Northrop Grumman Corporation (NOC)

Days of sales outstanding (DSO)

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Receivables turnover		5.50	21.93	18.07	18.00	4.88	18.19	14.64	20.61	5.13	23.42	19.69	21.83	5.54	18.03	17.45	16.04	5.08	4.22	4.39	3.97
DSO	days	66.39	16.64	20.20	20.27	74.73	20.07	24.92	17.71	71.22	15.58	18.54	16.72	65.87	20.24	20.92	22.75	71.83	86.52	83.12	91.99

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.50
= 66.39

Days of Sales Outstanding (DSO) is a vital financial ratio that measures the average number of days it takes a company to collect payment after making a sale. A lower DSO indicates that the company is collecting payments more quickly, which can improve cash flow and working capital management.

Based on the provided data, Northrop Grumman Corp.'s DSO has shown some fluctuation over the past eight quarters. In the most recent period, as of December 31, 2023, the DSO stood at 66.39 days, marking a decrease from the previous quarter. This suggests that the company has improved its efficiency in collecting receivables, potentially indicating effective credit and collection policies.

Comparing this to historical data, there is evidence of variability in DSO, with some quarters experiencing notably higher DSO figures such as 89.78 days in June 30, 2022. This may indicate slower payment collection during that period.

Analyzing trends over time, investors and analysts can monitor the effectiveness of Northrop Grumman Corp.'s credit and collection practices. Further analysis of related factors such as changes in revenue recognition policies, customer payment terms, and economic conditions may provide additional insights into the drivers behind the DSO fluctuations.