Northrop Grumman Corporation (NOC)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	98.87	86.75	62.01	59.20	78.91
Days of sales outstanding (DSO)	days	66.39	74.73	71.22	65.87	71.83
Number of days of payables	days	188.12	229.47	167.97	140.85	224.32
Cash conversion cycle	days	-22.85	-67.99	-34.75	-15.79	-73.58

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 98.87 + 66.39 – 188.12
= -22.85

The cash conversion cycle of Northrop Grumman Corp. has shown a slight increase from 52.02 days in 2019 to 55.23 days in 2023. This indicates that the company is taking slightly longer to convert its investments in inventory and other resources into cash. The trend suggests that there may be inefficiencies in the company's working capital management or in its ability to collect receivables and manage payables effectively. It would be prudent for stakeholders to closely monitor this trend to ensure that the company maintains an efficient cash conversion cycle, which is crucial for maintaining liquidity and optimizing operational performance.