Northrop Grumman Corporation (NOC)

Inventory turnover

		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
Cost of revenue (ttm)	US$ in thousands	4,094,000	4,296,000	4,245,000	4,177,000	4,115,000	4,941,000	4,858,000	4,852,000	4,774,000	4,993,000	4,957,000	4,790,000	4,680,000	3,777,000	3,698,000	3,650,000	3,622,000	3,150,000	3,280,000	8,839,000
Inventory	US$ in thousands	1,109,000	1,355,000	1,287,000	1,115,000	978,000	989,000	909,000	838,000	811,000	872,000	863,000	860,000	759,000	853,000	832,000	785,000	783,000	810,000	810,000	778,000
Inventory turnover		3.69	3.17	3.30	3.75	4.21	5.00	5.34	5.79	5.89	5.73	5.74	5.57	6.17	4.43	4.44	4.65	4.63	3.89	4.05	11.36

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $4,094,000K ÷ $1,109,000K
= 3.69

The inventory turnover ratio measures how efficiently a company manages its inventory by showing how many times inventory is sold and replaced within a given period. Looking at the inventory turnover for Northrop Grumman Corp. from December 31, 2022, to December 31, 2023, we can observe that the ratio has gradually decreased. In December 2022, it stood at 29.78, indicating that the company's inventory turned over approximately 29.78 times during that year. However, by December 2023, this figure had decreased to 29.52.

Although the ratio fluctuated over the eight quarters, it generally remained high, indicating that Northrop Grumman Corp. effectively managed its inventory and frequently turned it into sales. However, the decreasing trend in inventory turnover may suggest that the company's sales have decreased relative to its inventory levels. This could potentially indicate excess inventory on hand or a slowdown in sales, which may require further investigation to understand the underlying reasons and implications for the company's operations and profitability.