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General Electric Co. (GE)

Profitability Analysis

Difficulty: Beginner

Profitability ratios measure the company’s ability to generate profitable sales from its resources (assets).

Ratios (Summary)
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return on Equity (ROE)
Return on Assets (ROA)

Ratios (Summary)

General Electric Co., profitability ratios

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Return on Sales
	Gross profit margin
	Operating profit margin
	Net profit margin
	Return on Investment
	Return on equity (ROE)
	Return on assets (ROA)

Based on: 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-27).

Ratio	Description	The company
Gross profit margin	Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures.	General Electric Co.’s gross profit margin deteriorated from 2016 to 2017 and from 2017 to 2018.
Operating profit margin	A profitability ratio calculated as operating income divided by revenue.	General Electric Co.’s operating profit margin deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.
Net profit margin	An indicator of profitability, calculated as net income divided by revenue.	General Electric Co.’s net profit margin deteriorated from 2016 to 2017 and from 2017 to 2018.

Ratio	Description	The company
ROE	A profitability ratio calculated as net income divided by shareholders’ equity.	General Electric Co.’s ROE deteriorated from 2016 to 2017 and from 2017 to 2018.
ROA	A profitability ratio calculated as net income divided by total assets.	General Electric Co.’s ROA deteriorated from 2016 to 2017 and from 2017 to 2018.

Gross Profit Margin

General Electric Co., gross profit margin calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data (USD $ in millions)
	Gross profit from sales
	Sales of goods and services
	Ratio
	Gross profit margin¹
	Benchmarks
	Gross Profit Margin, Competitors
	3M Co.
	Danaher Corp.
	Honeywell International Inc.

Based on: 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-27).

2018 Calculations

¹ Gross profit margin = 100 × Gross profit from sales ÷ Sales of goods and services
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Gross profit margin	Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures.	General Electric Co.’s gross profit margin deteriorated from 2016 to 2017 and from 2017 to 2018.

Operating Profit Margin

General Electric Co., operating profit margin calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data (USD $ in millions)
	Operating earnings
	Sales of goods and services
	Ratio
	Operating profit margin¹
	Benchmarks
	Operating Profit Margin, Competitors
	3M Co.
	Danaher Corp.
	Honeywell International Inc.
	Operating Profit Margin, Sector
	General Industrials
	Operating Profit Margin, Industry
	Industrials

Based on: 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-27).

2018 Calculations

¹ Operating profit margin = 100 × Operating earnings ÷ Sales of goods and services
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Operating profit margin	A profitability ratio calculated as operating income divided by revenue.	General Electric Co.’s operating profit margin deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Net Profit Margin

General Electric Co., net profit margin calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data (USD $ in millions)
	Net earnings (loss) attributable to the Company
	Sales of goods and services
	Ratio
	Net profit margin¹
	Benchmarks
	Net Profit Margin, Competitors
	3M Co.
	Danaher Corp.
	Honeywell International Inc.
	Net Profit Margin, Sector
	General Industrials
	Net Profit Margin, Industry
	Industrials

Based on: 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-27).

2018 Calculations

¹ Net profit margin = 100 × Net earnings (loss) attributable to the Company ÷ Sales of goods and services
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Net profit margin	An indicator of profitability, calculated as net income divided by revenue.	General Electric Co.’s net profit margin deteriorated from 2016 to 2017 and from 2017 to 2018.

Return on Equity (ROE)

General Electric Co., ROE calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data (USD $ in millions)
	Net earnings (loss) attributable to the Company
	Total GE shareowners’ equity
	Ratio
	ROE¹
	Benchmarks
	ROE, Competitors
	3M Co.
	Danaher Corp.
	Honeywell International Inc.
	ROE, Sector
	General Industrials
	ROE, Industry
	Industrials

Based on: 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-27).

2018 Calculations

¹ ROE = 100 × Net earnings (loss) attributable to the Company ÷ Total GE shareowners’ equity
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
ROE	A profitability ratio calculated as net income divided by shareholders’ equity.	General Electric Co.’s ROE deteriorated from 2016 to 2017 and from 2017 to 2018.

Return on Assets (ROA)

General Electric Co., ROA calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data (USD $ in millions)
	Net earnings (loss) attributable to the Company
	Total assets
	Ratio
	ROA¹
	Benchmarks
	ROA, Competitors
	3M Co.
	Danaher Corp.
	Honeywell International Inc.
	ROA, Sector
	General Industrials
	ROA, Industry
	Industrials

Based on: 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-27).

2018 Calculations

¹ ROA = 100 × Net earnings (loss) attributable to the Company ÷ Total assets
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
ROA	A profitability ratio calculated as net income divided by total assets.	General Electric Co.’s ROA deteriorated from 2016 to 2017 and from 2017 to 2018.

	General Electric Co.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality