General Electric is a diversified industrial conglomerate serving aviation, power and healthcare markets whose financial profile has shifted from multi-year volatility toward stronger profitability and cash generation, exemplified by a trailing twelve-month operating cash flow of $8.54B and a net profit margin of 19.0% as of 2025-12-31.
The company shows clear improvement in cash generation and earnings: trailing twelve-month operating cash flow rose from $4.71B to $8.54B over the last year while trailing net income moved from $6.56B to $8.70B, supporting sequential quarterly revenue growth in 2025 that reached a record $12.72B in the most recent quarter ([Strategic Capital Allocation](#cash-flow-allocation), [Revenue & Net Income](#revenue-net-income)).
Per-share metrics also recovered meaningfully in 2025, with revenue per share finishing the year at $42.94 (a one-year increase of 18.5%) and diluted EPS at $8.15 (one-year growth 32.8%), reflecting consistent quarter-over-quarter gains during the year ([EPS Diluted & Revenue per Share](#eps-revenue-per-share), [Revenue & EPS Growth](#growth-rates)).
Return on equity has expanded sharply and now stands at 46.6%, indicating stronger returns on invested capital ([Return on Equity (ROE)](#return-on-equity)).
Material areas of concern remain. Reported earnings and per-share results have been highly volatile historically: the net income consistency metric is low (avg/stdev ~ 0.57) and diluted EPS has seen extreme swings (examples in the series include +317.2% and -14,502.5%), which complicates forward forecasting ([Earnings Quality Analysis](#earnings-quality)).
Financing activity has also been a persistent cash outflow, with trailing twelve-month financing cash flow near -$8.68B as of 2025-12-31, and the market’s implied valuation multiple has expanded to a trailing P/E of 37.8x, up from 27.2x a year earlier, making sensitivity to future earnings particularly relevant ([Strategic Capital Allocation](#cash-flow-allocation), [Price-to-Earnings (PE) Ratio Trend](#pe-ratio)).
Key fundamental metrics to watch going forward include whether operating cash flow sustains levels near the current $8.5B TTM and whether net income continues to climb from $8.70B while narrowing the gap with cash flow ([Strategic Capital Allocation](#cash-flow-allocation), [Revenue & Net Income](#revenue-net-income)).
Stability in per-share trends ($42.94 in revenue per share and $8.15 in EPS) and one-year growth rates (18.5% and 32.8%) are also important to track ([EPS Diluted & Revenue per Share](#eps-revenue-per-share), [Revenue & EPS Growth](#growth-rates)).
Monitor profit margins around the recent 19.0% net margin and ROE near 46.6% for persistence ([Profit Margin Trends](#profit-margins), [Return on Equity (ROE)](#return-on-equity)), as well as earnings volatility measures and the trailing P/E of 37.8x to assess how sensitive valuation is to any earnings swings ([Earnings Quality Analysis](#earnings-quality), [Price-to-Earnings (PE) Ratio Trend](#pe-ratio)).
The foundation of business quality and long-term value creation
In 2025, GENERAL ELECTRIC CO reported steady sequential quarter-to-quarter increases in both revenue and net income. Revenue rose from $9.94B (2025-03-31) to $11.02B (2025-06-30), $12.18B (2025-09-30) and $12.72B (2025-12-31). Net income moved upward over the same period from $1.98B to $2.03B, $2.16B and $2.54B, showing consistent top-line and bottom-line improvement through the most recent quarter.
The longer history shows greater volatility, with several quarters above $20B of revenue in 2018–2020, intermittent negative net income in 2020–2022, and a notable net income spike of $7.51B on 2023-03-31; a pronounced outlier in the revenue series is $3.71B on 2024-12-31. The most recent quarterly revenue was $12.72B. The most recent quarterly net income was $2.54B.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Over the period Jan 2025 to Dec 2025, General Electric Co generates $45.85B in revenue. After accounting for taxes and expenses, the company retains 19.0% as net profit margin, resulting in $8.70B in net earnings from $45.85B in revenue.
Period Information
Report Type: Annual (10-K)
Period: Jan 2025 to Dec 2025
Analyzing long-term margin stability and competitive positioning
GENERAL ELECTRIC CO's net profit margin shows a clear recovery from multi-year losses into sustained positive profitability. After deep negative readings through 2018–2021 (low point -21.8% on 2018-09-30 and multiple negative quarters in 2021–2022), the margin crossed to near zero at 2022-12-31 (0.3%) and climbed into double digits through 2023. The series reached a peak in mid-2025 (22.5% at 2025-06-30) before a modest decline to year-end 2025.
Gross and operating margin observations in the dataset are last recorded in 2021. Gross margin was in the high-20s (28.8% at 2021-09-30) and operating margin in the low-teens (13.3% at 2021-09-30); the historical series also includes earlier higher spikes (e.g., gross margins ~68–69% in 2009–2011 and ~47% in 2017–2018, operating margins ~32–33% in 2017–2018). The most recent Net Profit Margin was 19.0%; the most recent Gross Margin was 28.8%; the most recent Operating Margin was 13.3%.
Understanding Profit Margins
Between Jan 2025 and Dec 2025, General Electric Co converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
Over the last several quarters, both Net Income (TTM) and Operating Cash Flow (TTM) for GENERAL ELECTRIC CO have risen. Net income increased from $6.56B at the 2024-12-31 TTM to $8.70B at the 2025-12-31 TTM, while operating cash flow moved from $4.71B to $8.54B over the same span. Net income has generally exceeded operating cash flow in recent quarters, but the gap narrowed in the most recent TTM as operating cash flow approached reported earnings.
Earlier periods show marked volatility: net income was materially negative in several quarters during 2018–2021 while operating cash flow remained positive, and there was a notable divergence in 2023-09-30 when net income reached $10.11B versus operating cash flow of $6.54B. Since then both metrics have trended upward and converged through 2025. The most recent trailing twelve months Net Income was $8.70B. The most recent trailing twelve months Operating Cash Flow was $8.54B.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
Trailing Twelve Months
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
GENERAL ELECTRIC CO’s ROE has climbed sharply over the last three years after a period of negative returns. The series shows a trough around 2022-09-30 at -18.6%, turning positive by 2022-12-31 (0.6%), then expanding through 2023 and 2024. The most recent year shows sequential quarterly gains: 36.3% (2025-03-31), 40.5% (2025-06-30), 42.9% (2025-09-30) and 46.6% (2025-12-31), indicating accelerating improvement in the trailing twelve-month ROE.
A notable inflection occurred between 2022-09-30 and 2022-12-31 when ROE moved from deeply negative to slightly positive; since that inflection the metric has generally trended higher, with a minor dip around 2024-12-31 (33.5%) relative to prior 2023-09-30 (35.3%) before resuming its upward path into 2025. The most recent ROE was 46.6%.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
GENERAL ELECTRIC CO's trailing twelve-month operating cash flow has risen steadily through 2025, moving from $4.71B at 2024-12-31 to $8.54B at 2025-12-31. Investing cash flow has been more variable, with recent TTM readings shifting from -$1.67B (2024-12-31) to a brief positive $960.0M (2025-06-30) before returning to modest outflows of about -$1.14B to -$1.15B in the latest two quarters. Financing cash flow has been persistently negative in recent periods, with TTM values clustered around -$6.7B to -$9.1B across 2024–2025; earlier in 2021–2022 the series showed much larger swings (large investing inflows and very large financing outflows), after which the metrics moved toward the more moderate ranges observed since 2023.
Focusing on the most recent quarterly TTM progression: operating cash flow increased quarter-to-quarter from $6.56B (2025-06-30) to $7.55B (2025-09-30) and then to $8.54B (2025-12-31). Investing cash flow was $960.0M (2025-06-30) but recorded -$1.14B (2025-09-30) and -$1.15B (2025-12-31) in the subsequent periods. Financing cash flow moved from -$9.12B (2025-06-30) to -$8.03B (2025-09-30) and -$8.68B (2025-12-31). The most recent trailing twelve-month values (period ending 2025-12-31) are: Operating Cash Flow $8.54B, Investing Cash Flow -$1.15B, Financing Cash Flow -$8.68B.
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Trailing Twelve Months
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
GENERAL ELECTRIC CO's trailing P/E has risen materially through 2024–2025. After 27.2x at 2024-12-31, the ratio moved to 30.6x (2025-03-31), 35.4x (2025-06-30) and peaked at 39.8x on 2025-09-30 before pulling back slightly to 37.8x at 2025-12-31. The most recent four quarters show an overall expanding P/E with a modest decline in the final quarter of 2025 relative to the September quarter.
Earlier periods include a pronounced spike to 251.3x at 2022-12-31 and multi-quarter lows around 9.2–9.8x in 2023, with much lower historical readings in 2009–2011. The most recent Price-to-Earnings ratio for GENERAL ELECTRIC CO was 37.8x as of 2025-12-31.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.