Northrop Grumman Corporation (NOC)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 4,370,000 | 2,537,000 | 3,601,000 | 5,651,000 | 4,065,000 |
| Interest expense | US$ in thousands | 113,000 | 95,000 | 53,000 | 556,000 | 593,000 |
| Interest coverage | 38.67 | 26.71 | 67.94 | 10.16 | 6.85 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $4,370,000K ÷ $113,000K
= 38.67
The interest coverage ratio of Northrop Grumman Corporation has shown a positive trend over the past five years. Starting at 6.85 in December 2020, the ratio increased consistently, reaching 10.16 in December 2021, 67.94 in December 2022, 26.71 in December 2023, and finally 38.67 in December 2024.
This upward trend indicates that the company's ability to cover its interest expenses with operating income has improved significantly over the years. A higher interest coverage ratio is generally considered favorable as it suggests that the company has more than enough earnings to meet its interest obligations, indicating financial stability and lower default risk.
However, the significant fluctuations in the interest coverage ratio in some years, particularly the sharp increase in 2022 followed by a decline in 2023, may warrant further investigation into the company's financial strategies and performance during those periods. Overall, Northrop Grumman Corporation's interest coverage ratio demonstrates a positive trajectory, indicating a stronger financial position in recent years.
Peer comparison
Dec 31, 2024