Northrop Grumman Corporation (NOC)
Liquidity 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.01 | 1.09 | 1.11 | 1.13 | 1.15 | 1.28 | 1.20 | 1.22 | 1.08 | 1.14 | 1.30 | 1.31 | 1.30 | 1.47 | 1.49 | 1.46 | 1.60 | 1.44 | 1.35 | 1.29 |
| Quick ratio | 0.82 | 0.38 | 0.38 | 0.37 | 0.86 | 0.37 | 0.47 | 0.43 | 0.87 | 0.33 | 0.40 | 0.44 | 1.10 | 0.64 | 0.68 | 0.62 | 1.21 | 0.69 | 0.63 | 0.53 |
| Cash ratio | 0.31 | 0.25 | 0.25 | 0.23 | 0.26 | 0.20 | 0.29 | 0.24 | 0.22 | 0.15 | 0.13 | 0.25 | 0.37 | 0.46 | 0.46 | 0.42 | 0.51 | 0.49 | 0.43 | 0.32 |
The current ratio of Northrop Grumman Corporation has fluctuated over the years, ranging from a low of 1.01 at the end of December 2024 to a high of 1.60 at the end of December 2020, indicating some variability in its short-term liquidity position. Generally, a current ratio above 1 is considered healthy, as it suggests the company has more current assets to cover its current liabilities. However, the downward trend towards the end of the period may imply a potential liquidity strain.
On the other hand, the quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, also demonstrates fluctuations. It ranged from a low of 0.33 at the end of September 2022 to a peak of 1.21 at the end of December 2020. The quick ratio below 1 for most periods indicates that Northrop Grumman may have difficulty meeting its short-term obligations without relying on the sale of inventory, which could be a concern for investors and creditors.
Lastly, the cash ratio, which is the most conservative liquidity measure focusing solely on cash and cash equivalents, shows a decreasing trend over the period. From a high of 0.51 at the end of December 2020 to a low of 0.13 at the end of June 2022, the cash ratio indicates a reduction in the company's ability to cover its short-term liabilities with its cash reserves alone.
In summary, the liquidity ratios of Northrop Grumman Corporation reflect varying levels of short-term solvency and liquidity challenges throughout the years, with the current ratio generally above 1 but showing a declining trend, while the quick ratio and cash ratio suggest potential liquidity concerns that warrant further analysis.
See also:
Northrop Grumman Corporation Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle of Northrop Grumman Corporation has shown fluctuations over the periods analyzed. The company's cash conversion cycle has generally been negative, indicating efficient management of its working capital and quick conversion of inventory to cash.
In the initial periods, the company's cash conversion cycle was around -100 days, reflecting a rapid turnover of inventory, receivables, and payables. However, there were some fluctuations observed, such as a decrease in the cash conversion cycle to around -15 days by the end of December 2020.
Subsequently, the cash conversion cycle fluctuated around -60 to -80 days in the following quarters, indicating relatively stable management of working capital during this period. However, there were occasional improvements or regressions observed in the efficiency of the company's working capital management.
Towards the end of the analysis period, the cash conversion cycle remained around -60 to -90 days, suggesting that the company maintained a relatively efficient cash conversion cycle despite some fluctuations.
Overall, Northrop Grumman Corporation has maintained a negative cash conversion cycle over the analyzed periods, indicating efficient management of its working capital and a consistent ability to convert inventory and receivables into cash quickly.