Northrop Grumman Corporation (NOC)

Activity ratios

Short-term

Turnover ratios

	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
Inventory turnover	2.78	2.50	2.76	3.01	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
Receivables turnover	5.71	25.47	24.06	21.90	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
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
Working capital turnover	281.05	33.29	30.00	24.11	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

Northrop Grumman Corporation's activity ratios reflect the efficiency of its operations in managing inventories, receivables, payables, and working capital.

1. Inventory Turnover: The inventory turnover ratio indicates how many times the company's inventory is sold and replaced over a period. Northrop Grumman's inventory turnover has generally been decreasing over the years, from 4.65 in March 2020 to 2.78 in December 2024. This declining trend suggests that the company may be carrying higher levels of inventory relative to its sales.

2. Receivables Turnover: The receivables turnover ratio measures how efficiently the company collects on its credit sales. Northrop Grumman's receivables turnover fluctuated but generally improved over the years, from 16.04 in March 2020 to 25.47 in September 2024. This indicates that the company has been collecting its receivables more quickly, which is a positive sign for its cash flow.

3. Payables Turnover: The payables turnover ratio shows how quickly the company pays its suppliers. Northrop Grumman's payables turnover has been relatively stable over the years, ranging from 1.56 to 2.59. A higher turnover ratio indicates that the company is paying its suppliers more quickly, possibly taking advantage of discounts or managing its cash flow efficiently.

4. Working Capital Turnover: The working capital turnover ratio measures how effectively the company utilizes its working capital to generate sales. Northrop Grumman's working capital turnover has fluctuated significantly, with a notable increase from 6.38 in December 2020 to 281.05 in December 2024. Such a drastic change may indicate variations in the company's operating efficiency and capital management strategies over the years.

Overall, analyzing Northrop Grumman's activity ratios provides insights into the company's operational efficiency, inventory management, collections, payment practices, and overall utilization of working capital. A detailed analysis of these ratios can assist in identifying areas for improvement and optimizing the company's financial performance.

Average number of days

		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
Days of inventory on hand (DOH)	days	131.16	146.28	132.41	121.43	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
Days of sales outstanding (DSO)	days	63.87	14.33	15.17	16.67	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
Number of days of payables	days	234.29	223.78	207.06	228.68	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

Based on the provided data for Northrop Grumman Corporation, the following analysis of activity ratios can be made:

1. Days of Inventory on Hand (DOH):
- The DOH measures the average number of days a company holds inventory before it is sold. Northrop Grumman's DOH fluctuated over the period, ranging from a low of 59.20 days to a high of 146.28 days. An increasing trend in DOH could indicate potential issues such as overstocking or slowing sales.

2. Days of Sales Outstanding (DSO):
- DSO represents how long it takes for a company to collect revenue after a sale has been made. Northrop Grumman's DSO showed variability, with values ranging from 15.17 days to 74.73 days. A decreasing trend in DSO is generally positive as it indicates faster collection of accounts receivable.

3. Number of Days of Payables:
- This ratio reflects the average number of days a company takes to pay its suppliers. Northrop Grumman's days of payables ranged from 140.85 days to 234.29 days. A higher number of days of payables may suggest that the company is taking longer to settle its debts with suppliers.

Overall, an efficient management of these activity ratios is crucial for Northrop Grumman to optimize its working capital cycle and ensure effective cash flow management. Monitoring these ratios over time can provide insights into the company's operational efficiency and financial health.

Long-term

	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
Fixed asset turnover	3.89	4.07	4.17	4.14	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
Total asset turnover	0.83	0.85	0.86	0.84	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

The Fixed Asset Turnover ratio for Northrop Grumman Corporation has shown a decreasing trend from 4.93 as of March 31, 2020, to 3.89 as of December 31, 2024. This indicates that the company is generating less revenue from its fixed assets over the years.

On the other hand, the Total Asset Turnover ratio has fluctuated over the same period, with a slight increase from 0.79 as of March 31, 2020, to 0.83 as of December 31, 2020, followed by more variability but ultimately settling at 0.83 as of June 30, 2024. This ratio shows how efficiently Northrop Grumman is utilizing all its assets to generate revenue.

Overall, the decreasing trend in Fixed Asset Turnover and the relatively stable Total Asset Turnover suggest that the company may be facing challenges in efficiently utilizing its fixed assets to generate revenue, while the overall asset utilization efficiency has remained somewhat consistent over the years.