Financial Analysis of Northrop Grumman
Financial Analysis of Northrop Grumman
Brandes, John
Embrry-Riddle Aeronautical University
MBAA 518 Managerial Finance
December 16, 2012
Dr. Summers
Abstract The fiscal analysis of Northrop Grumman includes the examination of profitability, liquidity, and equity ratios, its 3 year stock price, as well as a general financial overview of the company. This case study exams their fiscal strategy as well as the debt utilization and possible effects of the fiscal crisis on Northrop Grumman. This document compares Northrop Grumman to other companies in the defense sector by comparing their ratios as well profitability. The paper will provide the reader with an understanding of the financial makeup of the company and its current and recent performance as well as estimates of future earnings.
Overview of Northrop Grumman Northrop Grumman is one of the world’s major defense contractors. Northrop Grumman is an innovative company that has long history of making aircraft and other products that support the defense industry. Northrop Grumman is made up of the former Northrop and Grumman companies and eighteen other companies that have been integrated into one successful corporation. Northrop Grumman has four primary sectors in its business model: aerospace systems, electronic systems, information systems, and technical services. The company has its headquarters in Falls Church, Virginia, and production facilities across the United States, with major facilities in California, Virginia, and Maryland. Northrop Grumman is the third largest defense contractor in the world. Some of Northrop Grumman’s primary competitors are Lockheed Martin, Raytheon, Boeing, and L-3 Communications Holdings, Inc. Northrop Grumman plans on remaining competitive even with the threat of sequestration looming over the federal government and the threat of an additional $500 Billion in defense cuts above the currently planned $500 billion in defense cuts. They plan on remaining competitive
Brandes, John
Embrry-Riddle Aeronautical University
MBAA 518 Managerial Finance
December 16, 2012
Dr. Summers
Abstract The fiscal analysis of Northrop Grumman includes the examination of profitability, liquidity, and equity ratios, its 3 year stock price, as well as a general financial overview of the company. This case study exams their fiscal strategy as well as the debt utilization and possible effects of the fiscal crisis on Northrop Grumman. This document compares Northrop Grumman to other companies in the defense sector by comparing their ratios as well profitability. The paper will provide the reader with an understanding of the financial makeup of the company and its current and recent performance as well as estimates of future earnings.
Overview of Northrop Grumman Northrop Grumman is one of the world’s major defense contractors. Northrop Grumman is an innovative company that has long history of making aircraft and other products that support the defense industry. Northrop Grumman is made up of the former Northrop and Grumman companies and eighteen other companies that have been integrated into one successful corporation. Northrop Grumman has four primary sectors in its business model: aerospace systems, electronic systems, information systems, and technical services. The company has its headquarters in Falls Church, Virginia, and production facilities across the United States, with major facilities in California, Virginia, and Maryland. Northrop Grumman is the third largest defense contractor in the world. Some of Northrop Grumman’s primary competitors are Lockheed Martin, Raytheon, Boeing, and L-3 Communications Holdings, Inc. Northrop Grumman plans on remaining competitive even with the threat of sequestration looming over the federal government and the threat of an additional $500 Billion in defense cuts above the currently planned $500 billion in defense cuts. They plan on remaining competitive
References: Defense System Staff (2012) NATO inks $1.7B deal for Block 40 Global Hawks, 1105 Media, Vienna, VA. Retrieved on November 10, 2012 from http://defensesystems.com/articles/2012/05/21/agg-nato-global-hawks-contract.aspx. Mergent (2012) Mergent Online General Company Information, 2012. Retrieved November 15, 2012 from www.mergentonline.com. McKinney, Brooks (2012) Northrop Grumman, U.S. Navy Conduct First Catapult Launch of X-47B Unmanned Aircraft, Globe Newswire. Retrieved on November 29, 2012 from http://www.irconnect.com/noc/press/pages/news_releases.html?d=10014076. Movius, Steve (2012) Northrop Grumman Reports Third Quarter 2012 Financial Results. Falls Church, Va. Northrop Grumman (2012) 2011 Annual Report. Falls Church, Va. Thompson, Loren (2011) How Northrop Grumman Aims To Outperform, Forbes, Inc. Retrieved on November 29, 2012 from http://www.forbes.com/sites/beltway/2011/01/10/how-northrop-grumman-aims-to-outperform/. (2012) Industry Browser - Industrial Goods - Aerospace/Defense - Major Diversified - Company List Yahoo Finance. Retrieved on December 8, 2012 from http://biz.yahoo.com/p/610conameu.html. (2012) Moody 's Disclosures on Credit Ratings of Northrop Grumman Corporation , Services, New York. Retrieved on November 3, 2012 from http://www.moodys.com/research/Moodys-Disclosures-on-Credit-Ratings-of-Northrop-Grumman-Corporation--PR_243144. (2012) Northrop Grumman Corp. Ford Equity Research, Retrieved November 30, 2012 from www.fordequity.com. (2012) Northrop Grumman, Yahoo Finance. Retreived on October 30, 2012 from http://finance.yahoo.com/q/bs?s=NOC+Balance+Sheet&annual. (2012) 3 Defense Companies To Buy Ahead Of A Fiscal Cliff Compromise. Retrieved on December 9, 2012 from http://seekingalpha.com/article/1053621-3-defense-companies-to-buy-ahead-of-a-fiscal-cliff-compromise?source=yahoo. Appendix A.