Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Paying user area
Try for free
Kraft Foods Group Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2012
- Net Profit Margin since 2012
- Debt to Equity since 2012
- Price to Operating Profit (P/OP) since 2012
- Price to Book Value (P/BV) since 2012
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Kraft Foods Group Inc. for $22.49.
This is a one-time payment. There is no automatic renewal.
We accept:
Short-term Activity Ratios (Summary)
Kraft Foods Group Inc., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
- Inventory Turnover
- The inventory turnover ratio fluctuated moderately over the periods analyzed. Initially, it was stable around 6.4 times per year during the first three quarters of 2013, increased to 7.05 by the end of 2013, then declined to a low near 5.73 in mid-2014, before rising again to around 7.2 by the first quarter of 2015. This indicates some variability in the rate at which inventory was sold and replaced, with a notable dip in mid-2014.
- Receivables Turnover
- The receivables turnover showed a general upward trend through 2013, moving from 14.4 to a peak of 17.38 in the fourth quarter of that year. However, in 2014 and early 2015, the ratio stabilized mostly between 15 and 17, ending slightly lower at 14.93. This suggests weaker collections efficiency or lengthening in the time customers take to pay during the latter periods.
- Payables Turnover
- Payables turnover decreased from 8.57 in early 2013 to 7.36 by year-end 2013, indicating slower payments to suppliers. There was a further slight decline to 6.98 in the first quarter of 2014, after which the ratio showed recovery, reaching 8.69 in late 2014 before settling at 8.33 in early 2015. This reflects a pattern of delayed payment periods initially followed by acceleration in paying suppliers towards the end of the observed timeframe.
- Working Capital Turnover
- This ratio exhibited extreme volatility, particularly from the second quarter of 2014 onwards. After relatively stable values around 9 to 12 times in 2013 and early 2014, there was a sudden and dramatic increase to over 57 in mid-2014 and an exceptional peak exceeding 1,000 by the fourth quarter of 2014, before reducing but remaining extraordinarily high at 151.63 at the start of 2015. Such spikes suggest either a significant reduction in working capital or substantial increases in sales, warranting further investigation into possible changes in accounting policies or operational activities.
- Average Inventory Processing Period
- The days inventory was held remained fairly consistent around 57 days in early 2013, shortened slightly to 52 days by year-end 2013, then lengthened again to the low 60s through most of 2014 before abruptly decreasing to 48 days in late 2014 and slightly rising to 51 days in early 2015. This indicates improvements in inventory management toward the end of the period, reducing the amount of time inventory was stored.
- Average Receivable Collection Period
- The collection period for receivables hovered between 21 and 25 days across the full timeframe, showing limited variation. There is a slight tendency for values to increase into the mid-20s during 2014, suggesting some extension in credit terms or slower payments received from customers.
- Operating Cycle
- The operating cycle shortened gradually from 82 days in early 2013 to 70 days by the end of 2014, reflecting improvements in the overall efficiency of converting inventory and receivables into cash. However, it increased again to 75 days in early 2015, suggesting some reversal in the efficiency gains achieved previously.
- Average Payables Payment Period
- The payment period for payables generally increased from 43-44 days in early 2013 to a peak of 52 days in early 2014, then declined toward 42 days at the end of 2014, and slightly rose to 44 days in early 2015. This pattern indicates initially slower payments to suppliers, followed by quicker settlements near the end of 2014, and some moderation afterward.
- Cash Conversion Cycle
- The cash conversion cycle declined significantly from 39 days in early 2013 down to 23 days by the end of 2013, indicating better management of cash flow and quicker recovery of invested cash. It increased slightly to the mid-to-high 30s across most of 2014, then dropped again to under 30 days in late 2014 and early 2015. Overall, the company has improved its cash conversion efficiency compared to 2013, albeit with periodic fluctuations.
Turnover Ratios
Average No. Days
Inventory Turnover
Kraft Foods Group Inc., inventory turnover calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||
| Cost of sales | |||||||||||||
| Inventories | |||||||||||||
| Short-term Activity Ratio | |||||||||||||
| Inventory turnover1 | |||||||||||||
| Benchmarks | |||||||||||||
| Inventory Turnover, Competitors2 | |||||||||||||
| lululemon athletica inc. | |||||||||||||
| Nike Inc. | |||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
1 Q1 2015 Calculation
Inventory turnover
= (Cost of salesQ1 2015
+ Cost of salesQ4 2014
+ Cost of salesQ3 2014
+ Cost of salesQ2 2014)
÷ Inventories
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the cost of sales, inventories, and inventory turnover ratios over the examined periods.
- Cost of Sales
- The cost of sales displayed variability, initially declining from 3043 million USD to 2664 million USD between the first quarter of 2013 and the fourth quarter of 2013. Subsequently, there was a general upward trend with some fluctuations, rising to a peak of 4224 million USD in the fourth quarter of 2014 before decreasing to 3019 million USD in the first quarter of 2015. This indicates some seasonality or irregular spikes in procurement or production costs during this interval.
- Inventories
- Inventories followed a somewhat steady pattern with minor fluctuations, starting at 1948 million USD and showing a slight decrease during 2013, reaching a low of 1616 million USD in the fourth quarter of 2013. Inventories then gradually increased again throughout 2014, peaking at 2044 million USD in the third quarter of 2014, followed by a decline to 1886 million USD in the first quarter of 2015. The pattern suggests careful inventory management with adjustments likely responding to sales and production demands.
- Inventory Turnover Ratio
- The inventory turnover ratio exhibited fluctuations reflective of the changes in cost of sales and inventory levels. Initially stable around 6.4 in early 2013, it peaked at 7.05 in the last quarter of 2013 following the decrease in inventories and cost of sales. During 2014, the turnover ratio decreased to roughly 5.7, corresponding with a rise in inventory levels and cost of sales. The most significant increase in turnover ratio occurred in the last quarter of 2014, reaching 7.53, indicating more efficient inventory management or higher sales efficiency during that period. The ratio slightly decreased to 7.2 in early 2015.
Overall, the data indicate that while cost of sales experienced volatility, inventories were managed with moderate fluctuations. The inventory turnover ratio reflects these dynamics, showing periods of enhanced efficiency particularly near year-end quarters, which may align with seasonal business cycles.
Receivables Turnover
Kraft Foods Group Inc., receivables turnover calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||
| Net revenues | |||||||||||||
| Receivables, net of allowances | |||||||||||||
| Short-term Activity Ratio | |||||||||||||
| Receivables turnover1 | |||||||||||||
| Benchmarks | |||||||||||||
| Receivables Turnover, Competitors2 | |||||||||||||
| lululemon athletica inc. | |||||||||||||
| Nike Inc. | |||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
1 Q1 2015 Calculation
Receivables turnover
= (Net revenuesQ1 2015
+ Net revenuesQ4 2014
+ Net revenuesQ3 2014
+ Net revenuesQ2 2014)
÷ Receivables, net of allowances
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Revenues
- Net revenues exhibit a fluctuating pattern over the observed periods. Initially, there is an increase from 4513 million US dollars in the first quarter of 2013 to a peak of 4716 million in the second quarter of 2013. This is followed by a decline to 4394 million in the third quarter of 2013 and a moderate recovery to 4595 million in the fourth quarter of 2013. A similar cyclical variation is observed in 2014, with revenues ranging between roughly 4362 and 4747 million US dollars. Into the first quarter of 2015, net revenues decline again to 4352 million US dollars, indicating a recurring downward adjustment after seasonal or cyclical peaks.
- Receivables, Net of Allowances
- The net receivables trend also fluctuates in a pattern that loosely mirrors the net revenues but with less pronounced variation. Starting at 1278 million US dollars in the first quarter of 2013, receivables decrease steadily through the end of 2013 to 1048 million. This decline is reversed in 2014, where receivables increase somewhat, reaching 1204 million by the first quarter and fluctuating near that level throughout the year. By the first quarter of 2015, receivables return to a similar level of 1219 million US dollars, indicating some recovery relative to the end of 2013 levels.
- Receivables Turnover
- Receivables turnover, expressed as a ratio, shows a generally increasing trend from 14.4 in the first quarter of 2013 to a high of 17.38 in the fourth quarter of 2013. This upward movement suggests improved efficiency in collections during 2013. In 2014, the ratio remains relatively stable, fluctuating narrowly between about 15.01 and 16.86, indicating a maintained but less dynamic collection efficiency compared to 2013. The first quarter of 2015 sees a slight decline to 14.93, which may imply a reduction in collection efficiency at the beginning of that year.
Payables Turnover
Kraft Foods Group Inc., payables turnover calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||
| Cost of sales | |||||||||||||
| Accounts payable | |||||||||||||
| Short-term Activity Ratio | |||||||||||||
| Payables turnover1 | |||||||||||||
| Benchmarks | |||||||||||||
| Payables Turnover, Competitors2 | |||||||||||||
| lululemon athletica inc. | |||||||||||||
| Nike Inc. | |||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
1 Q1 2015 Calculation
Payables turnover
= (Cost of salesQ1 2015
+ Cost of salesQ4 2014
+ Cost of salesQ3 2014
+ Cost of salesQ2 2014)
÷ Accounts payable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial analysis of the quarterly data reveals notable trends and fluctuations in cost of sales, accounts payable, and payables turnover ratios over the examined periods.
- Cost of Sales
- The cost of sales exhibits considerable variation across the quarters, ranging from a low of 2,664 million US dollars to a high of 4,224 million US dollars. Initially, there is a decreasing trend from March 2013 (3,043 million) to December 2013 (2,664 million), followed by a rebound to 2,802 million in the first quarter of 2014. Subsequently, the cost surges to 3,226 million in the second quarter of 2014 and remains relatively high, peaking at 4,224 million in December 2014 before falling back to 3,019 million by March 2015. This volatility may indicate seasonal impacts, supply chain changes, or fluctuating demand levels affecting production costs.
- Accounts Payable
- Accounts payable values show a generally increasing but stable pattern, ranging from 1,444 million US dollars in June 2013 to 1,629 million US dollars in March 2015. After a slight decline early in the data, the payable figure climbs steadily through 2014, maintaining a narrow range between 1,537 and 1,629 million in the final quarters measured. This trend suggests a controlled but gradually expanding credit utilization from suppliers, possibly reflecting growing operational scale or negotiated payment terms.
- Payables Turnover Ratio
- The payables turnover ratio indicates the frequency at which the company pays off its suppliers within each period. The ratio declines from a high of 8.57 in March 2013 to a low of 6.98 in March 2014, implying a slower payment cycle during that time. Post this trough, the turnover ratio recovers modestly to peak at 8.69 in December 2014 before settling at 8.33 in March 2015. The fluctuations might reflect changes in payment strategies or supplier agreements, with a tendency towards improved payment efficiency late in the period.
Overall, the analyzed metrics demonstrate a landscape of fluctuating cost pressures alongside a generally considered approach to managing payables, with periods of slower and faster turnover reflecting dynamic financial and operational circumstances.
Working Capital Turnover
Kraft Foods Group Inc., working capital turnover calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||
| Current assets | |||||||||||||
| Less: Current liabilities | |||||||||||||
| Working capital | |||||||||||||
| Net revenues | |||||||||||||
| Short-term Activity Ratio | |||||||||||||
| Working capital turnover1 | |||||||||||||
| Benchmarks | |||||||||||||
| Working Capital Turnover, Competitors2 | |||||||||||||
| lululemon athletica inc. | |||||||||||||
| Nike Inc. | |||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
1 Q1 2015 Calculation
Working capital turnover
= (Net revenuesQ1 2015
+ Net revenuesQ4 2014
+ Net revenuesQ3 2014
+ Net revenuesQ2 2014)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data indicates fluctuations in the company’s working capital, net revenues, and working capital turnover over the observed periods.
- Working Capital
- The working capital demonstrates variability with values initially around the 1500 US$ million range at the start of 2013, peaking near 1936 US$ million in the third quarter of 2013. However, notable declines occur afterward, reaching a low of 18 US$ million by the end of 2014, before a slight increase to 120 US$ million in the first quarter of 2015. This pattern suggests periods of tightening liquidity and potential challenges in short-term asset management.
- Net Revenues
- Net revenues show relative stability with cyclical fluctuations within a range between approximately 4300 and 4750 US$ million throughout the periods. Revenues rise and fall in a somewhat consistent quarterly pattern without any significant upward or downward trend, indicating steady sales performance without marked growth or contraction.
- Working Capital Turnover
- Working capital turnover experiences extreme volatility, starting at levels around 10 to 12 in the early quarters, which is typical for this ratio. However, a pronounced spike occurs beginning mid-2014, with turnover ratios surging dramatically to figures exceeding 1000 by late 2014 before settling around 150 in early 2015. This abnormal increase likely results from the sharp contraction in working capital, inflating the turnover ratio and potentially signaling operational challenges or changes in working capital management strategy.
In summary, the data shows stable revenue generation juxtaposed with significant changes in working capital management. The drastic reduction in working capital combined with extraordinarily high turnover ratios in the latter periods may indicate increased efficiency or possibly liquidity stress. These patterns warrant closer examination to understand the underlying causes and implications for ongoing financial health and operational strategy.
Average Inventory Processing Period
Kraft Foods Group Inc., average inventory processing period calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||
| Inventory turnover | |||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||
| Average inventory processing period1 | |||||||||||||
| Benchmarks (no. days) | |||||||||||||
| Average Inventory Processing Period, Competitors2 | |||||||||||||
| lululemon athletica inc. | |||||||||||||
| Nike Inc. | |||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
1 Q1 2015 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio exhibits moderate fluctuations over the observed periods. Initially, the ratio remains relatively stable around 6.4 from the first to the third quarter of 2013, followed by an increase to 7.05 in the fourth quarter of 2013. A decline is then observed throughout the first three quarters of 2014, reaching a low near 5.73. Subsequently, the ratio rises sharply in the fourth quarter of 2014 to 7.53, before experiencing a slight decrease to 7.2 in the first quarter of 2015. This pattern indicates periods of both improving and weakening inventory management efficiency, with the most notable improvement occurring at the end of 2014.
- Average Inventory Processing Period
- The average inventory processing period, expressed in days, shows an inverse trend relative to the inventory turnover ratio as expected. During the first three quarters of 2013, the processing period holds steady at 57 days, then shortens to 52 days in the fourth quarter of 2013, suggesting improved inventory velocity at that time. However, this is followed by a consistent lengthening throughout 2014, peaking at 64 days in the second quarter and slightly decreasing to 63 days in the third quarter. A notable reduction occurs again in the fourth quarter of 2014 to 48 days, improving further to 51 days in the first quarter of 2015. These variations indicate shifts in inventory management effectiveness, with longer processing periods in mid-2014 implying slower inventory turnover and shorter periods at the end of 2014 suggesting enhanced management efficiency.
Average Receivable Collection Period
Kraft Foods Group Inc., average receivable collection period calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||
| Receivables turnover | |||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||
| Average receivable collection period1 | |||||||||||||
| Benchmarks (no. days) | |||||||||||||
| Average Receivable Collection Period, Competitors2 | |||||||||||||
| lululemon athletica inc. | |||||||||||||
| Nike Inc. | |||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
1 Q1 2015 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibits an overall increasing trend from March 2013 to December 2013, rising from 14.4 to 17.38. This indicates accelerating efficiency in collecting receivables during that period. In 2014, the ratio fluctuates moderately, starting at 15.01 in March and gradually increasing towards 16.86 by December, before decreasing to 14.93 in March 2015. These variations suggest some inconsistency in receivables management near the end of the observed time frame.
- Average Receivable Collection Period
- The average receivable collection period decreases from 25 days in March 2013 to 21 days by December 2013, reflecting a faster conversion of receivables into cash within that year. However, in 2014 and into early 2015, the collection period stabilizes around 22 to 24 days, indicating a relative plateau in collection efficiency after the initial improvement.
- Overall Analysis
- The inverse relationship between receivables turnover and average collection period is evident, with improvements in one metric corresponding to declines in the other. The initial period shows marked enhancement in receivables management, while the latter periods are characterized by more stable, but somewhat fluctuating, performance. This pattern may imply that initial operational adjustments were effective, but sustaining those improvements faced challenges over time.
Operating Cycle
Kraft Foods Group Inc., operating cycle calculation (quarterly data)
No. days
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||
| Average inventory processing period | |||||||||||||
| Average receivable collection period | |||||||||||||
| Short-term Activity Ratio | |||||||||||||
| Operating cycle1 | |||||||||||||
| Benchmarks | |||||||||||||
| Operating Cycle, Competitors2 | |||||||||||||
| lululemon athletica inc. | |||||||||||||
| Nike Inc. | |||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
1 Q1 2015 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
- Inventory Processing Period
- The average inventory processing period began at 57 days in the first quarter of 2013, remaining steady through the third quarter of that year before decreasing to 52 days by the end of 2013. Thereafter, it increased to a peak of 64 days in the second quarter of 2014, then gradually declined to 48 days by the end of 2014, followed by a slight rise to 51 days in the first quarter of 2015. This indicates variability with periods of both improvement in inventory turnover efficiency and temporary slowdowns.
- Receivable Collection Period
- The average receivable collection period exhibited relative stability throughout the periods, fluctuating modestly between 21 and 25 days. It started at 25 days in early 2013, gradually declined to 21 days by the end of 2013, and then stabilized around 22 to 24 days through early 2015. This suggests consistent credit and collection practices without significant disruption.
- Operating Cycle
- The operating cycle, reflecting the combined duration of inventory handling and receivables collection, showed a declining trend in 2013 from 82 days to 73 days. In 2014, the cycle expanded, peaking at 88 days in the second quarter, then decreased sharply to 70 days by the year's end. The first quarter of 2015 experienced a modest increase to 75 days. These fluctuations correspond with the changes in inventory processing and suggest periods of reduced and improved operational efficiency.
Average Payables Payment Period
Kraft Foods Group Inc., average payables payment period calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||
| Payables turnover | |||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||
| Average payables payment period1 | |||||||||||||
| Benchmarks (no. days) | |||||||||||||
| Average Payables Payment Period, Competitors2 | |||||||||||||
| lululemon athletica inc. | |||||||||||||
| Nike Inc. | |||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
1 Q1 2015 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio exhibited a declining trend during the initial three quarters, moving from 8.57 to 7.36, which suggests that the company was taking longer to pay its suppliers over this period. After reaching a low point of 6.98 in March 2014, the ratio showed signs of recovery, increasing to 8.69 by December 2014, before slightly decreasing again to 8.33 in March 2015. This pattern indicates varying payment efficiency, with an overall tendency to improve payment speed toward the end of the observation period.
- Average Payables Payment Period
- The average payables payment period in days generally mirrored the inverse pattern of the payables turnover ratio. Initially, it increased from 43 days in March 2013 to a peak of 52 days in March 2014, reflecting slower payments to suppliers. Subsequently, the payment period decreased steadily to 42 days by December 2014, suggesting quicker payments. There was a slight increase back to 44 days in March 2015. This fluctuation aligns with the changes observed in the payables turnover ratio.
- Overall Insights
- Throughout the observed periods, the company displayed variable payment behaviors, initially extending the time taken to settle payables, possibly to optimize cash flow or manage liquidity constraints. The later quarters showed a reversal towards faster payments, potentially indicating improved cash management or changes in supplier terms. The correlation between the payables turnover ratio and the average payment period confirms the consistency of these trends.
Cash Conversion Cycle
Kraft Foods Group Inc., cash conversion cycle calculation (quarterly data)
No. days
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||
| Average inventory processing period | |||||||||||||
| Average receivable collection period | |||||||||||||
| Average payables payment period | |||||||||||||
| Short-term Activity Ratio | |||||||||||||
| Cash conversion cycle1 | |||||||||||||
| Benchmarks | |||||||||||||
| Cash Conversion Cycle, Competitors2 | |||||||||||||
| lululemon athletica inc. | |||||||||||||
| Nike Inc. | |||||||||||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30).
1 Q1 2015 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
- Inventory Processing Period
- The average inventory processing period remained stable at 57 days for the first three quarters of 2013 before decreasing to 52 days in the final quarter of 2013. In 2014, this period increased, peaking at 64 days in the second quarter, before gradually declining to 48 days in the last quarter. The first quarter of 2015 saw a slight increase to 51 days. Overall, the inventory processing period fluctuated with a notable increase in the first half of 2014 followed by improvement towards the end of that year and early 2015.
- Receivable Collection Period
- The average receivable collection period experienced a downward trend from 25 days in the first quarter of 2013 to 21 days by the fourth quarter of 2013. This was followed by a slight increase to 24 days at the start of 2014, maintaining relative stability around 22 to 24 days for the subsequent periods. This suggests consistent efficiency in collecting receivables over time, with minor variations but no significant deterioration.
- Payables Payment Period
- The average payables payment period increased steadily throughout 2013 from 43 to 50 days. This upward trend continued into the first half of 2014, reaching a peak of 52 days in the first quarter, before declining in the latter half of 2014 and stabilizing around 42 to 44 days by early 2015. This indicates an initial extension of payment terms to suppliers followed by a return to shorter payment cycles towards the end of the period analyzed.
- Cash Conversion Cycle
- The cash conversion cycle improved from 39 days in the first quarter of 2013 to 23 days by the fourth quarter, reflecting better working capital management. However, it increased again in early 2014, reaching between 34 and 37 days for most of that year. The cycle shortened towards the end of 2014 to 28 days and slightly increased to 31 days in the first quarter of 2015. This pattern shows variability in the cycle, with periods of both improvement and elongation, suggesting fluctuations in the efficiency of converting resource inputs into cash flows.