Northrop Grumman Corporation (NOC)

Cash conversion cycle

		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
Cash conversion cycle	days	-39.26	-63.17	-59.49	-90.58	-22.85	-60.25	-45.93	-68.94	-67.99	-79.36	-64.41	-73.47	-34.75	-80.33	-65.25	-62.15	-15.79	-109.64	-94.95	-105.85

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 shown fluctuations over the reported periods, ranging from -109.64 days to -15.79 days. The company's cash conversion cycle, which represents the time it takes to convert inventory into cash flow from sales, has generally remained negative, indicating efficient management of working capital.

The negative cash conversion cycle suggests that Northrop Grumman is able to generate cash flow from its operations before having to pay its suppliers, demonstrating effective management of inventory, accounts receivable, and accounts payable. This efficient conversion of working capital into cash flow indicates strong liquidity and operational efficiency within the company.

However, it is important to note that the fluctuation in the cash conversion cycle over time may indicate changes in the company's operations, sales patterns, or management of working capital. Monitoring these trends can provide insights into the company's financial health and efficiency in managing its cash flow.