Northrop Grumman Corporation (NOC)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	131.16	98.87	86.75	62.01	59.20
Days of sales outstanding (DSO)	days	63.87	66.39	74.73	71.22	65.87
Number of days of payables	days	234.29	188.12	229.47	167.97	140.85
Cash conversion cycle	days	-39.26	-22.85	-67.99	-34.75	-15.79

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 131.16 + 63.87 – 234.29
= -39.26

The cash conversion cycle of Northrop Grumman Corporation has exhibited fluctuations over the years based on the provided data.

As of December 31, 2020, the cash conversion cycle was -15.79 days, indicating that the company was able to convert its inventory and accounts receivable into cash quickly.

However, by December 31, 2021, the cash conversion cycle increased significantly to -34.75 days, suggesting a longer period for the company to convert its investments in inventory and accounts receivable into cash.

The trend continued as of December 31, 2022, with a further increase in the cash conversion cycle to -67.99 days, signifying a prolonged time for Northrop Grumman Corporation to convert its operating assets into cash.

By December 31, 2023, there was a notable improvement in the cash conversion cycle, decreasing to -22.85 days, indicating a faster conversion of inventory and accounts receivable into cash compared to the previous year.

Finally, as of December 31, 2024, the cash conversion cycle stood at -39.26 days, still in the negative range, implying efficient management in converting operating assets into cash.

Overall, the data reflects fluctuations in the cash conversion cycle of Northrop Grumman Corporation over the years, with variations in the efficiency of converting investments in inventory and accounts receivable into cash.