Northrop Grumman Corporation (NOC)

Return on total capital

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	2,537,000	3,836,000	3,664,000	3,651,000	3,601,000	3,437,000	3,636,000	3,726,000	5,651,000	6,061,000	6,003,000	5,953,000	4,065,000	4,049,000	4,015,000	3,967,000	3,969,000	3,776,000	3,997,000	3,868,000
Long-term debt	US$ in thousands	13,786,000	13,793,000	13,796,000	13,770,000	11,805,000	11,803,000	12,834,000	12,825,000	12,777,000	12,774,000	12,764,000	12,764,000	14,261,000	14,260,000	14,259,000	14,299,000	12,770,000	15,200,000	15,400,000	14,800,000
Total stockholders’ equity	US$ in thousands	14,795,000	15,928,000	15,486,000	15,136,000	15,312,000	13,943,000	13,651,000	13,287,000	12,926,000	11,417,000	11,172,000	10,525,000	10,579,000	10,467,000	9,712,000	9,062,000	8,819,000	9,731,000	9,214,000	8,739,000
Return on total capital		8.88%	12.91%	12.51%	12.63%	13.28%	13.35%	13.73%	14.27%	21.99%	25.05%	25.08%	25.56%	16.36%	16.37%	16.75%	16.98%	18.38%	15.15%	16.24%	16.43%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $2,537,000K ÷ ($13,786,000K + $14,795,000K)
= 8.88%

Northrop Grumman Corp.'s return on total capital has shown a downward trend from 14.27% as of March 31, 2022, to 8.88% as of December 31, 2023. This decline indicates a decrease in the company's ability to generate returns from its total capital investment. It is essential for the company to closely examine the factors contributing to this decline and consider implementing strategies to improve the efficiency of its capital allocation and utilization. Additionally, the company may need to reevaluate its investment decisions and operational performance to enhance its return on total capital in the future.