Northrop Grumman Corporation (NOC)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 89.58% | 88.76% | 86.62% | 87.28% | 89.30% |
| Operating profit margin | 6.46% | 9.84% | 15.84% | 11.05% | 11.73% |
| Pretax margin | 5.97% | 15.94% | 25.06% | 10.13% | 7.53% |
| Net profit margin | 5.23% | 13.38% | 19.64% | 8.67% | 6.64% |
The profitability ratios of Northrop Grumman Corp. show a declining trend over the years. The gross profit margin decreased from 21.45% in 2019 to 16.67% in 2023, indicating a reduction in the company's ability to generate profits from its core business activities. This downward trend may be attributed to factors such as increased production costs or pricing pressures.
Similarly, the operating profit margin decreased from 11.73% in 2019 to 6.46% in 2023, reflecting a decline in the company's profitability after accounting for operating expenses. This decrease suggests that Northrop Grumman Corp. may be facing challenges in managing its operational costs and improving operational efficiency.
The pretax margin also shows a decreasing trend, declining from 25.06% in 2021 to 5.97% in 2023. This indicates a significant reduction in the company's ability to generate profits before accounting for income taxes. The declining trend in pretax margin may be a result of increased expenses or lower revenue generation, impacting the overall profitability of the company.
Furthermore, the net profit margin decreased from 6.64% in 2019 to 5.23% in 2023, indicating a declining trend in the company's ability to convert revenue into net income. This decrease suggests that Northrop Grumman Corp. may be experiencing challenges in managing its overall expenses and achieving bottom-line profitability.
Overall, the consistent decline in profitability ratios signals a potential concern for Northrop Grumman Corp.'s financial performance. It may be important for the company to closely evaluate its cost structures, revenue generation strategies, and operational efficiency to address these declining profitability trends and improve its overall financial health.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.45% | 8.23% | 13.27% | 9.14% | 9.66% |
| Return on assets (ROA) | 4.42% | 11.19% | 16.45% | 7.17% | 5.47% |
| Return on total capital | 8.88% | 13.28% | 21.99% | 16.36% | 18.38% |
| Return on equity (ROE) | 13.90% | 31.97% | 54.19% | 30.14% | 25.49% |
Based on the profitability ratios of Northrop Grumman Corp., there has been a noticeable variation in its performance over the past five years. The operating return on assets (Operating ROA) has displayed a declining trend from 9.66% in 2019 to 5.45% in 2023. This downward trajectory suggests a decreasing ability to generate operating profit from its assets.
Similarly, the return on assets (ROA) exhibited volatility, with a significant increase from 5.47% in 2019 to 16.45% in 2021, followed by a decline to 4.42% in 2023. This fluctuation indicates inconsistent efficiency in utilizing its assets to generate net income.
The return on total capital has also seen a decreasing trend from 18.38% in 2019 to 8.88% in 2023. This decline reflects a diminishing ability to generate returns from all sources of capital, including debt and equity.
Furthermore, the return on equity (ROE) demonstrated substantial volatility, with an increase from 25.49% in 2019 to 54.19% in 2021 and a subsequent drop to 13.90% in 2023. This suggests fluctuations in the company's ability to generate profit from shareholders' equity.
Overall, the profitability ratios of Northrop Grumman Corp. reveal varying degrees of performance over the past five years, with notable changes in its ability to generate returns from its assets, capital, and equity.