GE Aerospace (GE)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 86.76% | 163.13% | 106.16% | 83.37% | 4.26% |
| Operating profit margin | 69.75% | 128.21% | 74.73% | 62.20% | -3.70% |
| Pretax margin | 19.43% | 30.11% | 1.21% | -9.17% | 6.88% |
| Net profit margin | 16.94% | 26.82% | 0.58% | -8.79% | 7.52% |
The profitability ratios of GE Aerospace, as depicted by the provided data, have shown significant fluctuations over the years. The gross profit margin experienced a notable increase from 2020 to 2023, reaching a peak of 163.13%, before slightly decreasing to 86.76% in 2024. This indicates that the company has been effective in managing its production costs and generating higher revenues in recent years.
Similarly, the operating profit margin displayed a positive trend, with a substantial rise from -3.70% in 2020 to 128.21% in 2023, demonstrating efficient cost control and operational performance. However, there was a slight decline to 69.75% in 2024, signaling potential challenges in sustaining profitability levels.
Moreover, the pretax margin witnessed a significant improvement from -9.17% in 2021 to 30.11% in 2023, before moderating to 19.43% in 2024. This indicates that GE Aerospace has been successful in enhancing its profitability before tax expenses.
The net profit margin, a key indicator of overall profitability, fluctuated notably, with a sharp decline from 7.52% in 2020 to -8.79% in 2021, before rebounding to 26.82% in 2023 and settling at 16.94% in 2024. This suggests that the company has managed to recover from a loss-making year and improve its bottom line profitability in subsequent years.
Overall, GE Aerospace's profitability ratios reflect a mix of positive and challenging trends, indicating the company's ability to adapt to changing market conditions and financial performance.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 21.92% | 26.15% | 22.99% | 23.21% | -1.10% |
| Return on assets (ROA) | 5.32% | 5.47% | 0.18% | -3.28% | 2.23% |
| Return on total capital | 139.56% | 165.39% | 128.85% | 114.49% | -7.90% |
| Return on equity (ROE) | 33.90% | 34.60% | 1.01% | -16.17% | 16.04% |
Based on the provided data, GE Aerospace's profitability ratios have shown notable fluctuations over the five-year period from 2020 to 2024:
1. Operating return on assets (Operating ROA) improved substantially from a negative 1.10% in 2020 to reach 26.15% by the end of 2023 before slightly declining to 21.92% in 2024. This indicates that the company significantly enhanced its operational efficiency and profitability relative to its asset base during this period.
2. Return on assets (ROA) experienced significant volatility, ranging from a positive 2.23% in 2020 to a negative 3.28% in 2021, and then gradually improving to 5.32% in 2024. This metric reflects the company's ability to generate profits from its total assets, with improvements seen in the latter years.
3. Return on total capital exhibited a remarkable resurgence from a negative 7.90% in 2020 to a high of 165.39% in 2023, before settling at 139.56% in 2024. This ratio indicates the company's efficiency in generating returns from both debt and equity investments in the business.
4. Return on equity (ROE) fluctuated significantly, with a notable decline from 16.04% in 2020 to negative 16.17% in 2021, followed by a recovery to 33.90% by the end of 2024. ROE reflects the company's ability to generate profits for its shareholders from the equity invested in the firm.
Overall, the analysis of these profitability ratios suggests that GE Aerospace underwent a period of volatility but ultimately showed improvements in operational efficiency, asset utilization, and profitability over the five-year period.