Northrop Grumman Corporation (NOC)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 39,290,000 | 36,602,000 | 35,667,000 | 36,799,000 | 33,841,000 |
| Property, plant and equipment | US$ in thousands | 9,653,000 | 8,800,000 | 7,894,000 | 7,071,000 | 6,912,000 |
| Fixed asset turnover | 4.07 | 4.16 | 4.52 | 5.20 | 4.90 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $39,290,000K ÷ $9,653,000K
= 4.07
The fixed asset turnover ratio measures a company's ability to generate sales from its investment in fixed assets. A higher ratio indicates efficient utilization of fixed assets to generate sales.
Northrop Grumman Corp.'s fixed asset turnover has been declining over the past five years, from 5.20 in 2019 to 4.07 in 2023. This suggests a decrease in the company's ability to generate sales from its investment in fixed assets.
The declining trend could indicate underutilization of fixed assets or an increase in the company's investment in fixed assets without a corresponding increase in sales. It may be worth further investigation to understand the reasons behind this trend and to evaluate the company's capital investment and sales strategies.
Peer comparison
Dec 31, 2023