Analysis of Long-term (Investment) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Aggregate Accruals
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Long-term Activity Ratios (Summary)
Northrop Grumman Corp., long-term (investment) activity 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).
The analysis of the quarterly financial ratios reveals distinct trends across the various turnover metrics.
- Net Fixed Asset Turnover
- This ratio exhibited a relatively stable pattern from early 2019 through mid-2021, with values oscillating narrowly between approximately 4.9 and 5.26. Beginning in late 2021, a consistent declining trend is observed, decreasing from 4.52 to 4.2 by the first quarter of 2023. This decline suggests reduced efficiency in generating revenue from net fixed assets over the latest periods.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- Values initially remain fairly constant around the 4.0 to 4.3 range until late 2021. Thereafter, a noticeable decrease occurs, dropping from 3.74 down to roughly 3.49 by the first quarter of 2023. The pattern parallels the net fixed asset turnover metric, indicating that when incorporating lease assets, the asset utilization efficiency also diminishes in recent quarters.
- Total Asset Turnover
- This ratio demonstrates relative stability across the observed period, generally fluctuating between 0.79 and 0.9. After reaching a peak near 0.9 in early 2021, a slight decline ensues but the ratio stabilizes around 0.83 to 0.84 in the most recent quarters. This suggests that overall asset efficiency in generating revenue has not experienced significant change despite the reductions seen in fixed asset turnovers.
- Equity Turnover
- Equity turnover shows a downward trajectory over time. Starting at approximately 3.6 in early 2019, values decline gradually with some volatility to end at about 2.45 by the first quarter of 2023. The sharpest decreases appear from late 2021 onwards, indicating a decreasing efficiency in generating sales relative to shareholders’ equity during recent periods.
In summary, the data reveals a consistent decline in fixed asset-related turnovers and equity turnover in the most recent years, while total asset turnover remains comparatively stable. The downward movement in net fixed asset and equity turnovers may indicate challenges in maintaining asset and equity efficiency, potentially reflecting capital base growth without proportionate sales increases or operational challenges affecting asset utilization.
Net Fixed Asset Turnover
Northrop Grumman Corp., net fixed asset turnover 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Sales | |||||||||||||||||||||||
| Property, plant and equipment, net of accumulated depreciation | |||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||
| Net fixed asset turnover1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
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).
1 Q1 2023 Calculation
Net fixed asset turnover
= (SalesQ1 2023
+ SalesQ4 2022
+ SalesQ3 2022
+ SalesQ2 2022)
÷ Property, plant and equipment, net of accumulated depreciation
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the sales, property, plant and equipment (net of accumulated depreciation), and net fixed asset turnover ratio over the observed periods.
- Sales Trends
- Sales figures exhibit a generally positive trajectory with some fluctuations. From the first quarter of 2019 through the end of 2020, sales increased steadily from 8,189 million USD to a peak of 10,212 million USD in the fourth quarter of 2020. A decline followed in 2021, with sales decreasing consistently throughout the year, reaching 8,639 million USD in the last quarter. In 2022, sales showed mild recovery and stabilized around 8,800 to 9,000 million USD, culminating in a notable rise to 10,033 million USD in the final quarter. The latest quarter, March 31, 2023, presented a slight dip to 9,301 million USD.
- Property, Plant and Equipment (Net)
- The net value of property, plant, and equipment steadily increased over the entire period. Starting at 6,420 million USD in the first quarter of 2019, it rose consistently each quarter, reaching 8,838 million USD by the first quarter of 2023. This steady growth indicates ongoing investment in fixed assets, suggesting capacity expansion or modernization efforts.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio, which measures sales revenue generated per unit of net fixed assets, showed variability across the quarters. Initially, the ratio hovered around 4.9 to 5.0, with a peak reaching 5.26 in early 2021, reflecting efficient utilization of fixed assets relative to sales during this time. However, from mid-2021 onwards, the ratio gradually declined to a low of 4.16 in the last quarter of 2022, with a slight recovery to 4.2 in the first quarter of 2023. This downward trend in turnover rate can be attributed to the increasing asset base outpacing sales growth, indicating a marginal decrease in operating efficiency concerning fixed assets.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Northrop Grumman Corp., net fixed asset turnover (including operating lease, right-of-use asset) 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Sales | |||||||||||||||||||||||
| Property, plant and equipment, net of accumulated depreciation | |||||||||||||||||||||||
| Operating lease right-of-use assets | |||||||||||||||||||||||
| Property, plant and equipment, net of accumulated depreciation (including operating lease, right-of-use asset) | |||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
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).
1 Q1 2023 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset)
= (SalesQ1 2023
+ SalesQ4 2022
+ SalesQ3 2022
+ SalesQ2 2022)
÷ Property, plant and equipment, net of accumulated depreciation (including operating lease, right-of-use asset)
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends concerning sales, property, plant and equipment (PP&E), and net fixed asset turnover over the analyzed periods.
- Sales
- Sales figures exhibit a generally positive trajectory after a period of relative stability. From the first quarter of 2019 through to the fourth quarter, sales increased steadily from $8,189 million to $8,721 million. Despite some fluctuations in 2020, including slight decreases early in the year, sales rebounded notably in the fourth quarter to $10,212 million. In 2021, sales showed volatility with a peak in the first quarter ($9,157 million) but declined toward the end of the year. Sales figures in 2022 remained relatively stable, hovering near $8,800 million to $10,033 million, with a significant jump recorded in the fourth quarter of 2022. The first quarter of 2023 shows a slight decrease to $9,301 million compared to the last quarter of 2022.
- Property, Plant and Equipment (PP&E), Net of Accumulated Depreciation
- The net PP&E balance demonstrates a gradual increase over the entire period. Starting at $7,703 million in the first quarter of 2019, it rose steadily each quarter with some minor stagnation, reaching $8,604 million by the fourth quarter of 2020. From 2021 onward, the balance consistently increased, surging beyond $10,000 million by the fourth quarter of 2022 and maintaining a high level through the first quarter of 2023 at $10,617 million. This suggests continued investment in fixed assets and possibly expansion or modernization activities.
- Net Fixed Asset Turnover
- This ratio, which measures sales generated per dollar of net fixed assets, shows a declining trend over the analyzed period. Initially, the turnover ratio remained above 4.0 through 2019 and into early 2020, peaking at 4.28 in the fourth quarter of 2020. However, from 2021 onward, a steady decline is observed, falling from 4.32 in the first quarter of 2021 to about 3.45–3.49 in early 2023. This decrease indicates that the company is generating less sales revenue per unit of fixed assets than in prior years, possibly due to increased asset base outpacing sales growth.
In summary, the company has generally expanded its asset base significantly, with net PP&E growing steadily over the period. Sales have shown growth, particularly strong in late 2020 and late 2022, though with some volatility. The declining net fixed asset turnover ratio suggests efficiency in asset utilization has diminished, implying that the scale of asset investments has increased faster than sales revenues. This could warrant further analysis into asset usage efficiency and sales strategies to ensure optimal return on invested capital.
Total Asset Turnover
Northrop Grumman Corp., total asset turnover calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Sales | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||
| Total asset turnover1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
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).
1 Q1 2023 Calculation
Total asset turnover
= (SalesQ1 2023
+ SalesQ4 2022
+ SalesQ3 2022
+ SalesQ2 2022)
÷ Total assets
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The quarterly financial data reveals several notable trends in key performance indicators over the observed period.
- Sales
- The sales figures exhibit a generally increasing trend from March 2019 through the end of 2022, with fluctuations in certain quarters. The sales grew from approximately 8.19 billion US dollars in the first quarter of 2019 to a peak exceeding 10 billion US dollars in the last quarter of 2020. Following this peak, sales experienced some volatility with a downward adjustment in late 2021 and early 2023 but maintained levels close to or above 8.7 billion US dollars. The most recent quarter, March 2023, showed a sales figure of 9.3 billion US dollars, indicating a recovery from the earlier dip and sustained demand.
- Total Assets
- The total assets showed a consistent upward trajectory from just under 40 billion US dollars in early 2019 to over 44 billion US dollars by the first quarter of 2023. The asset base expanded gradually, indicating ongoing investments or asset accumulation. There is a noticeable jump in total assets from the third quarter of 2019 through mid-2020, stabilizing above 41 billion US dollars thereafter, with slight increases into 2023.
- Total Asset Turnover Ratio
- The total asset turnover ratio varied between 0.79 and 0.9 during the period. The ratio initially hovered around 0.79 to 0.83 from 2019 through mid-2020, showed improvement reaching a peak of 0.9 in the first quarter of 2021, reflecting better efficiency in utilizing assets to generate sales during this time. Following this peak, the turnover decreased modestly to the mid-0.8 range but remained relatively stable, indicating consistent operational efficiency despite fluctuations in sales and asset levels.
Overall, the data reflects a company with steady sales growth punctuated by some volatility, gradually increasing asset base, and maintaining a fairly stable asset turnover ratio. The peak in asset turnover in early 2021 suggests a period of heightened operational efficiency, while subsequent quarters indicate normalization but consistent asset utilization. The balance between sales growth and asset expansion suggests measured management of resources to support revenue generation.
Equity Turnover
Northrop Grumman Corp., equity turnover 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||
| Sales | |||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||
| Equity turnover1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Equity Turnover, Competitors2 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
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).
1 Q1 2023 Calculation
Equity turnover
= (SalesQ1 2023
+ SalesQ4 2022
+ SalesQ3 2022
+ SalesQ2 2022)
÷ Shareholders’ equity
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The sales performance exhibits fluctuations across the quarters, with a generally increasing trend from 2019 through 2022, peaking notably in the fourth quarter of 2020. After this peak, sales experienced some volatility but maintained higher levels compared to earlier periods, indicating growth over the long term. The most recent quarter shows a moderate decline compared to the previous quarter, yet sales remain robust relative to the earlier years.
Shareholders’ equity demonstrates a steady upward trajectory across the observed periods, with consistent growth particularly noticeable from mid-2020 onward. This trend reflects a strengthening equity base, possibly indicating retained earnings accumulation or capital injections. The equity values rise from below 9 billion US dollars in early 2019 to over 15 billion US dollars by the first quarter of 2023.
Equity turnover displays a clear declining trend over the analyzed timeframe. Starting at relatively high ratios above 3.5 in 2019, it gradually decreases to around 2.4 by early 2023. This decline suggests that the company is generating less sales per unit of shareholders’ equity than in previous years, which could point to either a slower rate of sales growth relative to equity growth or a strategic shift in capital structure or asset utilization.
- Sales Trend
- Generally increasing with a peak in Q4 2020, followed by some volatility but sustained growth overall.
- Shareholders’ Equity
- Consistent and steady growth indicative of strengthening financial position and accumulation of equity capital.
- Equity Turnover
- Declining ratio, revealing decreasing efficiency in generating sales from equity over the period analyzed.