Northrop Grumman Corporation (NOC)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,537,000 | 3,601,000 | 5,651,000 | 4,065,000 | 3,969,000 |
| Long-term debt | US$ in thousands | 13,786,000 | 11,805,000 | 12,777,000 | 14,261,000 | 12,770,000 |
| Total stockholders’ equity | US$ in thousands | 14,795,000 | 15,312,000 | 12,926,000 | 10,579,000 | 8,819,000 |
| Return on total capital | 8.88% | 13.28% | 21.99% | 16.36% | 18.38% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,537,000K ÷ ($13,786,000K + $14,795,000K)
= 8.88%
Based on the provided data, Northrop Grumman Corp.'s return on total capital has declined from 18.38% in 2019 to 8.88% in 2023. This indicates a decreasing trend in the company's ability to generate returns from its total capital employed. The decreasing trend suggests that the company may be facing challenges in efficiently utilizing its capital investments to generate profits, which could be a concern for investors and stakeholders. It may be worthwhile for the company to evaluate its capital allocation strategies and operational efficiency to improve its return on total capital in the future.
Peer comparison
Dec 31, 2023