Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Diageo PLC, short-term (operating) activity ratios
Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Diageo PLC inventory turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Diageo PLC receivables turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Diageo PLC payables turnover ratio increased from 2012 to 2013 and from 2013 to 2014. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Diageo PLC working capital turnover ratio deteriorated from 2012 to 2013 but then slightly improved from 2013 to 2014. |
| Short-term activity 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. | Diageo PLC number of days of inventory outstanding deteriorated from 2012 to 2013 and from 2013 to 2014. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Diageo PLC number of days of receivables outstanding deteriorated from 2012 to 2013 and from 2013 to 2014. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Diageo PLC operating cycle deteriorated from 2012 to 2013 and from 2013 to 2014. |
| 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. | Diageo PLC number of days of payables outstanding decreased from 2012 to 2013 and from 2013 to 2014. |
| 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. | Diageo PLC cash conversion cycle deteriorated from 2012 to 2013 and from 2013 to 2014. |
Inventory Turnover
Diageo PLC, inventory turnover calculation, comparison to benchmarks
| Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | Jun 30, 2011 | Jun 30, 2010 | Jun 30, 2009 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions, translated from GBP £) | |||||||
| Cost of sales | 6,805) | 7,408) | 6,926) | 6,231) | 6,309) | 6,278) | |
| Inventories | 7,131) | 6,997) | 6,432) | 5,396) | 5,050) | 5,112) | |
| Short-term Activity Ratio | |||||||
| Inventory turnover1 | 0.95 | 1.06 | 1.08 | 1.15 | 1.25 | 1.23 | |
| Benchmarks | |||||||
| Inventory Turnover, Competitors2 | |||||||
| Altria Group Inc. | — | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).
1 2014 Calculation
Inventory turnover = Cost of sales ÷ Inventories
= 6,805 ÷ 7,131 = 0.95
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Diageo PLC inventory turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014. |
Receivables Turnover
Diageo PLC, receivables turnover calculation, comparison to benchmarks
| Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | Jun 30, 2011 | Jun 30, 2010 | Jun 30, 2009 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions, translated from GBP £) | |||||||
| Sales | 23,611) | 25,666) | 23,734) | 20,559) | 19,945) | 19,859) | |
| Trade receivables | 3,385) | 3,409) | 2,844) | 2,332) | 2,301) | 2,535) | |
| Short-term Activity Ratio | |||||||
| Receivables turnover1 | 6.98 | 7.53 | 8.34 | 8.82 | 8.67 | 7.83 | |
| Benchmarks | |||||||
| Receivables Turnover, Competitors2 | |||||||
| Altria Group Inc. | — | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).
1 2014 Calculation
Receivables turnover = Sales ÷ Trade receivables
= 23,611 ÷ 3,385 = 6.98
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Diageo PLC receivables turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014. |
Payables Turnover
Diageo PLC, payables turnover calculation, comparison to benchmarks
| Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | Jun 30, 2011 | Jun 30, 2010 | Jun 30, 2009 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions, translated from GBP £) | |||||||
| Cost of sales | 6,805) | 7,408) | 6,926) | 6,231) | 6,309) | 6,278) | |
| Trade payables | 1,525) | 1,821) | 1,753) | 1,532) | 1,298) | 1,059) | |
| Short-term Activity Ratio | |||||||
| Payables turnover1 | 4.46 | 4.07 | 3.95 | 4.07 | 4.86 | 5.93 | |
| Benchmarks | |||||||
| Payables Turnover, Competitors2 | |||||||
| Altria Group Inc. | — | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).
1 2014 Calculation
Payables turnover = Cost of sales ÷ Trade payables
= 6,805 ÷ 1,525 = 4.46
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Diageo PLC payables turnover ratio increased from 2012 to 2013 and from 2013 to 2014. |
Working Capital Turnover
Diageo PLC, working capital turnover calculation, comparison to benchmarks
| Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | Jun 30, 2011 | Jun 30, 2010 | Jun 30, 2009 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions, translated from GBP £) | |||||||
| Current assets | 12,614) | 14,243) | 11,795) | 11,126) | 10,700) | 10,032) | |
| Less: Current liabilities | 8,193) | 9,188) | 7,780) | 7,637) | 6,070) | 6,446) | |
| Working capital | 4,422) | 5,055) | 4,015) | 3,490) | 4,630) | 3,586) | |
| Sales | 23,611) | 25,666) | 23,734) | 20,559) | 19,945) | 19,859) | |
| Short-term Activity Ratio | |||||||
| Working capital turnover1 | 5.34 | 5.08 | 5.91 | 5.89 | 4.31 | 5.54 | |
| Benchmarks | |||||||
| Working Capital Turnover, Competitors2 | |||||||
| Altria Group Inc. | — | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).
1 2014 Calculation
Working capital turnover = Sales ÷ Working capital
= 23,611 ÷ 4,422 = 5.34
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Diageo PLC working capital turnover ratio deteriorated from 2012 to 2013 but then slightly improved from 2013 to 2014. |
Average Inventory Processing Period
Diageo PLC, average inventory processing period calculation, comparison to benchmarks
| Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | Jun 30, 2011 | Jun 30, 2010 | Jun 30, 2009 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Inventory turnover | 0.95 | 1.06 | 1.08 | 1.15 | 1.25 | 1.23 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average inventory processing period1 | 382 | 345 | 339 | 316 | 292 | 297 | |
| Benchmarks (no. days) | |||||||
| Average Inventory Processing Period, Competitors2 | |||||||
| Altria Group Inc. | — | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).
1 2014 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 0.95 = 382
2 Click competitor name to see calculations.
| Short-term activity 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. | Diageo PLC number of days of inventory outstanding deteriorated from 2012 to 2013 and from 2013 to 2014. |
Average Receivable Collection Period
Diageo PLC, average receivable collection period calculation, comparison to benchmarks
| Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | Jun 30, 2011 | Jun 30, 2010 | Jun 30, 2009 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Receivables turnover | 6.98 | 7.53 | 8.34 | 8.82 | 8.67 | 7.83 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average receivable collection period1 | 52 | 48 | 44 | 41 | 42 | 47 | |
| Benchmarks (no. days) | |||||||
| Average Receivable Collection Period, Competitors2 | |||||||
| Altria Group Inc. | — | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).
1 2014 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.98 = 52
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Diageo PLC number of days of receivables outstanding deteriorated from 2012 to 2013 and from 2013 to 2014. |
Operating Cycle
Diageo PLC, operating cycle calculation, comparison to benchmarks
No. days
| Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | Jun 30, 2011 | Jun 30, 2010 | Jun 30, 2009 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | 382 | 345 | 339 | 316 | 292 | 297 | |
| Average receivable collection period | 52 | 48 | 44 | 41 | 42 | 47 | |
| Short-term Activity Ratio | |||||||
| Operating cycle1 | 434 | 393 | 383 | 357 | 334 | 344 | |
| Benchmarks | |||||||
| Operating Cycle, Competitors2 | |||||||
| Altria Group Inc. | — | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).
1 2014 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 382 + 52 = 434
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Diageo PLC operating cycle deteriorated from 2012 to 2013 and from 2013 to 2014. |
Average Payables Payment Period
Diageo PLC, average payables payment period calculation, comparison to benchmarks
| Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | Jun 30, 2011 | Jun 30, 2010 | Jun 30, 2009 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Payables turnover | 4.46 | 4.07 | 3.95 | 4.07 | 4.86 | 5.93 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average payables payment period1 | 82 | 90 | 92 | 90 | 75 | 62 | |
| Benchmarks (no. days) | |||||||
| Average Payables Payment Period, Competitors2 | |||||||
| Altria Group Inc. | — | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).
1 2014 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 4.46 = 82
2 Click competitor name to see calculations.
| Short-term activity 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. | Diageo PLC number of days of payables outstanding decreased from 2012 to 2013 and from 2013 to 2014. |
Cash Conversion Cycle
Diageo PLC, cash conversion cycle calculation, comparison to benchmarks
No. days
| Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2012 | Jun 30, 2011 | Jun 30, 2010 | Jun 30, 2009 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | 382 | 345 | 339 | 316 | 292 | 297 | |
| Average receivable collection period | 52 | 48 | 44 | 41 | 42 | 47 | |
| Average payables payment period | 82 | 90 | 92 | 90 | 75 | 62 | |
| Short-term Activity Ratio | |||||||
| Cash conversion cycle1 | 352 | 303 | 291 | 267 | 259 | 282 | |
| Benchmarks | |||||||
| Cash Conversion Cycle, Competitors2 | |||||||
| Altria Group Inc. | — | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | — | |
Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).
1 2014 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 382 + 52 – 82 = 352
2 Click competitor name to see calculations.
| Short-term activity 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. | Diageo PLC cash conversion cycle deteriorated from 2012 to 2013 and from 2013 to 2014. |