Northrop Grumman Corporation (NOC)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,094,000 | 4,115,000 | 4,774,000 | 4,680,000 | 3,622,000 |
| Inventory | US$ in thousands | 1,109,000 | 978,000 | 811,000 | 759,000 | 783,000 |
| Inventory turnover | 3.69 | 4.21 | 5.89 | 6.17 | 4.63 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $4,094,000K ÷ $1,109,000K
= 3.69
The analysis of Northrop Grumman Corp.'s inventory turnover reveals a declining trend over the past five years. The inventory turnover ratio, which indicates the efficiency of inventory management, decreased from 35.02 in 2021 to 29.52 in 2023. This indicates a decrease in the number of times the company's inventory was turned over during the year, suggesting a potential inefficiency in managing its inventory levels. A decreasing trend in inventory turnover may indicate overstocking, slow-moving inventory, or difficulties in managing production and sales. Northrop Grumman Corp. should closely monitor and optimize its inventory management processes to improve operational efficiency and potentially free up working capital. Further analysis of the underlying reasons for the declining inventory turnover is warranted to address any potential operational challenges.
Peer comparison
Dec 31, 2023