Northrop Grumman Corporation (NOC)

Payables turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	4,049,000	4,107,000	4,146,000	4,118,000	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
Payables	US$ in thousands	2,599,000	2,518,000	2,352,000	2,580,000	2,110,000	2,260,000	2,056,000	2,136,000	2,587,000	2,335,000	2,098,000	2,050,000	2,197,000	2,184,000	2,001,000	1,895,000	1,806,000	2,197,000	2,006,000	2,071,000
Payables turnover		1.56	1.63	1.76	1.60	1.94	1.90	2.06	1.96	1.59	2.12	2.32	2.37	2.17	2.29	2.48	2.53	2.59	1.72	1.84	1.76

December 31, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $4,049,000K ÷ $2,599,000K
= 1.56

The payables turnover ratio for Northrop Grumman Corporation has shown fluctuations over the analyzed period, ranging from a low of 1.56 to a high of 2.59. The ratio indicates how efficiently the company is managing its trade payables by calculating the number of times payables are turned over within a specific period.

A higher payables turnover ratio suggests that the company is paying off its suppliers more frequently, potentially indicating good cash flow management and strong supplier relationships. Conversely, a lower ratio may signal delays in payments to suppliers, which could lead to strained relationships or missed discounts for early payments.

In the latest periods, the payables turnover ratio has been relatively stable, hovering around the 2.00 mark. This indicates that Northrop Grumman is consistently managing its trade payables efficiently, maintaining a balance between timely payments to suppliers and optimizing cash flow. However, the decrease in the ratio towards the end of the analyzed period may warrant further investigation to ensure that the company's payment practices remain optimal.