Analysis of Property, Plant and Equipment
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- Income Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2005
- Debt to Equity since 2005
- Price to Operating Profit (P/OP) since 2005
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Property, Plant and Equipment Disclosure
Northrop Grumman Corp., balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Land and land improvements
- The value of land and land improvements remained relatively stable from 2018 to 2021, fluctuating slightly between 619 and 636 million US dollars. However, a notable increase occurred in 2022, reaching 741 million, indicating potential acquisitions or revaluations in this category.
- Buildings and improvements
- This category showed a consistent upward trend over the five-year period, rising from 2,139 million US dollars in 2018 to 3,272 million in 2022. The steady annual increments suggest ongoing investments or enhancements in facilities and infrastructure.
- Machinery and other equipment
- The value in machinery and equipment demonstrated a continuous increase each year, moving from 6,618 million in 2018 to 8,774 million in 2022. This pattern reflects significant capital expenditure on operational assets, likely supporting business growth or technological upgrades.
- Capitalized software costs
- Capitalized software costs remained relatively stable between 2018 and 2020, around 600 million US dollars. However, a decline occurred in 2021, dropping to 481 million, followed by a slight recovery to 524 million in 2022. This fluctuation could indicate changes in software development activities or capitalization policies.
- Leasehold improvements
- Leasehold improvements exhibited a steady increase over the period, growing from 1,745 million in 2018 to 2,747 million in 2022. This consistent rise points to ongoing enhancements or extensions of leased properties.
- Property, plant, and equipment, at cost
- The aggregate cost of property, plant, and equipment showed a clear upward trajectory, rising from 11,741 million US dollars in 2018 to 16,058 million in 2022. This reflects substantial investments in long-term assets throughout the period.
- Accumulated depreciation
- Accumulated depreciation increased consistently in absolute terms, moving from -5,369 million in 2018 to -7,258 million in 2022. This trend aligns with the continuous additions to fixed assets and the passage of time, indicating ongoing asset usage and wear.
- Property, plant, and equipment, net
- The net property, plant, and equipment value, after accounting for accumulated depreciation, rose steadily from 6,372 million in 2018 to 8,800 million in 2022. This increase suggests that asset additions outpaced depreciation, resulting in growth of the company's net fixed asset base.
Asset Age Ratios (Summary)
Northrop Grumman Corp., asset age ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Average Age Ratio
- The average age ratio of property, plant, and equipment demonstrates minor fluctuations over the five-year period from 2018 to 2022. Starting at 48.35% in 2018, the ratio slightly declined to 48.18% in 2019.
- In 2020, there was a noticeable increase to 49.58%, representing the peak value within the examined timeframe.
- Subsequently, the ratio decreased to 48.44% in 2021 and continued to decline to its lowest point of 47.39% in 2022.
- Overall, the data indicates a relatively stable average age ratio with a minor upward spike in 2020 followed by a downward trend in the most recent years, suggesting a modest renewal or depreciation pattern in the company's property, plant, and equipment assets.
Average Age
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2022 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, at cost – Land and land improvements)
= 100 × ÷ ( – ) =
- Property, Plant and Equipment at Cost
- There is a consistent upward trend in the property's value over the analyzed period, increasing from $11,741 million in 2018 to $16,058 million in 2022. This indicates ongoing investments or acquisitions in physical assets.
- Accumulated Depreciation
- Accumulated depreciation also shows a steady increase from $5,369 million in 2018 to $7,258 million in 2022. This reflects continuous usage and aging of the assets, consistent with the rising asset base.
- Land and Land Improvements
- Value in land and land improvements remains relatively stable, ranging between $619 million and $741 million, with a slight increase noted in 2022. This stagnation suggests limited new land acquisitions or development over the years.
- Average Age Ratio
- The average age ratio fluctuates mildly but shows a general decline from 48.35% in 2018 to 47.39% in 2022. This suggests the asset base is somewhat being renewed or replaced, reducing the relative average age of the assets despite the overall asset growth.
- Overall Insights
- The data illustrates a pattern of steady asset growth alongside proportional accumulation of depreciation. The relatively stable land values coupled with a slight decrease in average age ratio indicate a strategic approach to asset renewal and maintenance, ensuring the asset base remains productive while expanding.