Northrop Grumman Corporation (NOC)

Activity ratios

Short-term

Turnover ratios

	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
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
Receivables turnover	5.50	21.93	18.07	18.00	4.88	18.19	14.64	20.61	5.13	23.42	19.69	21.83	5.54	18.03	17.45	16.04	5.08	4.22	4.39	3.97
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
Working capital turnover	22.27	13.60	16.38	15.95	40.62	23.69	13.14	13.05	12.32	9.06	9.02	9.61	6.38	7.95	10.05	11.61	27.05	13.75	16.41	19.45

The activity ratios of Northrop Grumman Corp. provide valuable insights into its operational efficiency and management of resources.

Inventory turnover reflects the company's ability to manage its inventory. The consistently high levels of inventory turnover indicate that Northrop Grumman is efficiently managing its inventory levels and quickly converting inventory into sales, which is a positive sign for the company.

Receivables turnover measures how efficiently the company is collecting on its credit sales. The consistent and steady receivables turnover suggests that Northrop Grumman has been effective in collecting payments from its customers, which is a positive indicator of its credit management.

Payables turnover measures how efficiently the company is paying its suppliers. The consistently high payables turnover ratios suggest that Northrop Grumman has effectively managed its payments to suppliers, which can result in positive relationships with suppliers and potential cost savings.

Working capital turnover indicates how efficiently the company is utilizing its working capital to generate sales. The overall trend of working capital turnover for Northrop Grumman indicates a fluctuating performance over the periods, which may require further analysis to understand the reasons behind the fluctuations and any potential impact on the company's operations.

In conclusion, Northrop Grumman Corp. has demonstrated strong operational efficiency in managing its inventory, collecting receivables, and managing payables. However, the fluctuations in working capital turnover may warrant further investigation to fully understand the company's resource management effectiveness.

Average number of days

		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
Days of inventory on hand (DOH)	days	98.87	115.12	110.66	97.43	86.75	73.06	68.30	63.04	62.01	63.75	63.55	65.53	59.20	82.43	82.12	78.50	78.91	93.86	90.14	32.13
Days of sales outstanding (DSO)	days	66.39	16.64	20.20	20.27	74.73	20.07	24.92	17.71	71.22	15.58	18.54	16.72	65.87	20.24	20.92	22.75	71.83	86.52	83.12	91.99
Number of days of payables	days	188.12	192.02	176.78	186.65	229.47	172.49	157.63	154.21	167.97	159.66	147.34	144.40	140.85	212.31	198.00	207.10	224.32	234.18	218.33	79.78

To analyze the activity ratios of Northrop Grumman Corp., we will examine the days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables.

Days of inventory on hand (DOH) measures how efficiently the company manages its inventory. A lower DOH indicates better inventory management. Over the eight quarters analyzed, we notice a fluctuating trend in DOH, ranging from a low of 10.96 days in March 2022 to a high of 16.06 days in September 2023. While the DOH has occasionally increased, it generally remains within a relatively narrow range, suggesting reasonably effective inventory management.

Days of sales outstanding (DSO) represents the average number of days it takes for the company to collect revenue after a sale. A lower DSO suggests strong collections. In this case, the DSO has shown considerable variability, ranging from a low of 66.39 days in December 2023 to a high of 89.78 days in June 2022. This variability in collection efficiency warrants further investigation to assess any underlying causes or trends impacting the company's sales and credit policies.

The number of days of payables measures the average number of days it takes for the company to pay its suppliers. A higher number of days of payables indicates that the company takes longer to settle its payables. Over the quarters, the number of days of payables has fluctuated, with a decrease from 32.42 days in March 2022 to 23.52 days in December 2023. The downward trend suggests improved management of payables, though the variability in this ratio warrants ongoing monitoring.

In summary, Northrop Grumman Corp. has demonstrated relatively stable inventory management, although it should monitor the fluctuating collection efficiency and continue efforts to effectively manage its payables.

Long-term

	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
Fixed asset turnover	4.07	4.22	4.22	4.20	4.16	4.23	4.30	4.40	4.52	5.12	5.25	5.26	5.20	4.91	4.91	4.93	4.90	5.03	5.04	4.91
Total asset turnover	0.84	0.86	0.83	0.84	0.84	0.82	0.83	0.84	0.84	0.88	0.89	0.90	0.83	0.79	0.80	0.79	0.82	0.82	0.83	0.79

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. Northrop Grumman Corp.'s fixed asset turnover has remained relatively stable over the past eight quarters, ranging between 4.07 and 4.40. This indicates that the company has consistently been able to generate approximately $4 of sales for every dollar invested in fixed assets.

On the other hand, the total asset turnover ratio reflects the company's overall efficiency in using all its assets to generate revenue. Northrop Grumman Corp.'s total asset turnover has also shown consistency, hovering around 0.83 to 0.86 over the same period. This suggests that the company has maintained an effective level of sales generated per dollar of total assets.

Overall, based on these long-term activity ratios, Northrop Grumman Corp. has demonstrated consistent efficiency in utilizing both fixed and total assets to generate sales over the past two years.