GE Aerospace (GE)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 0.52 | 1.24 | 1.00 | 0.78 | 4.81 |
| Receivables turnover | 4.15 | 4.06 | 3.92 | 4.75 | 4.54 |
| Payables turnover | 0.65 | 1.37 | 1.19 | 1.12 | — |
| Working capital turnover | 11.93 | 3.38 | 6.49 | 5.15 | 2.51 |
Based on the provided data, we can observe the following trends in GE Aerospace's activity ratios:
1. Inventory Turnover:
- The inventory turnover ratio declined significantly from 4.81 in 2020 to 0.78 in 2021 but showed a slight improvement in the following years. A low inventory turnover may indicate inefficiency in managing inventory levels or potential issues with sales.
2. Receivables Turnover:
- The receivables turnover ratio remained relatively stable over the years, ranging from 3.92 to 4.75. This suggests that GE Aerospace has been effectively collecting payments from customers on credit sales.
3. Payables Turnover:
- The payables turnover ratio was not available for 2020 but ranged from 0.65 to 1.37 in the subsequent years. A higher payables turnover ratio indicates that the company is taking longer to pay its suppliers, which may impact relationships with vendors.
4. Working Capital Turnover:
- The working capital turnover ratio showed a fluctuating pattern, increasing from 2.51 in 2020 to 11.93 in 2024. A higher working capital turnover ratio indicates that GE Aerospace is generating more revenue relative to its working capital, reflecting efficient use of resources.
In summary, while the inventory turnover ratio experienced a significant decline initially, the stability in receivables turnover and fluctuation in payables turnover suggest a need for closer scrutiny of working capital management practices at GE Aerospace. The increasing trend in working capital turnover indicates improving efficiency in utilizing working capital to drive revenue growth.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 695.32 | 293.82 | 365.42 | 468.88 | 75.93 |
| Days of sales outstanding (DSO) | days | 87.96 | 89.87 | 93.17 | 76.84 | 80.34 |
| Number of days of payables | days | 563.28 | 266.58 | 306.23 | 324.58 | — |
The Days of Inventory on Hand (DOH) ratio for GE Aerospace has shown fluctuations over the years, ranging from 75.93 days in 2020 to a peak of 695.32 days in 2024. This indicates that the company's inventory turnover has varied significantly during this period.
In terms of Days of Sales Outstanding (DSO), GE Aerospace has managed to keep this metric relatively stable, with figures hovering around 80 days in 2020 and dropping slightly to around 88 days by 2024. This suggests that the company has been efficient in collecting payments from its customers over the years.
When looking at the Number of Days of Payables, GE Aerospace did not have data available for 2020, but the company has gradually increased its payment period from 324.58 days in 2021 to 563.28 days in 2024. This may indicate that the company has been taking longer to settle its payables, possibly to manage cash flow or vendor relationships.
Overall, the activity ratios for GE Aerospace reveal mixed trends in inventory management, sales collection efficiency, and payment practices over the analyzed period. Continual monitoring and analysis of these ratios can provide insights into the company's operational performance and financial health.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | 1.29 | 1.84 | 2.33 | 1.70 |
| Total asset turnover | 0.31 | 0.20 | 0.31 | 0.37 | 0.30 |
The Fixed Asset Turnover ratio for GE Aerospace has shown fluctuations over the five years under review. In 2021, the company achieved a ratio of 2.33, indicating that it generated $2.33 in sales for every dollar invested in fixed assets. This was a significant improvement from the previous year's ratio of 1.70. However, in 2022 and 2023, the ratio decreased to 1.84 and 1.29, respectively, suggesting a decline in efficiency in utilizing fixed assets to generate revenue. Notably, there is missing data for 2024, which hinders a complete analysis for that year.
In contrast, the Total Asset Turnover ratio for GE Aerospace has also displayed variability during the same period. The ratio increased from 0.30 in 2020 to 0.37 in 2021, illustrating an improvement in the company's ability to generate sales relative to its total assets. However, this trend was not sustained as the ratio dropped to 0.31 in 2022 and further decreased to 0.20 in 2023. The ratio rebounded to 0.31 in 2024, suggesting a partial recovery in asset utilization efficiency.
Overall, these long-term activity ratios indicate that while GE Aerospace experienced fluctuations in its efficiency in utilizing fixed and total assets to generate revenue over the years, the company needs to focus on maintaining a consistent and effective asset turnover performance to drive growth and profitability.