GE Aerospace (GE)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 5.96 | 5.60 | 4.93 | 7.21 | 9.36 |
The solvency ratios of General Electric Co. indicate its ability to meet its long-term financial obligations and the extent of its reliance on debt financing.
1. Debt-to-assets ratio decreased from 0.34 in 2019 to 0.15 in 2023, demonstrating a significant improvement in the company's ability to cover its obligations with its assets. This trend suggests a stronger financial position in terms of asset coverage.
2. Debt-to-capital ratio remained stable at around 0.47 from 2020 to 2023. A stable ratio indicates that General Electric Co. has a balanced mix of debt and equity in its capital structure, which may help maintain financial stability.
3. Debt-to-equity ratio declined from 3.21 in 2019 to 0.88 in 2023, showing a healthier balance between debt and equity financing. This lower ratio indicates that the company has decreased its reliance on debt and improved its financial leverage.
4. Financial leverage ratio decreased from 9.40 in 2019 to 5.96 in 2023. A lower financial leverage ratio signifies that General Electric Co. has reduced its reliance on debt to fund its operations and investments, which can lower financial risk and enhance solvency.
Overall, the solvency ratios of General Electric Co. have shown a positive trend in recent years, with improvements in debt coverage, capital structure balance, reduced reliance on debt, and stronger financial leverage. These improvements suggest that the company has enhanced its financial stability and ability to meet its long-term obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 40.54 | 29.40 | 24.60 | -0.86 | -2.21 |
General Electric Co.'s interest coverage ratio has displayed varying trends over the past five years. The interest coverage ratio measures a company's ability to pay interest expenses on outstanding debt using its operating income.
In 2023, the interest coverage ratio improved to 3.63, indicating that the company earned 3.63 times the amount needed to cover its interest expenses for the year. This represents a positive trend compared to the previous year.
In 2022, the interest coverage ratio was at 1.68, suggesting that the company's operating income was only sufficient to cover its interest expenses 1.68 times. This ratio improved in 2023, reflecting stronger financial health.
In 2021, the interest coverage ratio was 1.96, showing a slight improvement from the previous year. However, in 2020, the ratio was negative at -0.76, indicating that the company's operating income was insufficient to cover its interest expenses, which raises concerns about its financial stability.
In 2019, the interest coverage ratio was at a healthier level of 3.21, suggesting that the company had a stronger ability to fulfill its interest payment obligations.
Overall, General Electric Co.'s interest coverage ratio has fluctuated significantly over the five-year period, with improvements in recent years indicating better ability to meet interest payment obligations and potentially reflecting enhanced financial performance. Nonetheless, the negative ratio in 2020 underscores the importance of closely monitoring the company's financial health and debt management practices.