Analysis of Geographic Areas
Kraft Foods Group Inc. operates in 2 regions: United States and Canada.
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- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Operating Profit Margin since 2012
- Return on Equity (ROE) since 2012
- Total Asset Turnover since 2012
- Price to Book Value (P/BV) since 2012
- Analysis of Debt
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Area Asset Turnover
Kraft Foods Group Inc., asset turnover by geographic area
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | |
|---|---|---|---|
| United States | |||
| Canada |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
The analysis of the annual geographic area asset turnover ratios reveals distinct trends for the United States and Canada over the three-year period ending in 2014.
- United States
- The asset turnover ratio showed a slight decline from 1.00 in 2012 to 0.95 in 2013 and remained stable at 0.95 in 2014. This indicates a minor reduction in the efficiency with which assets were used to generate revenue in the U.S. market, stabilizing but not recovering to the initial 2012 level.
- Canada
- The asset turnover ratio experienced a significant increase from 0.84 in 2012 to 1.34 in 2013, remaining steady at 1.34 in 2014. This suggests a marked improvement in asset utilization in the Canadian market, where the company became more effective in generating sales from its assets starting in 2013 and maintained this higher efficiency into 2014.
Overall, the data shows diverging trends between the two geographic areas: while the United States saw a slight decline and subsequent stabilization in asset turnover, Canada demonstrated substantial growth followed by stability at the higher ratio. This may indicate regional differences in operational efficiency, investment, or market conditions impacting asset utilization.
Area Asset Turnover: United States
Kraft Foods Group Inc.; United States; area asset turnover calculation
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Net revenues | |||
| Long-lived assets | |||
| Area Activity Ratio | |||
| Area asset turnover1 | |||
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1 2014 Calculation
Area asset turnover = Net revenues ÷ Long-lived assets
= ÷ =
The analysis of the annual data for the United States geographic area reveals several noteworthy trends in key financial metrics over the three-year period ending in 2014.
- Net Revenues
- Net revenues showed a slight fluctuation during the period. The revenue decreased marginally from 15,820 million US dollars in 2012 to 15,676 million US dollars in 2013, followed by a modest increase to 15,753 million US dollars in 2014. Overall, the net revenues remained relatively stable, indicating consistent sales performance without significant growth or decline.
- Long-Lived Assets
- Long-lived assets demonstrated a consistent upward trend. The value increased from 15,766 million US dollars in 2012 to 16,516 million US dollars in 2013, and slightly further to 16,536 million US dollars in 2014. This gradual increase suggests ongoing investments in long-term assets, which may reflect efforts to maintain or enhance operational capacity.
- Area Asset Turnover
- The area asset turnover ratio declined from 1.00 in 2012 to 0.95 in 2013 and remained flat through 2014. This ratio measures the efficiency of asset utilization in generating revenues. The decrease indicates a slight reduction in efficiency, potentially due to the relatively larger increase in assets compared to revenue growth. This trend may signal the need for more effective asset management or improved asset productivity.
In summary, while net revenues maintained stability, the increase in long-lived assets coupled with a declining asset turnover ratio suggests a growing asset base that is not fully leveraged to generate additional revenue. This points to potential areas for operational improvement in asset utilization efficiency.
Area Asset Turnover: Canada
Kraft Foods Group Inc.; Canada; area asset turnover calculation
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Net revenues | |||
| Long-lived assets | |||
| Area Activity Ratio | |||
| Area asset turnover1 | |||
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1 2014 Calculation
Area asset turnover = Net revenues ÷ Long-lived assets
= ÷ =
- Net Revenues
- Net revenues demonstrated a slight decline over the three-year period, beginning at 2305 million US dollars in 2012 and remaining virtually stable at 2302 million in 2013 before decreasing to 2177 million in 2014. This indicates a downward trend in revenue generation within the Canada geographic area during this timeframe.
- Long-lived Assets
- Long-lived assets saw a significant reduction from 2740 million US dollars in 2012 to 1724 million in 2013, followed by a further decrease to 1620 million in 2014. This consistent decline reflects a notable contraction in the value of long-term assets held in the Canada region, which might suggest asset disposals, impairments, or changes in investment strategy.
- Area Asset Turnover
- The area asset turnover ratio experienced a considerable improvement from 0.84 in 2012 to 1.34 in 2013, maintaining this higher level into 2014. This increase signifies enhanced efficiency in utilizing long-lived assets to generate revenues, implying better asset management or improved operational performance despite the reduction in asset base and revenue levels.
Net revenues
Kraft Foods Group Inc., net revenues by geographic area
US$ in millions
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | |
|---|---|---|---|
| United States | |||
| Canada | |||
| Exports | |||
| Total |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
- United States Net Revenues
- The net revenues in the United States remained relatively stable over the three-year period. There was a slight decrease from US$15,820 million in 2012 to US$15,676 million in 2013, followed by a minor increase to US$15,753 million in 2014. This indicates a plateau in revenue generation within the domestic market.
- Canada Net Revenues
- Net revenues in Canada showed a gradual decline during the period analyzed. The value decreased from US$2,305 million in 2012 to US$2,302 million in 2013, and further declined to US$2,177 million in 2014. This downward trend suggests a reduction in sales or market presence in the Canadian market.
- Exports Net Revenues
- Export revenues displayed consistent growth over the observed period. Starting from US$214 million in 2012, the figure increased to US$240 million in 2013 and further rose to US$275 million in 2014. This upward trajectory highlights a strengthening position in international markets outside of North America.
- Total Net Revenues
- The total net revenues experienced a marginal decline across the three years, decreasing slightly from US$18,339 million in 2012 to US$18,218 million in 2013, and then to US$18,205 million in 2014. The relative stability of the total revenues, despite declines in Canada and minor fluctuations in the United States, appears to be partially offset by growth in export revenues.
Long-lived assets
Kraft Foods Group Inc., long-lived assets by geographic area
US$ in millions
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | |
|---|---|---|---|
| United States | |||
| Canada | |||
| Total |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
- United States Long-Lived Assets
- The data indicates a steady increase in long-lived assets in the United States from 2012 to 2014. The value rose from $15,766 million in 2012 to $16,516 million in 2013, representing an approximate 4.8% increase. A marginal increase followed in 2014 to $16,536 million, indicating relative stabilization after the earlier growth period.
- Canada Long-Lived Assets
- In contrast to the United States, long-lived assets in Canada showed a significant declining trend over the same period. The value decreased from $2,740 million in 2012 to $1,724 million in 2013, a substantial reduction of approximately 37.1%. This downward trajectory continued in 2014, with assets further reducing to $1,620 million, an additional decrease of about 6.0% from the previous year.
- Total Long-Lived Assets
- The overall total long-lived assets show a slight decrease over the period examined. Beginning at $18,506 million in 2012, the total dropped to $18,240 million in 2013, a decline of roughly 1.4%. The trend of reduction persisted into 2014, with the total falling further to $18,156 million, indicating a more modest decrease of approximately 0.5% relative to the prior year.
- Insights and Patterns
- The divergent trends between the geographic areas suggest a reallocation or divestment of assets in Canada coupled with modest growth and stabilization of assets in the United States. The substantial asset reduction in Canada could imply strategic downsizing or asset sales, while the relative stability and slight increase in the United States indicate continued investment or retention of assets in that market. Despite growth in the United States, the total long-lived assets declined slightly, underscoring that decreases in Canadian assets have a stronger impact on the consolidated figures.