The Northrop Grumman Corporation Financial Analysis

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Financial analysis overview When evaluating the Northrop Grumman Corporation financial analysis, projects, budgets and other finances the organization must first determine their suitability for investment. The financial analysis, analyzes whether the organization is stable, in the black, liquid, and profitable enough for the organization to be invested in. When investors look at the Northrop Grumman Corporation, Annual Report financials they primarily focus on the income statement, balance sheet, and cash flow statement (MarketWatch, 2016). Figure 1 (Northrop Grumman Corporation, 2014a) (Northrop Grumman Corporation, 2012) Northrop Grumman Corporation?s calculates their Net income by taking their revenues and adjusting for the cost of…show more content…
The Earning per Share is a metric that organizations use to gauge the organization?s profitability based on shareholder shares per unit. This method is used widely in all businesses and is the most popular method to show profitability of the organization, one thing that needs to be considered about earning is that they can often be manipulated, by accounting changes and reassertions. Below is Northrop Grumman Corporation?s Earnings per Share, the calculations where for each quarter for each year and totaled for each year for the past five years (MarketWatch, 2016). Figure 3 (Northrop Grumman Corporation, 2014a) (Northrop Grumman Corporation, 2012) The Return on Equity is an easy way for the organization to gauge money invested from common stock, from both owners and the organization, this shows the rate of return on the money invested. The Return on Equity show the organization?s capability to create profit form the shareholders equity, this is calculation is done by subtracting assets from the liabilities (MarketWatch, 2016). The Northrop Grumman Corporation uses the Return on Equity to show how well the organization is investing their funds to generate growth, as well as comparing their profitability with other companies in the same industry. Figure 4 (Northrop Grumman Corporation, 2014a) (Northrop Grumman Corporation, 20120 Corporate Governance The
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