Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
Northrop Grumman Corp., common-size consolidated balance sheet: liabilities and stockholders’ equity
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).
The capital structure of the entity has undergone a significant shift toward a lower leverage profile between 2018 and 2022. Total liabilities decreased from 78.26% to 65.01% of total liabilities and shareholders’ equity, while total shareholders’ equity increased from 21.74% to 34.99% over the same period. This indicates a strategic migration from debt-based financing toward equity-based funding, driven primarily by internal profit retention.
- Non-Current Liability Trends
- Non-current liabilities experienced a substantial contraction, falling from 56.28% in 2018 to 38.52% in 2022. This decline is most prominently attributed to the reduction in pension and other postretirement benefit plan liabilities, which plummeted from 15.28% to 2.72%. Additionally, long-term debt, net of current portions, followed a consistent downward trajectory, decreasing from 36.87% to 26.98% of the total balance sheet.
- Current Liability Dynamics
- In contrast to non-current obligations, current liabilities increased from 21.97% in 2018 to 26.48% in 2022. A key driver of this increase is the growth in advance payments and billings in excess of costs incurred, which rose from 5.09% to 8.25%, suggesting an increase in contract-based prepayments. Other current liability components, such as trade accounts payable and accrued employee compensation, remained relatively stable throughout the five-year period.
- Equity Composition and Growth
- The expansion of shareholders' equity was driven almost exclusively by an increase in retained earnings, which grew from 21.43% in 2018 to 34.99% in 2022. This suggests a strong capacity for organic capital accumulation. Common stock and paid-in capital represented a negligible and slightly declining portion of the total balance sheet. Accumulated other comprehensive loss showed a marginal increase in negative impact, moving from -0.14% to -0.35%.
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