Northrop Grumman Corporation (NOC)

Working capital turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	41,033,000	39,290,000	36,602,000	35,667,000	36,799,000
Total current assets	US$ in thousands	14,274,000	13,706,000	12,488,000	12,426,000	15,344,000
Total current liabilities	US$ in thousands	14,128,000	11,942,000	11,587,000	9,530,000	9,580,000
Working capital turnover		281.05	22.27	40.62	12.32	6.38

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $41,033,000K ÷ ($14,274,000K – $14,128,000K)
= 281.05

Northrop Grumman Corporation's working capital turnover has exhibited a significant upward trend over the years, indicating a more efficient management of its working capital. The ratio has more than quadrupled from 6.38 in December 31, 2020, to 281.05 in December 31, 2024. This substantial increase suggests that the company has been able to generate a higher level of sales revenue relative to its working capital investment.

The peak value of 281.05 in December 31, 2024, indicates that for every dollar invested in working capital, Northrop Grumman Corporation generated $281.05 in sales revenue. This represents a remarkable efficiency in utilizing its working capital resources to generate sales.

However, the working capital turnover ratio saw fluctuations over the years, with the ratio reaching a peak of 40.62 in December 31, 2022, before experiencing a slight decline in the subsequent years. Despite the fluctuations, the overall increasing trend signifies improved operational efficiency and better utilization of working capital resources by Northrop Grumman Corporation.

Overall, the increasing trend in the working capital turnover ratio reflects the company's ability to effectively manage its working capital to support its sales activities and operations efficiently.