GE Aerospace (GE)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 26,994,000 | 45,321,000 | 43,418,000 | 46,149,000 | -2,809,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 19,342,000 | 27,403,000 | 33,696,000 | 40,310,000 | 35,552,000 |
| Return on total capital | 139.56% | 165.39% | 128.85% | 114.49% | -7.90% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $26,994,000K ÷ ($—K + $19,342,000K)
= 139.56%
The return on total capital for GE Aerospace has shown significant fluctuations over the past five years. As of December 31, 2020, the return on total capital was -7.90%, indicating a negative return on the capital invested in the company. However, in the following years, there was a remarkable turnaround in performance.
By December 31, 2021, the return on total capital surged to an impressive 114.49%, signifying a substantial improvement in the company's profitability and efficiency in utilizing its total capital. This positive trend continued in the subsequent years, with returns reaching 128.85% by December 31, 2022, 165.39% by December 31, 2023, and 139.56% by December 31, 2024.
The consistent growth in the return on total capital indicates that GE Aerospace has been successful in generating higher returns relative to the total capital employed in its operations. This could be attributed to effective cost management, strategic investments, or improved operational performance. Overall, the upward trajectory in return on total capital reflects positively on the company's financial health and operational effectiveness during this period.
Peer comparison
Dec 31, 2024