Northrop Grumman Corporation (NOC)

Financial leverage ratio

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Total assets	US$ in thousands	49,359,000	48,289,000	47,670,000	47,818,000	46,544,000	44,896,000	45,609,000	44,244,000	43,755,000	42,733,000	41,914,000	41,903,000	42,579,000	42,346,000	42,142,000	41,423,000	44,469,000	44,772,000	43,475,000	43,203,000
Total stockholders’ equity	US$ in thousands	15,290,000	14,748,000	14,301,000	14,223,000	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
Financial leverage ratio		3.23	3.27	3.33	3.36	3.15	2.82	2.95	2.92	2.86	3.06	3.07	3.15	3.29	3.71	3.77	3.94	4.20	4.28	4.48	4.77

December 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $49,359,000K ÷ $15,290,000K
= 3.23

The financial leverage ratio of Northrop Grumman Corporation has been gradually decreasing over the past few years, indicating improvements in the company's financial structure and risk profile. The ratio decreased from 4.77 as of March 31, 2020, to 3.23 as of December 31, 2024. This suggests that the company has been gradually reducing its reliance on debt to finance its operations.

A lower financial leverage ratio indicates that the company is relying more on equity financing rather than debt financing. This can be a positive sign as it may reduce the company's financial risk and vulnerability to economic downturns. However, it is important to note that a very low leverage ratio may also signify an underutilization of debt, leading to missed opportunities for growth and potential tax benefits.

Overall, the decreasing trend in Northrop Grumman's financial leverage ratio reflects a prudent approach to managing its capital structure and debt levels, potentially enhancing its financial stability and resilience in the long run.