Goldman Sachs is a global investment bank and diversified financial services firm providing investment banking, trading, asset management and wealth management, with a financial profile that combines above-average profitability and multi-year per‑share growth alongside episodic cash‑flow volatility.
The company’s growth record is notable: 12.67% 5‑year EPS compound annual growth rate and 6.53% 5‑year revenue‑per‑share CAGR, while 3‑year EPS CAGR is 15.11% and most recent year‑over‑year EPS rose 20.3% against revenue‑per‑share growth of 8.9% — see Revenue & Net Income, EPS Diluted & Revenue per Share and Revenue & EPS Growth.
Profitability metrics are strong, with a most recent net profit margin of 29.5%, an average net margin of 25.73% and reported operating margin readings as high as 45.6% (latest available), supporting a trailing‑12‑month return on equity of 13.7% — see Profit Margin Trends and Return on Equity (ROE).
A material concern is the divergence between accrual earnings and cash generation. Reported net income (TTM) was $17.18B while operating cash flow (TTM) swung to a large negative −$45.15B in the most recent period, and the dataset notes prior extreme operating outflows in the range of about −$75.8B to −$88.3B — see Earnings Quality Analysis.
Cash‑flow allocation patterns also show heavy financing inflows (\$127.57B TTM) alongside sustained investing outflows (−$44.23B TTM), highlighting reliance on financing activity in the latest periods — see Strategic Capital Allocation.
The foundation of business quality and long-term value creation
Revenue for GOLDMAN SACHS GROUP INC has moved within a relatively narrow band over the past several quarters, rising to a recent peak of $15.18B in 2025-09 before declining to $13.45B in 2025-12. Earlier 2025 quarters showed revenue of $15.06B (2025-03) and $14.58B (2025-06), indicating a modest downshift into the final quarter of 2025 from mid-year highs.
Net income showed more variability but recovered through 2025: $4.74B in 2025-03, down to $3.72B in 2025-06, then $4.10B in 2025-09 and $4.62B in 2025-12. That recovery left net income in 2025-12 above the prior-year quarter (2024-12) with $4.11B. The most recent quarterly revenue was $13.45B and the most recent quarterly net income was $4.62B.
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, Goldman Sachs Group Inc generates $58.28B in revenue. After accounting for taxes and expenses, the company retains 29.5% as net profit margin, resulting in $17.18B in net earnings from $58.28B in revenue.
Period Information
Report Type: Annual (10-K)
Period: Jan 2025 to Dec 2025
Analyzing long-term margin stability and competitive positioning
GOLDMAN SACHS GROUP INC’s net profit margin has trended upward over the most recent eight quarters, rising from 19.5% at 2024-03-31 to 29.5% at 2025-12-31. The last four quarters show steady quarter-to-quarter gains (27.4% → 27.7% → 28.4% → 29.5%), indicating a consistent improvement in the company's bottom-line percentage of revenue across 2024–2025.
Looking further back, the series is more volatile, with a peak net margin of 36.5% at 2021-12-31 and troughs in 2020 (as low as 13.3% on 2020-06-30) before the rebound that began in 2022–2024. Gross and operating margin observations in the dataset are less frequent; the latest recorded gross margin is 134.7% and the latest recorded operating margin is 45.6%, both at 2021-12-31. The most recent Net Profit Margin was 29.5% (2025-12-31). The most recent Gross Margin was 134.7% (2021-12-31). The most recent Operating Margin was 45.6% (2021-12-31).
Understanding Profit Margins
Between Jan 2025 and Dec 2025, Goldman Sachs Group Inc 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
GOLDMAN SACHS GROUP INC shows a clear divergence between reported earnings and operating cash flow over the displayed period. Net income (TTM) has trended upward in recent quarters, rising from about $12.17B at 2023-09-30 to $17.18B at 2025-12-31, indicating steady reported profitability. By contrast, operating cash flow (TTM) is highly volatile and does not track net income closely: after extreme negative readings in mid-2024 (around -$75.8B to -$88.3B), cash flow recovered into positive territory in 2025-09-30 ($17.89B) before swinging back sharply to a large negative value in the most recent quarter.
Notable inflection points include the large negative operating cash flows in 2024-06-30 and 2024-09-30, the recovery to positive operating cash flow by 2025-09-30, and the abrupt drop to -$45.15B in 2025-12-31 while net income continued to rise. The most recent Net Income (TTM) was $17.18B and the most recent Operating Cash Flow (TTM) was -$45.15B.
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
GOLDMAN SACHS GROUP INC's ROE has risen steadily across the most recent five quarters, moving from 11.7% at 2024-12-31 to 12.0% (2025-03-31), 12.5% (2025-06-30), 13.4% (2025-09-30), and 13.7% at 2025-12-31. This reflects a consistent quarter‑over‑quarter improvement through 2025 after ROE was in the low- to mid-teens in late 2024.
Looking further back, ROE peaked at 20.9% on 2021-09-30 before a multi-quarter decline into 2022–2023, reaching lower single digits in some quarters (for example, 6.0% on 2020-06-30 and 6.7% on 2023-09-30), followed by the recovery that began in 2023 and continued through 2025. The most recent trailing twelve-month return on equity for GOLDMAN SACHS GROUP INC was 13.7% for the quarter ended 2025-12-31.
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
GOLDMAN SACHS GROUP INC’s trailing‑12‑month cash flows show a recent deterioration in operating cash generation and continued outflows for investing, alongside a marked pickup in financing activity. Operating cash flow moved from a positive $17.89B at the 2025‑09‑30 TTM to a negative −$45.15B at the 2025‑12‑31 TTM, representing a clear inflection into large net operating outflows late in 2025. Investing cash flow has been consistently negative across the series, swinging from larger outflows around −$70.48B (2025‑06‑30 TTM) toward a more moderate −$44.23B at the 2025‑12‑31 TTM.
Financing cash flow rose sharply in the most recent observation, increasing to $127.57B at the 2026‑03‑31 TTM from $66.10B at the 2025‑12‑31 TTM and $41.53B at 2025‑09‑30 TTM. The most recent TTM operating cash flow was −$45.15B (period end 2025-12-31). The most recent TTM investing cash flow was −$44.23B (period end 2025-12-31). The most recent TTM financing cash flow was $127.57B (period end 2026-03-31).
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
GOLDMAN SACHS GROUP INC's trailing twelve-month P/E has moved higher over the past year. After hovering around the low-to-mid teens through 2023–2024 (roughly 12.7–14.5x), the ratio dipped to 11.7x in the March 31, 2025 quarter and then rose sharply thereafter, increasing to 14.4x by June 30, 2025 and continuing to 15.2x in September and 16.3x at the December 31, 2025 quarter. The most notable inflection in the recent series is the mid-2025 re-rating from 11.7x to 16.3x over three quarters.
Over a longer horizon the series shows a trough in 2021–2022 (around 5.6–6.9x) and a steady recovery beginning in 2023 through 2025, culminating in the current level. The most recent Price-to-Earnings (P/E) ratio was 16.3x.
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.