Northrop Grumman Liquidity Convenience

Northrop Grumman (NOC) presents debt net of cash as a percentage of capital. They currently make the claim that the debt percentage is down significantly. What they fail to point out is that they have substantial pre-payments and progress payments which are pseudo-debt. Clearly without these prepays they would be heavily indebted. The debt net of cash is not fully representative of the firms liquidity and capital.

Disclosure: No position in any stocks mentioned in this post.