Altria Group Inc. (MO) | Short-term (Operating) Activity

Ratios (Summary)

Altria Group Inc., short-term (operating) activity ratios

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Turnover Ratios
Inventory turnover	14.10	13.38	13.51	13.01	18.11
Receivables turnover	127.55	88.81	286.62	245.38	439.91
Payables turnover	54.59	47.32	46.05	47.68	37.95
Working capital turnover	–	–	–	–	4.92
Average No. of Days
Average inventory processing period	26	27	27	28	20
Add: Average receivable collection period	3	4	1	1	1
Operating cycle	29	31	28	30	21
Less: Average payables payment period	7	8	8	8	10
Cash conversion cycle	22	24	20	22	11

Source: Based on data from Altria Group Inc. Annual Reports

Ratio	Description	The company
Inventory turnover	An activity ratio calculated as revenue divided by inventory.	Altria Group Inc.'s inventory turnover deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.
Receivables turnover	An activity ratio equal to revenue divided by receivables.	Altria Group Inc.'s receivables turnover deteriorated from 2010 to 2011 but then slightly improved from 2011 to 2012.
Payables turnover	An activity ratio calculated as revenue divided by payables.	Altria Group Inc.'s payables turnover increased from 2010 to 2011 and from 2011 to 2012.
Working capital turnover	An activity ratio calculated as revenue divided by working capital.
Average inventory processing period	An activity ratio equal to the number of days in the period divided by inventory turnover over the period.	Altria Group Inc.'s average inventory processing period deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.
Average receivable collection period	An activity ratio equal to the number of days in the period divided by receivables turnoverd.	Altria Group Inc.'s average receivable collection period deteriorated from 2010 to 2011 but then slightly improved from 2011 to 2012.
Operating cycle	Equal to average inventory processing period plus average receivables collection period.	Altria Group Inc.'s operating cycle deteriorated from 2010 to 2011 but then improved from 2011 to 2012 not reaching 2010 level.
Average payables payment period	An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.	Altria Group Inc.'s average payables payment period declined from 2010 to 2011 and from 2011 to 2012.
Cash conversion cycle	A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period.	Altria Group Inc.'s cash conversion cycle deteriorated from 2010 to 2011 but then slightly improved from 2011 to 2012.

Inventory Turnover

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in millions)
Net revenues	24,618	23,800	24,363	23,556	19,356
Inventories	1,746	1,779	1,803	1,810	1,069
Inventory Turnover, Comparison to Industry
Altria Group Inc.¹	14.10	13.38	13.51	13.01	18.11
Industry, Consumer Goods	9.77	10.72	10.21	9.72	10.28

Source: Based on data from Altria Group Inc. Annual Reports

2012 Calculations

¹ Inventory turnover = Net revenues ÷ Inventories
= 24,618 ÷ 1,746 = 14.10

Ratio	Description	The company
Inventory turnover	An activity ratio calculated as revenue divided by inventory.	Altria Group Inc.'s inventory turnover deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.

Receivables Turnover

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in millions)
Net revenues	24,618	23,800	24,363	23,556	19,356
Receivables	193	268	85	96	44
Receivables Turnover, Comparison to Industry
Altria Group Inc.¹	127.55	88.81	286.62	245.38	439.91
Industry, Consumer Goods	11.35	12.67	11.57	13.32	12.66

Source: Based on data from Altria Group Inc. Annual Reports

2012 Calculations

¹ Receivables turnover = Net revenues ÷ Receivables
= 24,618 ÷ 193 = 127.55

Ratio	Description	The company
Receivables turnover	An activity ratio equal to revenue divided by receivables.	Altria Group Inc.'s receivables turnover deteriorated from 2010 to 2011 but then slightly improved from 2011 to 2012.

Payables Turnover

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in millions)
Net revenues	24,618	23,800	24,363	23,556	19,356
Accounts payable	451	503	529	494	510
Payables Turnover, Comparison to Industry
Altria Group Inc.¹	54.59	47.32	46.05	47.68	37.95
Industry, Consumer Goods	10.66	12.96	11.60	15.48	13.10

Source: Based on data from Altria Group Inc. Annual Reports

2012 Calculations

¹ Payables turnover = Net revenues ÷ Accounts payable
= 24,618 ÷ 451 = 54.59

Ratio	Description	The company
Payables turnover	An activity ratio calculated as revenue divided by payables.	Altria Group Inc.'s payables turnover increased from 2010 to 2011 and from 2011 to 2012.

Working Capital Turnover

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in millions)
Current assets	6,315	7,131	5,981	5,773	11,076
Less: Current liabilities	8,251	7,643	6,840	7,992	7,142
Working capital	(1,936)	(512)	(859)	(2,219)	3,934
Net revenues	24,618	23,800	24,363	23,556	19,356
Working Capital Turnover, Comparison to Industry
Altria Group Inc.¹	–	–	–	–	4.92
Industry, Consumer Goods	23.29	23.46	12.88	26.61	39.68

Source: Based on data from Altria Group Inc. Annual Reports

2012 Calculations

¹ Working capital turnover = Net revenues ÷ Working capital
= 24,618 ÷ -1,936 = –

Ratio	Description	The company
Working capital turnover	An activity ratio calculated as revenue divided by working capital.

Average Inventory Processing Period

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Inventory turnover	14.10	13.38	13.51	13.01	18.11
Average Inventory Processing Period (no. of days), Comparison to Industry
Altria Group Inc.¹	26	27	27	28	20
Industry, Consumer Goods	37	34	36	38	36

Source: Based on data from Altria Group Inc. Annual Reports

2012 Calculations

¹ Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 14.10 = 26

Ratio	Description	The company
Average inventory processing period	An activity ratio equal to the number of days in the period divided by inventory turnover over the period.	Altria Group Inc.'s average inventory processing period deteriorated from 2010 to 2011 but then improved from 2011 to 2012 exceeding 2010 level.

Average Receivable Collection Period

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Receivables turnover	127.55	88.81	286.62	245.38	439.91
Average Receivable Collection Period (no. of days), Comparison to Industry
Altria Group Inc.¹	3	4	1	1	1
Industry, Consumer Goods	32	29	32	27	29

Source: Based on data from Altria Group Inc. Annual Reports

2012 Calculations

¹ Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 127.55 = 3

Ratio	Description	The company
Average receivable collection period	An activity ratio equal to the number of days in the period divided by receivables turnoverd.	Altria Group Inc.'s average receivable collection period deteriorated from 2010 to 2011 but then slightly improved from 2011 to 2012.

Operating Cycle

No. of days

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Average inventory processing period	26	27	27	28	20
Average receivable collection period	3	4	1	1	1
Operating Cycle, Comparison to Industry
Altria Group Inc.¹	29	31	28	30	21
Industry, Consumer Goods	70	63	67	65	64

Source: Based on data from Altria Group Inc. Annual Reports

2012 Calculations

¹ Operating cycle = Average inventory processing period + Average receivable collection period
= 26 + 3 = 29

Ratio	Description	The company
Operating cycle	Equal to average inventory processing period plus average receivables collection period.	Altria Group Inc.'s operating cycle deteriorated from 2010 to 2011 but then improved from 2011 to 2012 not reaching 2010 level.

Average Payables Payment Period

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Payables turnover	54.59	47.32	46.05	47.68	37.95
Average Payables Payment Period (no. of days), Comparison to Industry
Altria Group Inc.¹	7	8	8	8	10
Industry, Consumer Goods	34	28	31	24	28

Source: Based on data from Altria Group Inc. Annual Reports

2012 Calculations

¹ Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 54.59 = 7

Ratio	Description	The company
Average payables payment period	An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.	Altria Group Inc.'s average payables payment period declined from 2010 to 2011 and from 2011 to 2012.

Cash Conversion Cycle

No. of days

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data
Average inventory processing period	26	27	27	28	20
Average receivable collection period	3	4	1	1	1
Average payables payment period	7	8	8	8	10
Cash Conversion Cycle, Comparison to Industry
Altria Group Inc.¹	22	24	20	22	11
Industry, Consumer Goods	35	35	36	41	36

Source: Based on data from Altria Group Inc. Annual Reports

2012 Calculations

¹ Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 26 + 3 – 7 = 22

Ratio	Description	The company
Cash conversion cycle	A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period.	Altria Group Inc.'s cash conversion cycle deteriorated from 2010 to 2011 but then slightly improved from 2011 to 2012.