Analysis of Profitability Ratios
Beginner level
Profitability ratios measure the company’s ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Northrop Grumman Corp., profitability ratios
Based on: 10-K (filing date: 2020-01-30), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-30), 10-K (filing date: 2016-02-01).
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Northrop Grumman Corp.’s gross profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Northrop Grumman Corp.’s operating profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Northrop Grumman Corp.’s net profit margin ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Northrop Grumman Corp.’s ROE improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Northrop Grumman Corp.’s ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Gross Profit Margin
Northrop Grumman Corp., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | 7,259 | 6,791 | 5,954 | 5,777 | 5,642 | |
| Sales | 33,841 | 30,095 | 25,803 | 24,508 | 23,526 | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 21.45% | 22.57% | 23.07% | 23.57% | 23.98% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Boeing Co. | 5.83% | 19.42% | 18.55% | 14.57% | 14.59% | |
| General Dynamics Corp. | 17.94% | 18.55% | 19.98% | 19.93% | 19.48% | |
| Lockheed Martin Corp. | 13.99% | 13.53% | 10.87% | 10.71% | 11.27% | |
| Raytheon Technologies Corp. | 25.93% | 24.84% | 26.55% | 27.57% | 27.93% | |
Based on: 10-K (filing date: 2020-01-30), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-30), 10-K (filing date: 2016-02-01).
1 2019 Calculation
Gross profit margin = 100 × Gross profit ÷ Sales
= 100 × 7,259 ÷ 33,841 = 21.45%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Northrop Grumman Corp.’s gross profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
Operating Profit Margin
Northrop Grumman Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | 3,969 | 3,780 | 3,299 | 3,193 | 3,076 | |
| Sales | 33,841 | 30,095 | 25,803 | 24,508 | 23,526 | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 11.73% | 12.56% | 12.79% | 13.03% | 13.07% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Boeing Co. | -2.58% | 11.85% | 11.01% | 6.17% | 7.74% | |
| General Dynamics Corp. | 11.81% | 12.31% | 13.49% | 13.74% | 13.28% | |
| Lockheed Martin Corp. | 14.29% | 13.64% | 11.60% | 11.74% | 11.78% | |
| Raytheon Technologies Corp. | 11.64% | 12.86% | 14.49% | 14.28% | 13.00% | |
| Operating Profit Margin, Sector | ||||||
| Aerospace & Defense | 8.43% | 12.55% | 12.39% | 10.61% | 10.83% | |
| Operating Profit Margin, Industry | ||||||
| Industrials | 13.15% | 14.05% | 13.85% | 12.87% | 13.62% | |
Based on: 10-K (filing date: 2020-01-30), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-30), 10-K (filing date: 2016-02-01).
1 2019 Calculation
Operating profit margin = 100 × Operating income ÷ Sales
= 100 × 3,969 ÷ 33,841 = 11.73%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Northrop Grumman Corp.’s operating profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
Net Profit Margin
Northrop Grumman Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | 2,248 | 3,229 | 2,015 | 2,200 | 1,990 | |
| Sales | 33,841 | 30,095 | 25,803 | 24,508 | 23,526 | |
| Profitability Ratio | ||||||
| Net profit margin1 | 6.64% | 10.73% | 7.81% | 8.98% | 8.46% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Boeing Co. | -0.83% | 10.34% | 8.78% | 5.18% | 5.39% | |
| General Dynamics Corp. | 8.85% | 9.24% | 9.40% | 9.42% | 9.42% | |
| Lockheed Martin Corp. | 10.42% | 9.39% | 3.92% | 11.22% | 7.81% | |
| Raytheon Technologies Corp. | 7.19% | 7.92% | 7.61% | 8.83% | 13.56% | |
| Net Profit Margin, Sector | ||||||
| Aerospace & Defense | 5.88% | 9.51% | 7.54% | 8.01% | 8.43% | |
| Net Profit Margin, Industry | ||||||
| Industrials | 7.36% | 6.75% | 8.05% | 8.73% | 7.03% | |
Based on: 10-K (filing date: 2020-01-30), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-30), 10-K (filing date: 2016-02-01).
1 2019 Calculation
Net profit margin = 100 × Net earnings ÷ Sales
= 100 × 2,248 ÷ 33,841 = 6.64%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Northrop Grumman Corp.’s net profit margin ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Return on Equity (ROE)
Northrop Grumman Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | 2,248 | 3,229 | 2,015 | 2,200 | 1,990 | |
| Shareholders’ equity | 8,819 | 8,187 | 7,048 | 5,259 | 5,522 | |
| Profitability Ratio | ||||||
| ROE1 | 25.49% | 39.44% | 28.59% | 41.83% | 36.04% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Boeing Co. | — | 3,085.55% | 2,309.01% | 599.14% | 81.70% | |
| General Dynamics Corp. | 25.66% | 28.51% | 25.47% | 26.92% | 27.61% | |
| Lockheed Martin Corp. | 199.23% | 361.98% | — | 350.89% | 116.40% | |
| Raytheon Technologies Corp. | 13.25% | 13.70% | 15.37% | 18.33% | 27.81% | |
| ROE, Sector | ||||||
| Aerospace & Defense | 28.74% | 45.51% | 41.20% | 44.23% | 40.23% | |
| ROE, Industry | ||||||
| Industrials | 25.43% | 23.99% | 23.83% | 25.16% | 17.65% | |
Based on: 10-K (filing date: 2020-01-30), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-30), 10-K (filing date: 2016-02-01).
1 2019 Calculation
ROE = 100 × Net earnings ÷ Shareholders’ equity
= 100 × 2,248 ÷ 8,819 = 25.49%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Northrop Grumman Corp.’s ROE improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Return on Assets (ROA)
Northrop Grumman Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | 2,248 | 3,229 | 2,015 | 2,200 | 1,990 | |
| Total assets | 41,089 | 37,653 | 34,917 | 25,614 | 24,454 | |
| Profitability Ratio | ||||||
| ROA1 | 5.47% | 8.58% | 5.77% | 8.59% | 8.14% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Boeing Co. | -0.48% | 8.91% | 8.88% | 5.44% | 5.48% | |
| General Dynamics Corp. | 7.13% | 7.37% | 8.31% | 8.99% | 9.27% | |
| Lockheed Martin Corp. | 13.11% | 11.24% | 4.30% | 11.09% | 7.34% | |
| Raytheon Technologies Corp. | 3.96% | 3.93% | 4.70% | 5.64% | 8.70% | |
| ROA, Sector | ||||||
| Aerospace & Defense | 4.10% | 7.21% | 6.44% | 7.14% | 7.42% | |
| ROA, Industry | ||||||
| Industrials | 4.67% | 4.52% | 5.03% | 5.46% | 4.00% | |
Based on: 10-K (filing date: 2020-01-30), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-30), 10-K (filing date: 2016-02-01).
1 2019 Calculation
ROA = 100 × Net earnings ÷ Total assets
= 100 × 2,248 ÷ 41,089 = 5.47%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Northrop Grumman Corp.’s ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |