The Northrop Grumman Corporation Financial Analysis

We will also analyze the proforma(s): balance sheet, income statement, cash flow, ratios, and score board. In the income statement, we can see the predicted sales of our products and see if there are any adjustments needed. We also made sure that we are making a good net profit.

* Return on assets (ROA) – ROA shows how successful a company is in generating profits on the amount of assets they own. Since assets consist of debt and equity, ROA is a measure of how well a company converts investment dollars into profit. The higher the percentage, the more profit a company is generating per dollar of investment. Similar to ROS, this ratio needs to be looked at compared to the industry as different industries have different requirements that can affect ROA. For example, companies in the airline and mining industries need expensive assets to operate so will have lower ROA’s compared to companies in the pharmaceutical or advertising industries.

I. Rate of Return on Total Assets: Measures the company’s profitability relative to total assets. A percentage increment for Company G, from 12.30% to 13.68% (2011-12) keeps them above industry benchmarks (8.60% and 12.30%). Rate of Return on Total Assets represents strength for Company G.

In order to ascertain how well a company is performing, analyses must be done in regard to the business being stable, including its’ ability to pay debts, how much cash or other liquid assets are available, and whether the organization is viable enough to continue operations. These analyses typically look at income statements, balance sheets, and statements of cash flow, where current and past performance will be studied with the goal of predicting how the company will perform in the future.

General Dynamics (GD) is a market leader in business aviation; land and expeditionary combat vehicles and systems, armaments, and munitions; shipbuilding and marine systems; and mission-critical information systems and technologies (Gendyn, 2008). Lockheed Martin (LMT) is a leading multinational aerospace manufacturer and advanced technology company formed in 1995 by the merger of Lockheed Corporation with Martin Marietta (Lockheed, 2008). I have compared both companies under various criteria such as ratio analysis, stock price performance, common size financial statements and then have tried to comment on which is company is better.

Return on equity measures a company’s profitability by calculating how much profit a company generates with the money shareholders have invested. It is important to consider ROE and not just net income in dollar term because it helps for making comparisons among different investment amounts.

Return On Common Stockholders ' Equity: measures profitability of owner investment by subtracting preferred dividend from net income and dividing by average common stockholder 's equity.

Northrop Grumman’s history in the defense industry closely aligns them with the public sector and connects them to an identity of Euro-American male-dominated organizations. Over time, however, they have developed and embraced a diverse and inclusive workplace that has had a significant impact on veterans and the LGBT community. Even though they have established a goal for the past several years to increase women and people of color in their workforce, there is still work to be done. It would serve them well to continue building on the strong leadership development and mentorship programs they have in place, broadening its scope to include all management levels and their Board of Directors. Additionally, they may need to take an objective

largest percentage changes on Lockheed Martin’s balance sheet is the 16% vertical increase in ‘Other Liabilities’ (Other Non-Current Liabilities). This portion of the balance sheet contains payable liabilities in the future such as environmental cleanups and proceedings ($1.0B recorded in accordance with the Comprehensive Environmental Response, Compensation and Liability Act), expected pension payments, and deferred compensation plans. As obligations listed in this account are normally contractual or mandatory, it will be hard for the company to reduce the amount. What the company can instead do is to transfer some amount under prepaid expenses, thereby erasing some liabilities while fulfilling some pension and compensation obligations.

The return on equity ratio measures the rate of return that the company earns on the

Return on investment or ROI is a profitability ratio that calculates the profits of an investment as a percentage of the original cost. This means it measures how much money was made on the investment as a percentage of the purchase price. Kirkland`s return on investment ratio is very low compared to the peer average.

The world of finance in today’s market is one of numerous ups and downs. With the global economy in constant flux, it is more important than every for companies to examine their financial status and compare their position to that of the relative market as well as their fellow competitors. In order to better understand the ways in which today’s managers examine their position on the market and evaluate their current value as a company we will examine the financial data of Lockheed Martin Corporation and perform a detailed financial analysis on the company. In this

The return on equity conveys the profits of the company as a rate of return on the amount of owners' equity. ROE uses average owners equity over the specified time period and net income. Historically a ROE of between 10% and 15% were considered average. Recently higher rates in growth industries have been greater.

For any company, the ability to meet its short-term and long-term financial goals is an essential factor in maintaining its operations and ensuring future growth. A company evaluation at regular time intervals helps to check its financial health, its capital structure and its potential to attract investors.

One of the most important profitability metrics is return on equity. Return on equity reveals how much profit a company earned in comparison to the total amount of shareholder equity. It’s what the shareholders “own”. A business that has a high return on equity is more likely to be one that is capable of generating cash internally. For the most part, the higher a company’s return on equity compared to its industry, the better.