Northrop Grumman Corporation (NOC)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		2.78	3.69	4.21	5.89	6.17
DOH	days	131.16	98.87	86.75	62.01	59.20

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.78
= 131.16

The days of inventory on hand (DOH) for Northrop Grumman Corporation has shown an increasing trend over the past five years, with the metric standing at 59.20 days as of December 31, 2020, and rising to 131.16 days by December 31, 2024. This indicates that the company's inventory is being held for a longer period before being sold or utilized in operations.

The significant increase in the DOH from 2020 to 2024 by 71.96 days reflects a potential inefficiency in managing inventory levels. A higher DOH suggests that a company is struggling to sell its inventory quickly, which can tie up capital and lead to increased holding costs.

It is important for Northrop Grumman Corporation to closely monitor its inventory management practices and implement strategies to optimize inventory levels to improve liquidity, reduce holding costs, and enhance overall operational efficiency. Further analysis of the company's supply chain processes and demand forecasting may be necessary to address the increasing DOH trend observed over the past five years.