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Guides

Learn the concepts that drive each sector: what they mean, how to calculate them, and the benchmark ranges.

Defence & Aerospace

Defence Primes

Backlog and Book-to-Bill in Defence

Funded vs unfunded backlog, book-to-bill arithmetic and FY2025 peer ratios: RTX 1.56x, GD 1.6x defence, LHX 1.3x, BAE 1.2x, NOC 1.10x, plus the LMT filing gap.

Defence Prime Book-to-Bill Benchmarks

FY2025 book-to-bill ranked across RTX, GD, LHX, LMT, BAE and NOC, each with backlog and the filer's own orders-to-revenue definition beside it.

Funded vs Unfunded Backlog in Defence

What appropriation does to a backlog number, why each prime defines funded and unfunded in its own words, and a worked example from one FY2025 filing.

Free Cash Flow Conversion for Primes

Why primes screen on FCF ÷ net income: GD incentive weight 25%, OCF 122% vs FCF 94%, and the FY2025 ladder from LHX 170% to NOC 79%.

FAS vs CAS Pension Accounting for Defence Primes

Why a defence prime books its pension cost twice, where the reconciling line sits between segment and consolidated profit, and how each filer defines it.

Cost-Plus vs Fixed-Price Contracts

NOC cost-type vs FFP margin/risk language, verified portfolio mix (~50% fixed at NOC; GD 51% fixed / 44% cost-reimb), and segment margin dispersion across the peer set.

Defence Budgets and the Demand Cycle

US DoD FY2026 request $961.6B (+11.8%), NATO 2% met by all 32 Allies, Hague 5%-by-2035, and how RTX 52/48 vs LMT ~99.6% government changes budget-beta.

Valuing Defence Primes (FCF Yield)

How to compute FCF yield for defence primes and cross-check it against P/E, using FY2025 filed figures, the BAE FX adjustment, and FCF conversion.

Defence & Aerospace

Commercial Aerospace

Defence & Aerospace

Space & Satellites