Northrop Grumman Corporation (NOC)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Operating income	US$ in thousands	4,370,000	2,537,000	3,601,000	5,651,000	4,065,000
Total assets	US$ in thousands	49,359,000	46,544,000	43,755,000	42,579,000	44,469,000
Operating ROA		8.85%	5.45%	8.23%	13.27%	9.14%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $4,370,000K ÷ $49,359,000K
= 8.85%

Northrop Grumman Corporation's operating return on assets (ROA) measures the company's efficiency in generating operating income relative to its total assets.

From 2020 to 2021, the operating ROA increased significantly from 9.14% to 13.27%, indicating improved operational efficiency and profitability. This could be attributed to enhanced cost management, revenue growth, or more effective utilization of assets.

However, from 2021 to 2022, there was a noticeable decline in the operating ROA from 13.27% to 8.23%. This decrease suggests potential challenges or inefficiencies in managing operating expenses or generating sufficient operating income relative to the assets employed by the company during that period.

In 2023, the operating ROA further decreased to 5.45%, indicating a continued decline in operating efficiency compared to the prior years. This may raise concerns about the company's operational performance and utilization of assets.

The operating ROA slightly improved in 2024 to 8.85%, showing a partial recovery in operating efficiency. However, it is still lower than the peak achieved in 2021.

In summary, Northrop Grumman Corporation's operating ROA has shown fluctuations over the years, with significant growth followed by declines and a subsequent partial recovery. It is essential for the company to closely monitor its operational efficiency, asset utilization, and profitability to sustain and enhance its overall financial performance in the future.