 100 × Net earnings (loss) attributable to the Company ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data indicates significant volatility in net earnings attributable to the company over the five-year period. After a positive net earnings figure of 5,704 million US dollars in 2020, the company experienced a sharp loss of 6,520 million US dollars in 2021. Thereafter, net earnings modestly recovered to 225 million in 2022, followed by a substantial increase to 9,481 million in 2023. The value then slightly decreased to 6,556 million in 2024, remaining considerably above the early years.
Total assets demonstrated a consistent downward trend throughout the period. Starting at 253,452 million US dollars in 2020, the asset base declined annually, reaching 123,140 million by the end of 2024. This represents a cumulative reduction of more than 50% over the five years, indicating a notable contraction in asset size.
The Return on Assets (ROA) percentage reflects the profitability relative to the asset base, also showing significant fluctuations. The ROA was positive at 2.25% in 2020 but turned negative to -3.28% in 2021, mirroring the net earnings loss in that year. Subsequently, the ROA slightly recovered to 0.12% in 2022 and then improved substantially to 5.81% in 2023. In 2024, the ROA slightly decreased to 5.32%, remaining at a relatively strong level compared to earlier years.
- Summary of Trends and Insights
-
- Net earnings experienced high volatility, with a sharp loss in 2021 disrupting an otherwise positive earnings pattern.
- Asset levels declined steadily, suggesting asset disposals, devaluation, or strategic downsizing over time.
- Profitability as measured by ROA fluctuated in line with net earnings, with a negative impact in 2021 and a robust recovery thereafter.
- The strong earnings and ROA performance in 2023 and 2024, despite declining asset levels, implies enhanced asset utilization efficiency or improved operational performance during those years.