Northrop Grumman Corporation (NOC)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 90.13% | 89.58% | 88.76% | 86.62% | 87.28% |
| Operating profit margin | 10.65% | 6.46% | 9.84% | 15.84% | 11.05% |
| Pretax margin | 12.22% | 5.97% | 15.94% | 25.06% | 10.13% |
| Net profit margin | 10.17% | 5.23% | 13.38% | 19.64% | 8.67% |
Northrop Grumman Corporation has shown a consistent and impressive trend in its profitability ratios over the years. The company's gross profit margin has been on an upward trajectory, increasing from 87.28% in December 2020 to 90.13% in December 2024, indicating efficient cost management and strong pricing power.
In terms of operating profit margin, there has been some fluctuation with a peak in December 2021 at 15.84% but showing a slight decline in the following years. This suggests variations in operating expenses and possibly some challenges in maintaining profitability at the operating level.
The pretax margin also saw a significant peak in December 2021 at 25.06%, highlighting a strong performance in generating profits before taxes. However, there was a substantial drop in December 2023 to 5.97%, indicating a decline in the company's ability to generate profits before accounting for taxes.
Net profit margin, representing the company's profitability after all expenses have been deducted, also peaked in December 2021 at 19.64% but subsequently dropped in December 2023 to 5.23%. The net profit margin increased in December 2024 to 10.17%, showing signs of recovery.
Overall, while Northrop Grumman Corporation has demonstrated strong gross profit margins and periods of high profitability, there have been fluctuations in operating profit margin, pretax margin, and net profit margin indicating potential challenges in managing operating expenses and generating consistent profitability over time.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.85% | 5.45% | 8.23% | 13.27% | 9.14% |
| Return on assets (ROA) | 8.46% | 4.42% | 11.19% | 16.45% | 7.17% |
| Return on total capital | 14.58% | 8.88% | 13.28% | 21.99% | 16.36% |
| Return on equity (ROE) | 27.30% | 13.90% | 31.97% | 54.19% | 30.14% |
Northrop Grumman Corporation's profitability ratios exhibit fluctuations over the years.
1. Operating return on assets (Operating ROA) indicates the company's ability to generate profits from its assets used in operations. The trend shows a decrease from 2021 to 2024, with a significant drop in 2023. This suggests that the company's operational efficiency may have declined during this period.
2. Return on assets (ROA) reflects the overall profitability of the company's assets. Northrop Grumman's ROA spiked in 2021 but then declined in the following years, with a notable decrease in 2023. This indicates that the company may not be effectively utilizing its assets to generate profits during these years.
3. Return on total capital measures the return generated by the company's total capital employed. The trend in this ratio shows fluctuations, with the highest return in 2021 and a subsequent decrease in the following years. While the ratio improved in 2024 compared to 2023, it did not reach the peak level of 2021.
4. Return on equity (ROE) indicates the return generated for the shareholders' equity. Northrop Grumman's ROE peaked in 2021, showing a significant increase from the previous year. However, the ratio declined in the subsequent years, indicating a decrease in the return generated for the shareholders.
Overall, the company's profitability ratios demonstrate variability, with some years showing strong performance while others indicate a decline in profitability. Further analysis of the underlying factors influencing these ratios would be necessary to understand the drivers of these fluctuations.