Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Northrop Grumman Corp., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
- Debt to Equity Ratio
- The debt to equity ratio exhibits a general downward trend over the period observed. Starting at 1.99 in early 2018, it declines with some fluctuations, reaching a low of 0.84 in the fourth quarter of 2022 before slightly increasing to 0.98 by the first quarter of 2023. This trend suggests a gradual reduction in reliance on debt relative to equity financing.
- Debt to Equity Including Operating Lease Liability
- When including operating lease liabilities, the debt to equity ratio follows a similar downward path, beginning at 1.99 in March 2018 and reducing to 0.96 by December 2022. There is a minor uptick to 1.10 in March 2023. The inclusion of operating leases consistently results in a higher ratio compared to the standard debt to equity measure, reflecting the impact of recognizing lease liabilities.
- Debt to Capital Ratio
- The debt to capital ratio steadily decreases from 0.67 in the first quarter of 2018 to 0.46 in the last quarter of 2022, with a slight rebound to 0.50 in early 2023. This decline indicates an improving capital structure with proportionally less debt in the capital base over time.
- Debt to Capital Including Operating Lease Liability
- Including operating lease liabilities, the debt to capital ratio remains consistently higher than the standard measure but follows a comparable downward trend. It moves from 0.67 in March 2018 down to 0.49 in December 2022, then rises marginally to 0.52 by March 2023. The inclusion of leases moderately increases reported leverage.
- Debt to Assets Ratio
- The debt to assets ratio shows a gradual decline from 0.44 in early 2018 to about 0.29 at the end of 2022, indicating a lower proportion of assets financed through debt. However, there is a noted increase to 0.34 in the first quarter of 2023, reversing the prior downward trend.
- Debt to Assets Including Operating Lease Liability
- When operating lease liabilities are factored in, this ratio is higher but follows a similar pattern. Starting at 0.44 in 2018, it falls to approximately 0.34 in late 2022, then creeps up to 0.38 in early 2023. Consistently, the inclusion of leases boosts the reported leverage relative to assets.
- Financial Leverage
- Financial leverage exhibits a notable reduction from 4.53 in March 2018 to 2.86 at the end of 2022, suggesting an overall reduction in the use of debt relative to equity. There is a minor increase to 2.92 in the first quarter of 2023, but the long-term trend points to lower leverage.
- Interest Coverage Ratio
- Interest coverage ratios, available from late 2018 onward, demonstrate significant improvement. Values increased from around 7.66 in late 2018 to a peak of 17.08 in the first quarter of 2022, before gradually declining to 12.33 by the first quarter of 2023. This indicates stronger earnings relative to interest expenses over the period, reflecting enhanced ability to service debt.
Debt Ratios
Coverage Ratios
Debt to Equity
Northrop Grumman Corp., debt to equity calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Current portion of long-term debt | 1,082) | 1,072) | 1,069) | 14) | 7) | 6) | 6) | 6) | 42) | 742) | 1,806) | 1,803) | 1,790) | 1,109) | 45) | 545) | 523) | 517) | 517) | 744) | 868) | |||||||
| Long-term debt, net of current portion | 13,770) | 11,805) | 11,803) | 12,834) | 12,825) | 12,777) | 12,774) | 12,764) | 12,764) | 14,261) | 14,260) | 14,259) | 14,299) | 12,770) | 13,826) | 13,838) | 13,863) | 13,883) | 13,889) | 14,387) | 14,392) | |||||||
| Total debt | 14,852) | 12,877) | 12,872) | 12,848) | 12,832) | 12,783) | 12,780) | 12,770) | 12,806) | 15,003) | 16,066) | 16,062) | 16,089) | 13,879) | 13,871) | 14,383) | 14,386) | 14,400) | 14,406) | 15,131) | 15,260) | |||||||
| Shareholders’ equity | 15,136) | 15,312) | 13,943) | 13,651) | 13,287) | 12,926) | 11,417) | 11,172) | 10,525) | 10,579) | 10,467) | 9,712) | 9,062) | 8,819) | 9,731) | 9,214) | 8,739) | 8,187) | 9,103) | 8,227) | 7,680) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to equity1 | 0.98 | 0.84 | 0.92 | 0.94 | 0.97 | 0.99 | 1.12 | 1.14 | 1.22 | 1.42 | 1.53 | 1.65 | 1.78 | 1.57 | 1.43 | 1.56 | 1.65 | 1.76 | 1.58 | 1.84 | 1.99 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 2.04 | 2.33 | 2.34 | 2.35 | 2.20 | 2.29 | 2.21 | 2.23 | 2.30 | 2.42 | 2.55 | 2.81 | 2.61 | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 0.50 | 0.51 | 0.56 | 0.59 | 0.58 | 0.52 | 0.57 | 0.79 | 0.68 | 0.54 | 0.57 | 0.58 | 0.59 | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 0.71 | 0.89 | 0.97 | 0.94 | 0.86 | 0.87 | 1.68 | 1.90 | 2.12 | 2.11 | 2.39 | 2.43 | 2.41 | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 1.13 | 1.17 | 0.96 | 1.09 | 1.05 | 1.06 | 1.19 | 1.19 | 1.19 | 1.28 | 1.23 | 1.22 | 0.91 | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 1.62 | 1.68 | 0.96 | 1.02 | 1.16 | 1.07 | 1.21 | 1.87 | 1.93 | 2.02 | 2.56 | 3.38 | 3.68 | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.47 | 0.44 | 0.48 | 0.45 | 0.43 | 0.43 | 0.44 | 0.44 | 0.44 | 0.44 | 0.48 | 0.49 | 1.18 | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 14,852 ÷ 15,136 = 0.98
2 Click competitor name to see calculations.
The financial data reveals several notable trends in the company's leverage and equity over the observed quarterly periods.
- Total Debt
-
Total debt remained relatively stable between March 2018 and December 2019, fluctuating approximately between $14.4 billion and $15.3 billion. Starting from March 2020, total debt initially increased, reaching a peak close to $16.1 billion during mid-2020. Subsequently, it declined notably over 2021 and most of 2022, reaching a low around $12.8 billion by year-end 2022. However, in the first quarter of 2023, total debt increased again to approximately $14.9 billion.
- Shareholders’ Equity
-
Shareholders’ equity demonstrated a generally upward trend throughout the period. From $7.7 billion in March 2018, equity increased steadily with some quarter-to-quarter fluctuations. Notable growth occurred between December 2020 and December 2022, where equity rose from about $10.6 billion to over $15.3 billion in March 2023. This indicates a strengthening equity base over the five-year span.
- Debt to Equity Ratio
-
The debt to equity ratio exhibited a downward trend, particularly noticeable from early 2018 levels near 2.0. This ratio gradually decreased, indicating a reduction in leverage relative to equity. By December 2021, the ratio dropped below 1.0, reaching a low of around 0.84 in March 2023, suggesting improved financial stability and a stronger equity position relative to debt. The slight uptick to 0.98 in the first quarter of 2023 corresponds with the recent increase in total debt, but the ratio remains significantly lower than in 2018, reflecting a generally deleveraged balance sheet.
Overall, the data indicates that while the company experienced some variation in total debt, its equity growth outpaced debt increases, resulting in a consistently declining debt to equity ratio. This trend suggests a deliberate strategy toward reducing leverage and strengthening the capital structure over time, enhancing financial resilience.
Debt to Equity (including Operating Lease Liability)
Northrop Grumman Corp., debt to equity (including operating lease liability) calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Current portion of long-term debt | 1,082) | 1,072) | 1,069) | 14) | 7) | 6) | 6) | 6) | 42) | 742) | 1,806) | 1,803) | 1,790) | 1,109) | 45) | 545) | 523) | 517) | 517) | 744) | 868) | |||||||
| Long-term debt, net of current portion | 13,770) | 11,805) | 11,803) | 12,834) | 12,825) | 12,777) | 12,774) | 12,764) | 12,764) | 14,261) | 14,260) | 14,259) | 14,299) | 12,770) | 13,826) | 13,838) | 13,863) | 13,883) | 13,889) | 14,387) | 14,392) | |||||||
| Total debt | 14,852) | 12,877) | 12,872) | 12,848) | 12,832) | 12,783) | 12,780) | 12,770) | 12,806) | 15,003) | 16,066) | 16,062) | 16,089) | 13,879) | 13,871) | 14,383) | 14,386) | 14,400) | 14,406) | 15,131) | 15,260) | |||||||
| Non-current operating lease liabilities | 1,789) | 1,824) | 1,696) | 1,654) | 1,661) | 1,590) | 1,367) | 1,389) | 1,354) | 1,343) | 1,292) | 1,333) | 1,280) | 1,308) | 1,304) | 1,081) | 1,098) | —) | —) | —) | —) | |||||||
| Total debt (including operating lease liability) | 16,641) | 14,701) | 14,568) | 14,502) | 14,493) | 14,373) | 14,147) | 14,159) | 14,160) | 16,346) | 17,358) | 17,395) | 17,369) | 15,187) | 15,175) | 15,464) | 15,484) | 14,400) | 14,406) | 15,131) | 15,260) | |||||||
| Shareholders’ equity | 15,136) | 15,312) | 13,943) | 13,651) | 13,287) | 12,926) | 11,417) | 11,172) | 10,525) | 10,579) | 10,467) | 9,712) | 9,062) | 8,819) | 9,731) | 9,214) | 8,739) | 8,187) | 9,103) | 8,227) | 7,680) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to equity (including operating lease liability)1 | 1.10 | 0.96 | 1.04 | 1.06 | 1.09 | 1.11 | 1.24 | 1.27 | 1.35 | 1.55 | 1.66 | 1.79 | 1.92 | 1.72 | 1.56 | 1.68 | 1.77 | 1.76 | 1.58 | 1.84 | 1.99 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||||||||||||||||||||||||
| Eaton Corp. plc | 0.53 | 0.53 | 0.59 | 0.62 | 0.60 | 0.54 | 0.59 | 0.81 | 0.70 | 0.56 | 0.59 | 0.61 | 0.62 | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.50 | 0.46 | 0.50 | 0.47 | 0.46 | 0.45 | 0.46 | 0.46 | 0.46 | 0.46 | 0.50 | 0.51 | 1.23 | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 16,641 ÷ 15,136 = 1.10
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends regarding the company's debt, equity, and leverage position over the observed periods.
- Total Debt (including operating lease liability)
- Over the span from the first quarter of 2018 through the first quarter of 2023, total debt exhibits fluctuations with an overall increasing tendency. Initially, debt levels decline moderately from 15,260 million USD in March 2018 to around 14,400 million USD by the end of 2018. However, starting in early 2020, total debt increases substantially, peaking at 17,395 million USD in June 2020. Thereafter, the debt declines steadily, reaching approximately 14,373 million USD by the end of 2021, before slightly rising again towards early 2023, reaching 16,641 million USD in March 2023.
- Shareholders’ Equity
- The shareholders' equity demonstrates a consistent upward trajectory throughout the period under review. Beginning at 7,680 million USD in the first quarter of 2018, equity grows progressively to exceed 15,000 million USD by the first quarter of 2023. This growth trend shows relative stability with no observed periods of significant decline, indicating strengthening net assets and potentially improved retained earnings or capital inflows.
- Debt to Equity Ratio (including operating lease liability)
- The debt-to-equity ratio reflects the company's leverage dynamics, showing a clear trend of decreasing leverage over time until late 2022, followed by a minor reversal. Starting from a high ratio of 1.99 in the first quarter of 2018, the leverage ratio reduces steadily to a low of 0.96 by the fourth quarter of 2022, indicating that the company has improved its equity base relative to its debt. However, there is a slight increase to 1.10 in the first quarter of 2023, reflecting a modest uptick in leverage, consistent with the recent rise in total debt.
In summary, the company has managed to grow its shareholders' equity consistently, which has generally led to a deleveraging effect over the five-year period. Despite periods of increased total debt, particularly around 2020, equity growth has outpaced debt increases, resulting in a declining debt-to-equity ratio overall. The recent increase in debt and corresponding leverage in early 2023 merits attention, as it may indicate changes in financing strategy or capital structure priorities.
Debt to Capital
Northrop Grumman Corp., debt to capital calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Current portion of long-term debt | 1,082) | 1,072) | 1,069) | 14) | 7) | 6) | 6) | 6) | 42) | 742) | 1,806) | 1,803) | 1,790) | 1,109) | 45) | 545) | 523) | 517) | 517) | 744) | 868) | |||||||
| Long-term debt, net of current portion | 13,770) | 11,805) | 11,803) | 12,834) | 12,825) | 12,777) | 12,774) | 12,764) | 12,764) | 14,261) | 14,260) | 14,259) | 14,299) | 12,770) | 13,826) | 13,838) | 13,863) | 13,883) | 13,889) | 14,387) | 14,392) | |||||||
| Total debt | 14,852) | 12,877) | 12,872) | 12,848) | 12,832) | 12,783) | 12,780) | 12,770) | 12,806) | 15,003) | 16,066) | 16,062) | 16,089) | 13,879) | 13,871) | 14,383) | 14,386) | 14,400) | 14,406) | 15,131) | 15,260) | |||||||
| Shareholders’ equity | 15,136) | 15,312) | 13,943) | 13,651) | 13,287) | 12,926) | 11,417) | 11,172) | 10,525) | 10,579) | 10,467) | 9,712) | 9,062) | 8,819) | 9,731) | 9,214) | 8,739) | 8,187) | 9,103) | 8,227) | 7,680) | |||||||
| Total capital | 29,988) | 28,189) | 26,815) | 26,499) | 26,119) | 25,709) | 24,197) | 23,942) | 23,331) | 25,582) | 26,533) | 25,774) | 25,151) | 22,698) | 23,602) | 23,597) | 23,125) | 22,587) | 23,509) | 23,358) | 22,940) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to capital1 | 0.50 | 0.46 | 0.48 | 0.48 | 0.49 | 0.50 | 0.53 | 0.53 | 0.55 | 0.59 | 0.61 | 0.62 | 0.64 | 0.61 | 0.59 | 0.61 | 0.62 | 0.64 | 0.61 | 0.65 | 0.67 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||||||||||||
| Boeing Co. | 1.39 | 1.39 | 1.45 | 1.35 | 1.36 | 1.35 | 1.30 | 1.36 | 1.40 | 1.40 | 1.24 | 1.23 | 1.33 | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 0.67 | 0.70 | 0.70 | 0.70 | 0.69 | 0.70 | 0.69 | 0.69 | 0.70 | 0.71 | 0.72 | 0.74 | 0.72 | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 0.34 | 0.34 | 0.36 | 0.37 | 0.37 | 0.34 | 0.36 | 0.44 | 0.40 | 0.35 | 0.36 | 0.37 | 0.37 | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 0.41 | 0.47 | 0.49 | 0.48 | 0.46 | 0.47 | 0.63 | 0.65 | 0.68 | 0.68 | 0.70 | 0.71 | 0.71 | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 0.53 | 0.54 | 0.49 | 0.52 | 0.51 | 0.51 | 0.54 | 0.54 | 0.54 | 0.56 | 0.55 | 0.55 | 0.48 | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 0.62 | 0.63 | 0.49 | 0.50 | 0.54 | 0.52 | 0.55 | 0.65 | 0.66 | 0.67 | 0.72 | 0.77 | 0.79 | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.32 | 0.31 | 0.32 | 0.31 | 0.30 | 0.30 | 0.30 | 0.31 | 0.31 | 0.31 | 0.32 | 0.33 | 0.54 | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 14,852 ÷ 29,988 = 0.50
2 Click competitor name to see calculations.
- Total Debt
-
Total debt remained relatively stable between March 2018 and December 2019, fluctuating around the 14,400 to 15,300 million USD range.
There was a notable increase in total debt starting in the first quarter of 2020, peaking in December 2020 at around 16,000 million USD, reflecting a rise likely tied to external factors or strategic decisions.
Following this peak, there was a consistent decline through 2021 and most of 2022, with total debt reaching a low of approximately 12,780 million USD in the fourth quarter of 2021 and holding near that level through most of 2022.
However, in the first quarter of 2023, total debt increased again to approximately 14,850 million USD, indicating a reversal of the prior downward trend.
- Total Capital
-
Total capital showed some volatility but a general upward trajectory over the five-year period examined.
Between March 2018 and December 2019, values fluctuated within a range near 22,500 to 23,600 million USD, with no clear sustained trend.
From early 2020 onwards, total capital saw a moderate increase overall, with values rising from around 25,100 million USD in March 2020 to nearly 26,200 million USD by December 2021.
In 2022 and early 2023, total capital further increased steadily, reaching approximately 30,000 million USD by the first quarter of 2023, marking a significant growth relative to the prior years.
- Debt to Capital Ratio
-
The debt to capital ratio exhibited a general declining trend from March 2018 to December 2022, indicating a gradual reduction in leverage relative to the company's total capital base.
Initially, the ratio was relatively high, near 0.67 in early 2018, and it decreased consistently over the years to about 0.46 by the end of 2022.
This decline suggests improved capital structure management, with either reductions in debt, increases in capital, or both.
However, in the first quarter of 2023, the ratio rose to 0.50, reflecting a relative increase in debt compared to capital during that period, aligning with the observed increase in total debt and total capital.
- Summary of Trends
-
Overall, the company demonstrated a pattern of managing its leverage by reducing debt relative to total capital over the majority of the review period, especially evident from 2021 through 2022.
After a peak in total debt in 2020, the company appears to have prioritized deleveraging while simultaneously growing its capital base.
The recent rise in total debt and debt-to-capital ratio in early 2023 may reflect new financing decisions or strategic investments, reversing the prior trend of reduced leverage.
The total capital growth indicates an expanding asset or equity base, which could support future operational or investment activities.
Debt to Capital (including Operating Lease Liability)
Northrop Grumman Corp., debt to capital (including operating lease liability) calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Current portion of long-term debt | 1,082) | 1,072) | 1,069) | 14) | 7) | 6) | 6) | 6) | 42) | 742) | 1,806) | 1,803) | 1,790) | 1,109) | 45) | 545) | 523) | 517) | 517) | 744) | 868) | |||||||
| Long-term debt, net of current portion | 13,770) | 11,805) | 11,803) | 12,834) | 12,825) | 12,777) | 12,774) | 12,764) | 12,764) | 14,261) | 14,260) | 14,259) | 14,299) | 12,770) | 13,826) | 13,838) | 13,863) | 13,883) | 13,889) | 14,387) | 14,392) | |||||||
| Total debt | 14,852) | 12,877) | 12,872) | 12,848) | 12,832) | 12,783) | 12,780) | 12,770) | 12,806) | 15,003) | 16,066) | 16,062) | 16,089) | 13,879) | 13,871) | 14,383) | 14,386) | 14,400) | 14,406) | 15,131) | 15,260) | |||||||
| Non-current operating lease liabilities | 1,789) | 1,824) | 1,696) | 1,654) | 1,661) | 1,590) | 1,367) | 1,389) | 1,354) | 1,343) | 1,292) | 1,333) | 1,280) | 1,308) | 1,304) | 1,081) | 1,098) | —) | —) | —) | —) | |||||||
| Total debt (including operating lease liability) | 16,641) | 14,701) | 14,568) | 14,502) | 14,493) | 14,373) | 14,147) | 14,159) | 14,160) | 16,346) | 17,358) | 17,395) | 17,369) | 15,187) | 15,175) | 15,464) | 15,484) | 14,400) | 14,406) | 15,131) | 15,260) | |||||||
| Shareholders’ equity | 15,136) | 15,312) | 13,943) | 13,651) | 13,287) | 12,926) | 11,417) | 11,172) | 10,525) | 10,579) | 10,467) | 9,712) | 9,062) | 8,819) | 9,731) | 9,214) | 8,739) | 8,187) | 9,103) | 8,227) | 7,680) | |||||||
| Total capital (including operating lease liability) | 31,777) | 30,013) | 28,511) | 28,153) | 27,780) | 27,299) | 25,564) | 25,331) | 24,685) | 26,925) | 27,825) | 27,107) | 26,431) | 24,006) | 24,906) | 24,678) | 24,223) | 22,587) | 23,509) | 23,358) | 22,940) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to capital (including operating lease liability)1 | 0.52 | 0.49 | 0.51 | 0.52 | 0.52 | 0.53 | 0.55 | 0.56 | 0.57 | 0.61 | 0.62 | 0.64 | 0.66 | 0.63 | 0.61 | 0.63 | 0.64 | 0.64 | 0.61 | 0.65 | 0.67 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||||||||||||||||||||||||
| Eaton Corp. plc | 0.35 | 0.35 | 0.37 | 0.38 | 0.37 | 0.35 | 0.37 | 0.45 | 0.41 | 0.36 | 0.37 | 0.38 | 0.38 | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.33 | 0.32 | 0.33 | 0.32 | 0.31 | 0.31 | 0.31 | 0.32 | 0.32 | 0.32 | 0.33 | 0.34 | 0.55 | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 16,641 ÷ 31,777 = 0.52
2 Click competitor name to see calculations.
The analyzed financial data reveals notable trends regarding the company’s debt and capital structure over the examined periods from March 2018 to March 2023.
- Total Debt (including operating lease liability)
-
The total debt exhibits fluctuations with an overall increasing trend over the five years. Initially, the debt slightly decreased from $15,260 million in March 2018 to $14,406 million in September 2018. However, it generally remained within a range between approximately $14,000 million and $17,000 million over subsequent quarters. A peak is observed in March 2020 when total debt reached $17,369 million, followed by a decrease toward the end of 2020. From 2021 onwards, the debt level stabilized around $14,000 million to $14,700 million before rising again to $16,641 million by March 2023.
- Total Capital (including operating lease liability)
-
Total capital shows a steady upward trend across the periods. Starting at approximately $22,940 million in March 2018, it consistently grew with minor quarterly fluctuations, surpassing $31,000 million by March 2023. This growth reflects an expansion in the company’s capital base, indicating either an increase in equity, debt, or both components of capital.
- Debt to Capital Ratio (including operating lease liability)
-
The debt to capital ratio declines over the analyzed timeframe, moving from a high of 0.67 in March 2018 to a low near 0.49 in March 2023, with minor deviations in between. This trend suggests a gradual improvement in the company’s capital structure, with debt becoming a smaller proportion of total capital. The ratio’s peak of 0.67 was observed early in the period, followed by a general downward movement reflecting enhanced leverage management or increased equity relative to debt.
Overall, the financial data indicates that while total debt has experienced some volatility and recent increases, the total capital has expanded more consistently, leading to a decreasing debt to capital ratio. This pattern implies a strengthening of the company’s financial position over time, with progressively lower financial leverage relative to its capital base.
Debt to Assets
Northrop Grumman Corp., debt to assets calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Current portion of long-term debt | 1,082) | 1,072) | 1,069) | 14) | 7) | 6) | 6) | 6) | 42) | 742) | 1,806) | 1,803) | 1,790) | 1,109) | 45) | 545) | 523) | 517) | 517) | 744) | 868) | |||||||
| Long-term debt, net of current portion | 13,770) | 11,805) | 11,803) | 12,834) | 12,825) | 12,777) | 12,774) | 12,764) | 12,764) | 14,261) | 14,260) | 14,259) | 14,299) | 12,770) | 13,826) | 13,838) | 13,863) | 13,883) | 13,889) | 14,387) | 14,392) | |||||||
| Total debt | 14,852) | 12,877) | 12,872) | 12,848) | 12,832) | 12,783) | 12,780) | 12,770) | 12,806) | 15,003) | 16,066) | 16,062) | 16,089) | 13,879) | 13,871) | 14,383) | 14,386) | 14,400) | 14,406) | 15,131) | 15,260) | |||||||
| Total assets | 44,244) | 43,755) | 42,733) | 41,914) | 41,903) | 42,579) | 42,346) | 42,142) | 41,423) | 44,469) | 44,772) | 43,475) | 43,203) | 41,089) | 40,553) | 39,584) | 39,751) | 37,653) | 37,943) | 37,378) | 34,795) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to assets1 | 0.34 | 0.29 | 0.30 | 0.31 | 0.31 | 0.30 | 0.30 | 0.30 | 0.31 | 0.34 | 0.36 | 0.37 | 0.37 | 0.34 | 0.34 | 0.36 | 0.36 | 0.38 | 0.38 | 0.40 | 0.44 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||||||||||||
| Boeing Co. | 0.41 | 0.42 | 0.42 | 0.42 | 0.43 | 0.42 | 0.43 | 0.43 | 0.42 | 0.42 | 0.38 | 0.38 | 0.27 | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 0.44 | 0.45 | 0.45 | 0.46 | 0.46 | 0.46 | 0.46 | 0.46 | 0.47 | 0.47 | 0.50 | 0.50 | 0.49 | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 0.25 | 0.25 | 0.26 | 0.28 | 0.27 | 0.25 | 0.27 | 0.33 | 0.30 | 0.25 | 0.26 | 0.27 | 0.27 | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 0.14 | 0.17 | 0.17 | 0.18 | 0.18 | 0.18 | 0.27 | 0.27 | 0.29 | 0.30 | 0.31 | 0.32 | 0.32 | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 0.32 | 0.31 | 0.28 | 0.31 | 0.31 | 0.30 | 0.33 | 0.33 | 0.34 | 0.35 | 0.35 | 0.35 | 0.28 | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 0.29 | 0.29 | 0.22 | 0.22 | 0.23 | 0.23 | 0.23 | 0.23 | 0.24 | 0.24 | 0.25 | 0.26 | 0.26 | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.21 | 0.20 | 0.21 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.33 | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 14,852 ÷ 44,244 = 0.34
2 Click competitor name to see calculations.
- Total Debt
- Over the observed period, total debt exhibited a declining trend from early 2018 through the end of 2019, decreasing from $15,260 million in March 2018 to approximately $13,879 million in December 2019. Starting in 2020, total debt rose sharply, reaching a peak around $16,089 million in March 2020. Following this peak, total debt again decreased significantly, hitting a low of roughly $12,783 million by December 2021. Throughout 2022, the debt levels remained relatively stable, fluctuating slightly around $12,800 million, but in early 2023, there was a noticeable increase, elevating total debt to about $14,852 million by March 2023.
- Total Assets
- Total assets showed a general upward trend from 2018 through most of the reported periods. Beginning at $34,795 million in March 2018, assets increased steadily, surpassing $44,000 million by the end of 2020. However, from early 2021 onward, total assets experienced some volatility with minor fluctuations but largely remained stable around the $41,000 to $44,000 million range. The latest data point in March 2023 shows a continuation of this upward movement, with total assets reaching approximately $44,244 million.
- Debt to Assets Ratio
- The debt to assets ratio consistently declined from 0.44 in March 2018 to about 0.29 by March 2023, indicating an overall reduction in leverage relative to asset size over the period. Initially, the ratio decreased steadily through 2019, reflecting the simultaneous decrease in debt and growth in assets. Although total debt increased significantly in early 2020, the ratio rose only moderately, suggesting asset growth offset some leverage impact. From 2021 through early 2023, the ratio remained stable between 0.29 and 0.31, but the sharp increase in total debt in March 2023 caused a rise in the ratio up to 0.34, indicating a relative increase in leverage at that point.
Debt to Assets (including Operating Lease Liability)
Northrop Grumman Corp., debt to assets (including operating lease liability) calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Current portion of long-term debt | 1,082) | 1,072) | 1,069) | 14) | 7) | 6) | 6) | 6) | 42) | 742) | 1,806) | 1,803) | 1,790) | 1,109) | 45) | 545) | 523) | 517) | 517) | 744) | 868) | |||||||
| Long-term debt, net of current portion | 13,770) | 11,805) | 11,803) | 12,834) | 12,825) | 12,777) | 12,774) | 12,764) | 12,764) | 14,261) | 14,260) | 14,259) | 14,299) | 12,770) | 13,826) | 13,838) | 13,863) | 13,883) | 13,889) | 14,387) | 14,392) | |||||||
| Total debt | 14,852) | 12,877) | 12,872) | 12,848) | 12,832) | 12,783) | 12,780) | 12,770) | 12,806) | 15,003) | 16,066) | 16,062) | 16,089) | 13,879) | 13,871) | 14,383) | 14,386) | 14,400) | 14,406) | 15,131) | 15,260) | |||||||
| Non-current operating lease liabilities | 1,789) | 1,824) | 1,696) | 1,654) | 1,661) | 1,590) | 1,367) | 1,389) | 1,354) | 1,343) | 1,292) | 1,333) | 1,280) | 1,308) | 1,304) | 1,081) | 1,098) | —) | —) | —) | —) | |||||||
| Total debt (including operating lease liability) | 16,641) | 14,701) | 14,568) | 14,502) | 14,493) | 14,373) | 14,147) | 14,159) | 14,160) | 16,346) | 17,358) | 17,395) | 17,369) | 15,187) | 15,175) | 15,464) | 15,484) | 14,400) | 14,406) | 15,131) | 15,260) | |||||||
| Total assets | 44,244) | 43,755) | 42,733) | 41,914) | 41,903) | 42,579) | 42,346) | 42,142) | 41,423) | 44,469) | 44,772) | 43,475) | 43,203) | 41,089) | 40,553) | 39,584) | 39,751) | 37,653) | 37,943) | 37,378) | 34,795) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Debt to assets (including operating lease liability)1 | 0.38 | 0.34 | 0.34 | 0.35 | 0.35 | 0.34 | 0.33 | 0.34 | 0.34 | 0.37 | 0.39 | 0.40 | 0.40 | 0.37 | 0.37 | 0.39 | 0.39 | 0.38 | 0.38 | 0.40 | 0.44 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||||||||||||||||||||||||
| Eaton Corp. plc | 0.26 | 0.26 | 0.28 | 0.29 | 0.28 | 0.26 | 0.28 | 0.34 | 0.31 | 0.26 | 0.28 | 0.28 | 0.28 | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.22 | 0.21 | 0.22 | 0.21 | 0.21 | 0.21 | 0.21 | 0.21 | 0.21 | 0.21 | 0.21 | 0.21 | 0.35 | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 16,641 ÷ 44,244 = 0.38
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable trends in the company's leverage and asset base over the reviewed periods.
- Total Debt (including operating lease liability)
- The total debt fluctuated over the examined time frame. Initially, debt showed a slight decline from $15,260 million at the end of March 2018 to about $14,406 million by September 2018, then it increased again, peaking at $17,369 million in March 2020. Following that, a gradual decline in debt occurred, reaching a low of approximately $14,160 million in March 2021. However, from mid-2022 onward, the debt level experienced an upward trend, culminating in $16,641 million by March 2023, indicating renewed borrowing or liability accumulation during the latest period.
- Total Assets
- The total assets showed an overall growth trajectory with some volatility. Starting at $34,795 million in March 2018, assets increased steadily, reaching $44,772 million by September 2020. After a corrective period with a slight decline to the low $41,000 million range in early 2022, assets resumed growth, finishing at $44,244 million in March 2023. This reveals a long-term expansion in the asset base, albeit with intermittent periods of stagnation or marginal decreases.
- Debt to Assets Ratio (including operating lease liability)
- This ratio exhibited a gradual downward trend from 0.44 in March 2018 to a low of around 0.33 by September 2021, signaling a relative reduction in debt compared to assets and potentially an improvement in financial leverage. From late 2021 through early 2023, the ratio increased again from approximately 0.33 to 0.38 by March 2023, reflecting a rise in debt levels relative to assets, aligning with the observed increase in total debt during the same period.
In summary, the company demonstrated a pattern of initially reducing leverage through a combination of controlled debt and asset growth. However, starting from mid-2022, there was a reversal with increasing debt and a rising debt to assets ratio, suggesting a shift toward higher leverage. The total assets displayed consistent growth over the full period, which helps in maintaining a balanced financial position despite fluctuations in debt levels.
Financial Leverage
Northrop Grumman Corp., financial leverage calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Total assets | 44,244) | 43,755) | 42,733) | 41,914) | 41,903) | 42,579) | 42,346) | 42,142) | 41,423) | 44,469) | 44,772) | 43,475) | 43,203) | 41,089) | 40,553) | 39,584) | 39,751) | 37,653) | 37,943) | 37,378) | 34,795) | |||||||
| Shareholders’ equity | 15,136) | 15,312) | 13,943) | 13,651) | 13,287) | 12,926) | 11,417) | 11,172) | 10,525) | 10,579) | 10,467) | 9,712) | 9,062) | 8,819) | 9,731) | 9,214) | 8,739) | 8,187) | 9,103) | 8,227) | 7,680) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Financial leverage1 | 2.92 | 2.86 | 3.06 | 3.07 | 3.15 | 3.29 | 3.71 | 3.77 | 3.94 | 4.20 | 4.28 | 4.48 | 4.77 | 4.66 | 4.17 | 4.30 | 4.55 | 4.60 | 4.17 | 4.54 | 4.53 | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 4.61 | 5.16 | 5.19 | 5.16 | 4.82 | 5.02 | 4.85 | 4.85 | 4.87 | 5.11 | 5.13 | 5.57 | 5.35 | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 2.04 | 2.06 | 2.14 | 2.15 | 2.12 | 2.07 | 2.14 | 2.39 | 2.27 | 2.13 | 2.14 | 2.14 | 2.17 | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 5.20 | 5.16 | 5.75 | 5.35 | 4.92 | 4.93 | 6.33 | 7.09 | 7.30 | 7.13 | 7.64 | 7.62 | 7.43 | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 3.54 | 3.73 | 3.40 | 3.55 | 3.45 | 3.47 | 3.60 | 3.56 | 3.53 | 3.68 | 3.51 | 3.50 | 3.25 | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 5.66 | 5.71 | 4.35 | 4.53 | 5.15 | 4.64 | 5.38 | 7.99 | 8.15 | 8.43 | 10.25 | 13.22 | 14.29 | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 2.22 | 2.19 | 2.25 | 2.26 | 2.20 | 2.21 | 2.23 | 2.23 | 2.24 | 2.25 | 2.37 | 2.40 | 3.54 | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 44,244 ÷ 15,136 = 2.92
2 Click competitor name to see calculations.
- Total Assets
- The total assets exhibit a generally upward trend over the observed period from March 2018 to March 2023. Beginning at approximately $34.8 billion in Q1 2018, total assets increased steadily, reaching a peak near $44.8 billion in Q4 2020. Following a moderate decline through 2021 and early 2022, total assets rebounded slightly, ending around $44.2 billion in Q1 2023. This suggests ongoing accumulation or acquisition of asset bases despite minor fluctuations.
- Shareholders’ Equity
- Shareholders’ equity shows a consistent increasing trend throughout the period. Starting at approximately $7.7 billion in Q1 2018, equity values rose steadily each quarter, with minor variances, to reach about $15.1 billion in Q1 2023. The growth in equity outpaces the growth in total assets, reflecting strengthened capitalization and possibly retained earnings or additional equity financing.
- Financial Leverage
- Financial leverage ratio steadily declined from a high of around 4.53 in early 2018 to approximately 2.92 by Q1 2023. The initial years showed leverage fluctuating around values greater than 4.0, but there was a clear downward trend starting around mid-2020. By the end of the period, the company’s leverage dropped closer to 3.0. This indicates a gradual reduction in the reliance on debt relative to equity, suggesting a move toward a more conservative capital structure and potentially lower financial risk.
- Overall Interpretation
- Over the five-year span, the financial data reflects an overall strengthening of the balance sheet. The growth in total assets accompanied by an even stronger increase in shareholders’ equity suggests financial stability and increased net worth. The consistent decrease in financial leverage further supports the view that the company has been reducing its debt burden relative to equity, which may enhance its credit profile and reduce vulnerability to financial distress. The temporary dip in total assets during 2021 is notable but appears to have been a short-term fluctuation rather than a sustained decline.
Interest Coverage
Northrop Grumman Corp., interest coverage calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Net earnings | 842) | 2,080) | 915) | 946) | 955) | 2,710) | 1,063) | 1,037) | 2,195) | 330) | 986) | 1,005) | 868) | (409) | 933) | 861) | 863) | 356) | 1,244) | 789) | 840) | |||||||
| Add: Income tax expense | 156) | 372) | 175) | 204) | 189) | 635) | 212) | 265) | 821) | (25) | 181) | 198) | 185) | (160) | 122) | 167) | 171) | 47) | 120) | 187) | 159) | |||||||
| Add: Interest expense | 129) | 120) | 122) | 131) | 133) | 133) | 132) | 136) | 155) | 160) | 154) | 154) | 125) | 130) | 123) | 137) | 138) | 142) | 133) | 144) | 143) | |||||||
| Earnings before interest and tax (EBIT) | 1,127) | 2,572) | 1,212) | 1,281) | 1,277) | 3,478) | 1,407) | 1,438) | 3,171) | 465) | 1,321) | 1,357) | 1,178) | (439) | 1,178) | 1,165) | 1,172) | 545) | 1,497) | 1,120) | 1,142) | |||||||
| Solvency Ratio | ||||||||||||||||||||||||||||
| Interest coverage1 | 12.33 | 12.53 | 13.97 | 14.07 | 14.23 | 17.08 | 11.12 | 10.57 | 10.13 | 7.29 | 6.07 | 6.15 | 5.98 | 5.83 | 7.52 | 7.96 | 7.78 | 7.66 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | ||||||||||||||||||||||||||||
| Boeing Co. | -0.53 | -0.98 | -2.54 | -1.40 | -1.31 | -0.88 | -2.29 | -2.55 | -4.26 | -5.71 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 21.33 | 20.80 | 22.05 | 20.08 | 19.10 | 17.88 | 14.11 | 11.79 | 9.28 | 8.80 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 19.85 | 21.22 | 21.33 | 24.31 | 22.57 | 21.11 | 20.08 | 15.71 | 11.87 | 12.72 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 6.73 | 1.88 | -1.66 | -1.16 | -1.49 | -0.96 | 2.15 | 1.11 | 0.65 | 2.59 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 14.34 | 16.41 | 20.95 | 20.60 | 21.35 | 22.09 | 20.98 | 18.89 | 16.79 | 17.75 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 10.58 | 11.72 | 13.31 | 10.88 | 14.12 | 14.27 | 13.67 | 15.97 | 15.44 | 14.93 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Interest coverage
= (EBITQ1 2023
+ EBITQ4 2022
+ EBITQ3 2022
+ EBITQ2 2022)
÷ (Interest expenseQ1 2023
+ Interest expenseQ4 2022
+ Interest expenseQ3 2022
+ Interest expenseQ2 2022)
= (1,127 + 2,572 + 1,212 + 1,281)
÷ (129 + 120 + 122 + 131)
= 12.33
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT values display significant fluctuations over the period from March 2018 to March 2023. Initial quarters in 2018 demonstrate relatively stable EBIT around the range of 1100 to 1500 million USD, with a peak at 1497 million in September 2018. However, in December 2018, EBIT sharply declines to 545 million, recovering to levels near 1170 million in the first three quarters of 2019. A notable negative EBIT of -439 million occurs in the last quarter of 2019, indicating a substantial operational setback. From 2020 onward, EBIT figures are volatile; although they recover with values mostly above 1100 million USD, they experience steep jumps, especially in March and December 2021 (3171 and 3478 million respectively). The trend continues with fluctuations, with EBIT generally remaining above 1100 million and peaking again in December 2022 at 2572 million before declining to 1127 million in March 2023.
- Interest expense
- Interest expense remains relatively stable throughout the observed period, ranging between 120 and 160 million USD. There is no marked upward or downward trend but rather a slight variation around a mean value close to 135 million USD. A slight increase in interest expense is observed in the latter quarters of 2020 (around 160 million), which gradually decreases back to approximately 120-130 million in 2022 and early 2023.
- Interest coverage ratio
- The interest coverage ratio, which measures the company’s ability to meet interest payments from EBIT, shows a markedly positive trend over time, starting from a low level in 2018 with ratios around 5.8 to 7.9 in reported quarters. A significant improvement is noted from mid-2020, progressively rising to double digits and reaching a peak of 17.08 in December 2021. After this peak, the ratio slightly declines but remains robust, maintaining levels above 12 through early 2023. This overall increasing trend suggests the company’s improving capacity to service its interest obligations, driven by higher or stabilized EBIT relative to interest expenses.
- Summary
- The data indicates operational volatility with occasional sharp declines in EBIT, especially notable in late 2018 and late 2019, but also demonstrates strong recovery phases. The steady interest expense combined with the increasing interest coverage ratio reflects improved financial stability and stronger earnings relative to debt servicing costs over the duration analyzed. This pattern points toward enhanced financial resilience despite operational upticks and downturns at various points in the timeframe.