Northrop Grumman Corporation (NOC)

Payables 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
Payables	US$ in thousands	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	2,226,000	2,021,000	1,962,000	1,932,000
Payables turnover		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	1.63	1.56	1.67	4.58

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $4,094,000K ÷ $2,110,000K
= 1.94

The payables turnover ratio measures how efficiently a company manages its accounts payable by comparing the cost of goods sold to its average accounts payable for a period. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently and efficiently.

Looking at Northrop Grumman Corp.'s payables turnover ratio, we observe fluctuations over the eight quarters presented. The ratio has shown an increasing trend from December 31, 2022, to December 31, 2023, with a value of 11.26 and 15.52, respectively. This suggests that the company improved its ability to pay off its suppliers and manage its accounts payable effectively during this period.

However, it is important to note that the payables turnover ratio alone may not provide a complete picture of a company's financial health. Further analysis, in conjunction with other ratios and financial indicators, would be necessary to gain a comprehensive understanding of Northrop Grumman Corp.'s overall financial performance and efficiency in managing its accounts payable.