Northrop Grumman Corporation (NOC)
Fixed asset turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 41,033,000 | 39,290,000 | 36,602,000 | 35,667,000 | 36,799,000 |
| Property, plant and equipment | US$ in thousands | 10,536,000 | 9,653,000 | 8,800,000 | 7,894,000 | 7,071,000 |
| Fixed asset turnover | 3.89 | 4.07 | 4.16 | 4.52 | 5.20 |
December 31, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $41,033,000K ÷ $10,536,000K
= 3.89
The fixed asset turnover ratio measures the efficiency at which Northrop Grumman Corporation is utilizing its fixed assets to generate revenue. A higher fixed asset turnover ratio indicates that the company is generating more revenue per dollar of fixed assets.
From the data provided, we observe a gradual decline in Northrop Grumman Corporation's fixed asset turnover over the years. In December 2020, the fixed asset turnover was 5.20, indicating that the company generated $5.20 in revenue for every dollar invested in fixed assets. However, by December 2024, the ratio had decreased to 3.89, suggesting a decrease in efficiency in utilizing fixed assets to generate revenue.
This decline in fixed asset turnover could be attributed to various factors such as inefficient asset utilization, increased fixed asset base without a proportional increase in revenue, or changes in the company's operating structure. It is crucial for Northrop Grumman Corporation to address these issues to improve its efficiency in utilizing fixed assets and enhance overall financial performance.
Peer comparison
Dec 31, 2024