Northrop Grumman Corp. (NYSE:NOC)

The data reveals fluctuations in the current assets and adjusted current assets over the five-year period.

Current assets

The value of current assets increased from $9,680 million in 2018 to a peak of $15,344 million in 2020, indicating a significant buildup of short-term resources. However, after 2020, current assets declined to $12,426 million in 2021 and remained relatively stable at $12,488 million in 2022.

Adjusted current assets

Adjusted current assets follow a very similar trend to current assets, starting at $9,714 million in 2018 and rising to $15,377 million in 2020. Subsequently, they decreased to $12,460 million in 2021 and remained almost unchanged at $12,496 million in 2022. The close alignment between current assets and adjusted current assets suggests consistency in the adjustments applied.

Overall, the pattern indicates a peak in available short-term assets in 2020, followed by a contraction and stabilization in the following two years. This shift may reflect changes in operating conditions, asset management strategies, or shifts in liquidity requirements during the later years. The stability in 2021 and 2022 suggests a new operational level or strategic approach to managing current assets after the peak.

Total assets

The total assets showed a general upward trend from 2018 through 2020, increasing from 37,653 million US dollars to 44,469 million US dollars. However, in 2021 there was a slight decrease to 42,579 million US dollars, followed by a modest recovery in 2022, reaching 43,755 million US dollars. This pattern suggests an overall growth in asset base over the five-year period with a minor dip in the penultimate year.

Adjusted total assets

Adjusted total assets exhibited a similar trend to total assets, starting at 39,317 million US dollars in 2018 and rising to 44,191 million US dollars by 2020. In 2021, adjusted assets declined to 42,413 million US dollars, slightly less than the previous year, and then increased again to 43,601 million US dollars in 2022. The fluctuations mirror those seen in total assets, indicating that adjustments to asset values followed the general market or operational conditions affecting the total assets.

The analysis of the financial data reveals certain trends in the company's liabilities over the five-year period ending in 2022. Total liabilities initially increased from 29,466 million US dollars at the end of 2018 to a peak of 33,890 million US dollars by the end of 2020. This was followed by a consistent decrease in the subsequent years, with total liabilities declining to 29,653 million US dollars in 2021 and further down to 28,443 million US dollars in 2022.

Similarly, adjusted total liabilities followed a comparable pattern. Starting at 31,082 million US dollars in 2018, they increased to 33,890 million US dollars by 2020. However, a notable reduction occurred afterward, with values decreasing to 29,163 million US dollars in 2021 and then to 28,311 million US dollars in 2022.

Trend Analysis

Both total and adjusted total liabilities exhibited an upward trend from 2018 through 2020, indicating a period of increased obligation, possibly due to expansion, investment, or other strategic initiatives during these years.

From 2020 onwards, there is clear evidence of deleveraging or liability reduction efforts, as shown by the declining figures in the final two reported years.

The decline in liabilities from 2020 to 2022 may suggest improved financial management, debt repayment, or changes in capital structure, contributing to a potentially stronger balance sheet position.

Overall, the data highlights a cycle of rising liabilities leading up to 2020, followed by a steady decrease, reflecting a strategic shift or reaction to changing economic or operational conditions that influenced the company's financial obligations during this timeframe.

Shareholders’ Equity

The shareholders’ equity has demonstrated a consistent upward trend over the five-year period from 2018 to 2022. It increased from US$ 8,187 million at the end of 2018 to US$ 15,312 million by the end of 2022. This reflects a notable growth in the company’s net assets attributable to shareholders, with a cumulative rise of approximately 87% over the period. The year-over-year increments suggest steady capital retention and/or profitability contributing to equity growth.

Adjusted Shareholders’ Equity

The adjusted shareholders’ equity mirrors the pattern of the reported shareholders’ equity with consistent growth throughout the period. Beginning at US$ 8,235 million in 2018, it shows a minor deviation compared to the reported equity but follows the same increasing trajectory, reaching US$ 15,290 million by the end of 2022. The adjusted figures underscore a similar magnitude of equity enhancement, albeit with slight adjustments, possibly reflecting accounting or valuation modifications. The parallel trend between adjusted and reported equity indicates stable underlying financial strength without significant volatility introduced by adjustments.

Trend Analysis

Overall, the financial data indicates a strong and steady enhancement of the company’s equity base over the analyzed period. The increments in both reported and adjusted shareholders’ equity suggest consistent profitability, capital accumulation, or positive revaluation effects that strengthen the firm's financial position. The difference between reported and adjusted equity is marginal, implying that adjustments do not substantially alter the financial standing over time. This positive equity trend is a key indicator of improved financial health and shareholder value creation.

Total reported debt

The total reported debt exhibited some fluctuation over the five-year period. It started at $14,400 million in 2018, slightly decreased to $13,879 million in 2019, then increased to a peak of $15,003 million in 2020. Following this peak, debt declined to $12,783 million by 2021 before a minor rise to $12,877 million in 2022. Overall, the debt level saw a moderate decrease from 2018 to 2022.

Shareholders’ equity

Shareholders’ equity showed a consistent upward trend throughout the period. Beginning at $8,187 million in 2018, it grew steadily each year, reaching $15,312 million by the end of 2022. This represents a significant strengthening of equity, nearly doubling over five years.

Total reported capital

Total reported capital followed a gradual increasing pattern, rising from $22,587 million in 2018 to $28,189 million in 2022. The growth was mostly steady, reflecting the combined impacts of changing debt and equity balances, with notable acceleration coinciding with the equity growth.

Adjusted total debt

Adjusted total debt closely mirrored the trends of total reported debt but maintained slightly higher values across all years. It began at $16,124 million in 2018, decreased to $15,448 million in 2019, increased to $16,609 million in 2020, and then declined more markedly to $14,657 million in 2021. In 2022, it saw a minor rise to $15,000 million. The overall movement indicates a similar pattern of moderate volatility with a general downward trend.

Adjusted shareholders’ equity

Adjusted shareholders’ equity also reflected a steady increase, moving from $8,235 million in 2018 to $15,290 million in 2022. The growth trend closely aligns with the reported equity figures, indicating improved financial robustness over the period.

Adjusted total capital

This metric increased consistently from $24,359 million in 2018 to $30,290 million in 2022. The steady growth corresponds with the rises in adjusted equity and the fluctuations in adjusted debt, suggesting an overall expansion of the capital base.

General Insights

The data indicates a strengthening capital structure over the five-year timeframe. While debt levels showed some fluctuation, the downward trend in the latter years coupled with the robust increase in both reported and adjusted shareholders’ equity points to enhanced financial stability. The growing total capital figures reinforce the conclusion of increasing resource availability and potential for supporting future operations or investments.

Net Earnings Trend

Net earnings displayed variability over the five-year period. Starting at 3,229 million US dollars in 2018, there was a decline to 2,248 million in 2019. This was followed by a recovery to 3,189 million in 2020, and a significant increase to 7,005 million in 2021. However, in 2022, net earnings decreased to 4,896 million, indicating a downward adjustment from the prior year's peak.

Adjusted Net Earnings Trend

Adjusted net earnings mirrored the overall pattern of net earnings but showcased higher fluctuations. The adjusted figure decreased from 3,364 million US dollars in 2018 to 1,734 million in 2019, representing the lowest point in the observed period. A rebound to 3,448 million occurred in 2020, followed by a sharp increase to 7,520 million in 2021. The year 2022 saw a decline to 4,508 million, which, while a reduction from 2021, remained above the levels recorded in 2018 through 2020.

Insights

The data reveals a pattern of significant earnings volatility, particularly with notable declines in 2019 for both net and adjusted net earnings. These figures then showed a strong recovery and exceptional growth in 2021 before tapering off in 2022. The adjusted net earnings consistently tracked close to the net earnings but displayed slightly more sensitivity to the fluctuations year over year.