Northrop Grumman Corp. (NYSE:NOC)

Total Asset Turnover

The reported total asset turnover demonstrated a gradual increase from 0.8 in 2018 to 0.84 in 2022, showing improved efficiency in asset utilization over the period. The adjusted total asset turnover corroborates this trend, rising from 0.77 to 0.84, indicating consistent performance when adjustments are considered.

Current Ratio

The reported current ratio fluctuated over the years, starting at 1.17 in 2018, peaking at 1.6 in 2020, and subsequently declining to 1.08 by 2022. The adjusted current ratio followed a similar pattern, suggesting a temporary enhancement in short-term liquidity in 2020 but a weakening by the end of the period.

Debt to Equity Ratio

A clear downward trend is observable in the reported debt to equity ratio, which decreased from 1.76 in 2018 to 0.84 in 2022, indicating a reduction in financial leverage and increased equity relative to debt. The adjusted debt to equity ratio follows the same pattern but remains slightly higher at each point, consistent with adjustments increasing perceived leverage.

Debt to Capital Ratio

The reported debt to capital ratio steadily declined from 0.64 in 2018 to 0.46 in 2022, suggesting a strengthening of the company’s capital structure with lower reliance on debt financing. Adjusted figures also show a similar decline, moving from 0.66 to 0.5 over the period.

Financial Leverage

Reported financial leverage decreased significantly from 4.6 in 2018 to 2.86 in 2022, implying a reduced dependence on debt and possibly a stronger equity base. Adjusted financial leverage exhibits a near-identical downward trajectory from 4.77 to 2.85.

Net Profit Margin

The reported net profit margin exhibited volatility, particularly a sharp rise to 19.64% in 2021 before declining to 13.38% in 2022. The lower margins in 2019 and 2020 were followed by a notable recovery, with adjusted net profit margins mirroring this trend but somewhat lower in magnitude during 2021 and 2022.

Return on Equity (ROE)

The reported ROE showed considerable fluctuations, initially declining from 39.44% in 2018 to 25.49% in 2019, increasing to a peak of 54.19% in 2021, and then decreasing to 31.97% in 2022. The adjusted ROE reflects a similar volatility but records a higher peak of 56.75% in 2021 and a more pronounced dip by 2022.

Return on Assets (ROA)

The reported ROA followed a pattern akin to ROE, declining to 5.47% in 2019, increasing sharply to 16.45% in 2021, before retreating to 11.19% in 2022. The adjusted ROA closely aligns with the reported values, with a particularly strong improvement in 2021 at 17.73%, indicating efficient asset use during this year.

Sales

Sales demonstrated a consistent upward trend from 2018 through 2020, increasing from 30,095 million to 36,799 million US dollars. However, in 2021, sales experienced a modest decline to 35,667 million, followed by a slight recovery in 2022, reaching 36,602 million. Overall, sales generally display growth over the five-year period with a temporary dip in 2021.

Total assets

Total assets grew steadily from 37,653 million US dollars in 2018 to a peak of 44,469 million in 2020. Thereafter, total assets declined somewhat in 2021 to 42,579 million before increasing slightly to 43,755 million in 2022. The pattern indicates an expansion in asset base initially, with some contraction and stabilization in later years.

Reported total asset turnover

The reported total asset turnover ratio improved gradually, moving from 0.80 in 2018 to 0.84 in both 2021 and 2022. This suggests enhanced efficiency in utilizing assets to generate sales over the timeframe, with relatively stable performance in the final two years.

Adjusted total assets

Adjusted total assets showed a less consistent pattern compared to reported total assets, beginning at 39,317 million in 2018, slightly decreasing to 40,614 million in 2019, then rising to 44,191 million in 2020. A decline followed in 2021 to 42,413 million, with a moderate increase to 43,601 million in 2022. This pattern aligns generally with the reported asset figures, reflecting some adjustments but similar overall trends.

Adjusted total asset turnover

The adjusted total asset turnover ratio increased from 0.77 in 2018 to 0.83 in 2019 and 2020, then slightly improved to 0.84 in 2021 and remained at that level in 2022. This indicates a consistent enhancement in operational efficiency when considering adjusted asset values.

The financial data reveals varying trends in the company's liquidity position over the five-year period ending in 2022. These trends are illustrated by changes in current assets, current liabilities, and both reported and adjusted current ratios.

Current Assets

Current assets displayed an increasing trend from 2018 through 2020, rising from $9,680 million to a peak of $15,344 million, indicating an accumulation of liquid resources during this period. However, in 2021, current assets decreased to $12,426 million and then remained relatively stable into 2022 with a slight increase to $12,488 million.

Current Liabilities

Current liabilities followed an overall upward trajectory. Beginning at $8,274 million in 2018, they increased steadily each year, reaching $11,587 million in 2022. This indicates increasing short-term obligations, with a notable jump from 2021 to 2022.

Reported Current Ratio

The reported current ratio, which measures short-term liquidity, started at 1.17 in 2018 and slightly declined to 1.13 in 2019. It then improved significantly to 1.6 in 2020, reflecting a favorable liquidity position at that time. Subsequently, the ratio declined to 1.3 in 2021 and decreased more sharply to 1.08 in 2022, nearing the threshold of 1, which implies reduced coverage of current liabilities by current assets.

Adjusted Current Assets and Adjusted Current Ratio

Adjusted current assets closely mirrored the trend in reported current assets, with the same peak in 2020 ($15,377 million) and a similar decline afterward. Correspondingly, the adjusted current ratio tracked closely with the reported ratio, peaking at 1.61 in 2020 before declining to 1.08 in 2022. This consistency confirms that adjustments made to current assets did not significantly alter the liquidity ratio outcomes.

In summary, the company experienced growth in its current assets and liquidity position through 2020, achieving optimal liquidity ratios that year. However, post-2020, there was a reversal characterized by decreasing current assets alongside rising current liabilities, resulting in diminishing current ratios. The 2022 current ratio nearing 1.08 indicates a potential tightening of available current assets to meet short-term liabilities, which may warrant attention to ensure continued liquidity strength.

The financial data over the five-year period reveals several key trends in the company’s capital structure and leverage ratios. Total debt exhibited some fluctuation but generally trended downward from 2018 to 2021, decreasing from 14,400 million US dollars in 2018 to 12,783 million in 2021, before slightly increasing to 12,877 million in 2022. Meanwhile, shareholders’ equity showed consistent and significant growth each year, rising from 8,187 million in 2018 to 15,312 million in 2022.

As a result of these movements, the reported debt to equity ratio decreased steadily from 1.76 in 2018 to 0.84 in 2022. This indicates an improving equity base relative to debt, suggesting a strengthening financial position and reduced leverage risk over the period.

When considering the adjusted figures, which presumably incorporate additional adjustments such as off-balance sheet liabilities or other financial considerations, a similar pattern is observed. Adjusted total debt declined from 16,124 million in 2018 to 14,657 million in 2021 before a slight rise to 15,000 million in 2022. Adjusted shareholders’ equity increased progressively from 8,235 million in 2018 to 15,290 million in 2022. Consequently, the adjusted debt to equity ratio experienced a meaningful reduction from 1.96 in 2018 to 0.98 in 2022, reinforcing the trend of decreasing leverage when considering a broader definition of debt and equity.

Overall, the data indicates a deliberate strategy to strengthen the equity base while maintaining or moderately reducing debt levels, resulting in improved debt to equity ratios and a potentially more resilient capital structure as of the end of 2022.

The financial data reveals several notable trends in the company's debt and capital structure over the five-year period from 2018 to 2022.

Total Debt and Capital

Total debt showed a slightly fluctuating pattern, starting at $14,400 million in 2018, decreasing to $13,879 million in 2019, rising to a peak of $15,003 million in 2020, and then declining to approximately $12,877 million by 2022. Total capital exhibited a consistent upward trajectory, increasing from $22,587 million in 2018 to $28,189 million in 2022, indicating growth in the company's overall capital base.

Debt to Capital Ratios (Reported)

The reported debt to capital ratio steadily decreased from 0.64 in 2018 to 0.46 in 2022. This trend signifies a gradually improving capital structure, with the company relying less on debt relative to its total capital over time.

Adjusted Debt and Capital

Adjusted total debt values mirror the general trend of reported total debt but are consistently higher, reflecting adjustments not detailed here. Adjusted total debt rose from $16,124 million in 2018 to $16,609 million in 2020 before declining to $15,000 million in 2022. Concurrently, adjusted total capital increased from $24,359 million in 2018 to $30,290 million in 2022, showing similar growth to the reported total capital figures but on a slightly larger scale.

Adjusted Debt to Capital Ratios

The adjusted debt to capital ratio also demonstrated a downward trend, decreasing from 0.66 in 2018 to 0.50 in 2022. This supports the observation that, even after adjustments, the company has been reducing its reliance on debt financing relative to its capital over the period analyzed.

Overall, the data indicates a positive movement toward strengthening the company’s balance sheet by increasing capital and managing debt levels prudently. The decreasing debt to capital ratios suggest improved financial stability and potentially enhanced creditworthiness in recent years.

The data reflects the financial position and leverage trends over a five-year period. Several notable changes can be observed in the company's asset base, equity, and leverage ratios.

Total assets

Total assets increased from US$37,653 million at the end of 2018 to US$44,755 million by the end of 2022. This shows a general growth in the asset base, though there was a slight decline in 2021 compared to 2020, indicating a potential reallocation or decrease in asset holdings during that year.

Shareholders’ equity

Shareholders’ equity has grown steadily and significantly, rising from US$8,187 million in 2018 to US$15,312 million in 2022. This consistent increase suggests improving net worth and value accumulation for shareholders, reinforcing a strengthening capital base over the period.

Reported financial leverage

The reported financial leverage ratio decreased notably from 4.6 in 2018 to 2.86 in 2022. This downward trend indicates a marked reduction in reliance on debt relative to shareholders’ equity, pointing to reduced financial risk and a more conservative capital structure by the end of the period.

Adjusted total assets

Adjusted total assets follow a similar pattern to the reported assets, starting at US$39,317 million in 2018 and ending at US$43,601 million in 2022. Fluctuations mirror those seen in total assets, including a slight dip in 2021, reflecting adjustments that may account for valuation or accounting considerations.

Adjusted shareholders’ equity

Adjusted shareholders’ equity also shows a strong upward trajectory, from US$8,235 million in 2018 to US$15,290 million in 2022. The growth is consistent with reported equity, supporting the narrative of increasing net value.

Adjusted financial leverage

The adjusted financial leverage ratio exhibits a declining trend from 4.77 in 2018 to 2.85 in 2022, paralleling the reported leverage metric. This emphasizes the company's reduced dependency on external financing under adjusted calculations as well.

Overall, the financial data indicates an expansion in asset and equity values alongside a significant deleveraging movement during the analyzed period. The strengthening equity base and lower leverage suggest a strategic emphasis on improving financial stability and reducing risk exposure. This trend of conservative capital management and asset growth may positively impact future financial flexibility and resilience.

The financial data displays variations across a five-year period in several key metrics including net earnings, sales, and profit margins, both reported and adjusted.

Net Earnings

Reported net earnings fluctuated notably, starting at 3,229 million USD in 2018 and declining to 2,248 million USD in 2019. This was followed by a recovery to 3,189 million in 2020, a significant increase in 2021 to 7,005 million, then a decline to 4,896 million in 2022. The peak in 2021 suggests an exceptional year compared to the others in the timeframe.

Sales

Sales showed a steady upward trend from 30,095 million USD in 2018 to 36,799 million in 2020. There was a slight dip in 2021 to 35,667 million, followed by a small increase to 36,602 million in 2022. Overall, the sales figures indicate a generally positive trend with minor fluctuations.

Reported Net Profit Margin

The reported net profit margin decreased from 10.73% in 2018 to 6.64% in 2019, then increased to 8.67% in 2020. It peaked at 19.64% in 2021, coinciding with the highest net earnings, and then decreased to 13.38% in 2022. This pattern mirrors the net earnings trend, reinforcing the significant profitability spike in 2021.

Adjusted Net Earnings

Adjusted net earnings also fluctuated, starting at 3,364 million USD in 2018, dropping to a low in 2019 at 1,734 million, rising substantially to 3,448 million in 2020, peaking at 7,520 million in 2021, and then decreasing to 4,508 million in 2022. The adjustment reflects similar variability as the reported earnings, with 2021 as a standout year.

Adjusted Net Profit Margin

Adjusted net profit margin follows a similar trajectory to the reported margin, moving from 11.18% in 2018 down to 5.12% in 2019, then increasing to 9.37% in 2020 and 21.08% in 2021. The margin subsequently declined to 12.32% in 2022. The adjusted values suggest that exclusions or adjustments significantly influenced the reported margins but maintained the same overall trend.

In summary, the data reveals a general increase in sales over the period with some volatility in profitability measures. The year 2021 stands out with exceptional net earnings and profit margins, indicating a highly profitable year. Both reported and adjusted figures show consistent patterns, highlighting significant variability in earnings quality and margin performance throughout the period examined.

Net Earnings Trends

Net earnings demonstrated fluctuations over the five-year period. Starting at 3,229 million USD in 2018, earnings declined notably in 2019 to 2,248 million USD, recovered in 2020 to 3,189 million USD, peaked in 2021 at 7,005 million USD, and then decreased to 4,896 million USD in 2022. This pattern indicates a significant earnings volatility with a particularly strong performance in 2021.

Shareholders’ Equity Trends

Shareholders' equity exhibited consistent growth from 8,187 million USD in 2018 to 15,312 million USD in 2022, showing an overall positive trend. The equity base nearly doubled across the period, reflecting ongoing retention of earnings or capital inflows supporting the company’s financial stability.

Reported Return on Equity (ROE) Trends

The reported ROE decreased from a high of 39.44% in 2018 to 25.49% in 2019, increased to 30.14% in 2020, sharply increased in 2021 reaching a peak of 54.19%, and then declined in 2022 to 31.97%. These fluctuations mirror the net earnings pattern and indicate changing profitability relative to equity over time.

Adjusted Net Earnings Trends

Adjusted net earnings followed a somewhat similar trajectory as the reported net earnings. The figure fell from 3,364 million USD in 2018 to 1,734 million USD in 2019, rebounded in 2020 to 3,448 million USD, surged to 7,520 million USD in 2021, and then decreased to 4,508 million USD in 2022. The adjustments likely account for non-recurring items, but the underlying earning pattern remains volatile.

Adjusted Shareholders’ Equity Trends

Adjusted shareholders’ equity also increased steadily from 8,235 million USD in 2018 to 15,290 million USD in 2022. The growth is consistent with the reported equity, indicating stable equity valuation even after adjustments.

Adjusted Return on Equity (ROE) Trends

The adjusted ROE showed significant variability, starting at 40.85% in 2018, dropping sharply to 20.78% in 2019, rising to 33.47% in 2020, peaking at 56.75% in 2021, and then decreasing to 29.48% in 2022. This pattern reflects adjusted earnings’ influence on profitability metrics, with the highest profitability year being 2021 followed by a moderation in 2022.

Overall Analysis

The company exhibited substantial fluctuations in earnings and profitability measures over the examined years, with a notably strong performance in 2021 followed by a contraction in 2022. Meanwhile, the equity base grew steadily year over year, supporting sustained financial strength. The variations in ROE, both reported and adjusted, align with earnings volatility but indicate high efficiency in utilizing equity during peak periods. The adjusted metrics confirm that the core operational performance mirrored the reported results, suggesting earnings variability is consistent even after removing non-recurring effects.

Net Earnings

Net earnings exhibited variability over the analyzed period. Starting at $3,229 million at the end of 2018, there was a decline to $2,248 million in 2019. This was followed by a recovery and increase to $3,189 million in 2020. A significant surge occurred in 2021, reaching $7,005 million, before declining to $4,896 million in 2022. This pattern indicates a strong peak in profitability in 2021, with a subsequent reduction yet maintaining a higher level than the initial years.

Total Assets

Total assets showed a general increasing trend from $37,653 million in 2018 to $44,755 million in 2022. The highest level was recorded in 2020 at $44,469 million, followed by a slight decrease in 2021 to $42,579 million, and a modest rebound in 2022. The asset base appears relatively stable with incremental growth overall during the period.

Reported Return on Assets (ROA)

The reported ROA fluctuated considerably, descending from 8.58% in 2018 to a low of 5.47% in 2019. It then rebounded to 7.17% in 2020 and increased sharply to 16.45% in 2021, reflecting exceptional profitability relative to assets during that year. In 2022, it moderated to 11.19%, which remains substantially above the earlier years, suggesting improved asset efficiency compared to the beginning of the period.

Adjusted Net Earnings

Adjusted net earnings followed a pattern similar to net earnings but with more pronounced fluctuations. It decreased from $3,364 million in 2018 to $1,734 million in 2019, then recovered to $3,448 million in 2020. In 2021, adjusted net earnings peaked sharply at $7,520 million, the highest in the period, before falling to $4,508 million in 2022. This volatility may indicate the impact of adjustments related to non-recurring items or accounting changes.

Adjusted Total Assets

Adjusted total assets remained relatively steady, starting at $39,317 million in 2018 and finishing at $43,601 million in 2022. The values peaked around 2020 similar to reported total assets, then dipped slightly in 2021 before rising again in 2022. Adjusted assets closely mirror the trend of reported assets with minor variation, reinforcing an overall stable asset base.

Adjusted Return on Assets (Adjusted ROA)

Adjusted ROA demonstrated significant volatility and strong recovery patterns. It started at 8.56% in 2018, dropped sharply to 4.27% in 2019, then increased to 7.80% in 2020. A pronounced increase to 17.73% occurred in 2021, surpassing reported ROA, followed by a decline to 10.34% in 2022. This trend underscores a peak in asset profitability in 2021, with the adjusted figures suggesting a slightly more optimistic earnings performance relative to asset base than the reported data.