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.
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), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
- Inventory Turnover
- The inventory turnover ratio remained relatively stable from March 2013 through December 2013, fluctuating narrowly between 6.41 and 6.48. A notable increase occurred in March 2014, reaching a peak of 7.05, followed by a decline to approximately 5.73-5.84 during mid to late 2014. The ratio rose again in early 2015, reaching 7.53 before slightly decreasing to 7.2 by March 2015.
- Receivables Turnover
- The receivables turnover ratio exhibited moderate variability over the periods. It started at 16.84 in March 2013, declined to a low of 14.4 in June 2013, and rebounded to above 16 by December 2013. In 2014, the ratio remained mostly steady, between 15.01 and 16.86, before ending at 14.93 in March 2015, indicating some fluctuations but overall stability without a clear upward or downward trend.
- Payables Turnover
- The payables turnover ratio initially increased from 8.03 in March 2013 to 8.57 in June 2013, then gradually declined to a low of 6.98 in June 2014. Thereafter, it recovered progressively towards the end of 2014 and early 2015, reaching 8.69 in March 2015 before slightly retreating to 8.33. This pattern suggests fluctuating payment speeds to suppliers, with slower payments mid-2014 followed by quicker payments into 2015.
- Working Capital Turnover
- Working capital turnover demonstrated extreme volatility. From a low of 9.36 at the end of 2012, it increased modestly in early 2013 to around 15. Later in 2014, this ratio surged dramatically to very high levels of 57.45 and 54.69, and astonishingly to 1011.39 and 151.63 in early 2015. Such drastic increases may indicate unusual accounting or operational circumstances affecting working capital during this period, possibly due to a very small denominator in the turnover calculation.
- Average Inventory Processing Period
- The inventory processing period was steady at 56-57 days through 2012 and most of 2013. Beginning in March 2014, this period increased to the low 60s, peaking at 64 days in September 2014. By early 2015, it improved significantly, dropping to below 50 days. The overall pattern shows stable inventory turnover duration with a mid-period lengthening followed by a sharper reduction in early 2015.
- Average Receivable Collection Period
- The receivable collection period showed limited variation, oscillating between 21 and 25 days throughout the entire time frame. Slight increases were noted mid-2013 and mid-2014, but the period consistently returned to around 22-24 days, indicating relatively stable collection efficiency.
- Operating Cycle
- The operating cycle ranged from 70 to 88 days, initially increasing from 78 in March 2013 to a peak of 88 in September 2014. Following this peak, the cycle shortened to 70-75 days by early 2015. This trend signals longer overall operating periods in 2014 with improvement (shortening) thereafter, likely reflecting changes in inventory and receivables management.
- Average Payables Payment Period
- The average payables payment period showed a gradual increase from 44-45 days in early 2013 to peaks of approximately 51-52 days in mid-2014. Toward the end of 2014 and into early 2015, the period decreased back to the low 40s, indicating a pattern of initially slower payment to suppliers, followed by faster payments later on.
- Cash Conversion Cycle
- The cash conversion cycle, representing the net days between cash outflows and inflows, fluctuated between 23 and 39 days. It rose from 33 days in March 2013 to a high of 39 days in June 2013, then declined steadily to a low of 23 days by March 2014. Subsequently, it hovered around the mid to high 30s until dropping again to below 30 days in early 2015. This pattern points to improved cash flow efficiency during the early to mid-2014 period, with some variability thereafter.
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 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Cost of sales | 3,019) | 4,224) | 3,108) | 3,226) | 2,802) | 2,664) | 2,908) | 2,780) | 3,043) | 3,326) | 3,019) | 3,150) | 3,004) | |||||
| Inventories | 1,886) | 1,775) | 2,044) | 2,024) | 1,909) | 1,616) | 1,881) | 1,898) | 1,948) | 1,928) | 2,090) | 2,048) | 2,174) | |||||
| Short-term Activity Ratio | ||||||||||||||||||
| Inventory turnover1 | 7.20 | 7.53 | 5.77 | 5.73 | 5.84 | 7.05 | 6.41 | 6.41 | 6.44 | 6.48 | — | — | — | |||||
| 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), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Inventory turnover
= (Cost of salesQ1 2015
+ Cost of salesQ4 2014
+ Cost of salesQ3 2014
+ Cost of salesQ2 2014)
÷ Inventories
= (3,019 + 4,224 + 3,108 + 3,226)
÷ 1,886 = 7.20
2 Click competitor name to see calculations.
- Cost of Sales
- The cost of sales exhibited fluctuations over the observed periods. Initially, it increased from 3,004 million USD in March 2012 to a peak of 3,326 million USD in December 2012. Subsequently, the cost decreased to 2,664 million USD by December 2013, indicating a downward trend in that interval. However, from March 2014 onwards, it showed notable volatility, culminating in a sharp rise to 4,224 million USD in December 2014, before declining again to 3,019 million USD by March 2015.
- Inventories
- Inventory levels followed a generally declining pattern throughout the data set. Starting at 2,174 million USD in March 2012, inventories gradually reduced to 1,616 million USD by December 2013. After that, inventory values slightly increased up to 2,044 million USD in September 2014 before experiencing another decline, reaching 1,775 million USD in December 2014, and then a moderate rise to 1,886 million USD in March 2015.
- Inventory Turnover Ratio
- The inventory turnover ratio was available starting from March 2013. It remained relatively stable in the first three quarters, around 6.4, with a slight increase to 7.05 in March 2014. The ratio then decreased to a low of approximately 5.73 in September 2014, indicating slower turnover, followed by a significant increase to 7.53 in December 2014. In March 2015, the ratio slightly decreased to 7.2. This pattern suggests variability in inventory management efficiency, with periods of both slower and faster inventory turnover.
- Overall Insights
- The data suggest a correlation between inventory levels and cost of sales, with both exhibiting fluctuations but not always in tandem. The spike in cost of sales in December 2014, accompanied by the highest inventory turnover ratio during the same period, points to increased sales activity or changes in cost structure. The variability in inventory turnover indicates shifts in operational efficiency or demand patterns over time. The decline in inventory values amidst fluctuating cost of sales could suggest efforts to maintain leaner inventory levels or improvements in inventory management.
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 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Net revenues | 4,352) | 4,696) | 4,400) | 4,747) | 4,362) | 4,595) | 4,394) | 4,716) | 4,513) | 4,494) | 4,606) | 4,786) | 4,453) | |||||
| Receivables, net of allowances | 1,219) | 1,080) | 1,086) | 1,186) | 1,204) | 1,048) | 1,106) | 1,223) | 1,278) | 1,089) | 1,157) | 1,102) | 1,175) | |||||
| Short-term Activity Ratio | ||||||||||||||||||
| Receivables turnover1 | 14.93 | 16.86 | 16.67 | 15.26 | 15.01 | 17.38 | 16.38 | 14.99 | 14.40 | 16.84 | — | — | — | |||||
| 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), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Receivables turnover
= (Net revenuesQ1 2015
+ Net revenuesQ4 2014
+ Net revenuesQ3 2014
+ Net revenuesQ2 2014)
÷ Receivables, net of allowances
= (4,352 + 4,696 + 4,400 + 4,747)
÷ 1,219 = 14.93
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in key financial metrics over the observed periods.
- Net Revenues
-
Net revenues show a fluctuating pattern without a clear upward or downward trend across the reported quarters. Starting at 4,453 million US dollars in March 2012, revenues generally increased to peak near 4,786 million US dollars in June 2012, then experienced variable downward and upward swings through subsequent periods. Revenues dropped below 4,400 million in some quarters, such as March 2014 and March 2015, while peaking near 4,747 million in June 2014. This volatility suggests seasonality or variable market conditions impacting sales performance quarterly.
- Receivables, Net of Allowances
-
Receivables show a fluctuating pattern as well, ranging approximately between 1,086 million and 1,278 million US dollars. The value rose from 1,175 million in March 2012 to a high of 1,278 million in March 2013 but then declined and remained around 1,080 to 1,200 million for several quarters. The slight increases and decreases indicate ongoing variation in accounts receivable levels, possibly reflecting changes in credit terms, collection efficiency, or sales timing relative to revenue recognition.
- Receivables Turnover
-
The receivables turnover ratio, a measure of how efficiently the company collects its receivables, exhibited moderate variability over the periods where data is available. Starting at 16.84 in March 2012, the ratio decreased to a low near 14.4 in June 2013, indicating slightly slower collections during that phase. Following that, turnover improved, reaching a peak of 17.38 in March 2014, and then remained in the 15 to 17 range thereafter. These fluctuations imply changes in credit management or customer payment behaviors influencing collection rates.
Overall, the financial data indicates that both revenues and receivables experience periodic fluctuations without sustained directional trends, reflecting typical cyclical or seasonal business dynamics. Receivables turnover's moderate variability suggests ongoing adjustments in credit policy or collection practices to maintain liquidity and cash flow efficiency.
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 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Cost of sales | 3,019) | 4,224) | 3,108) | 3,226) | 2,802) | 2,664) | 2,908) | 2,780) | 3,043) | 3,326) | 3,019) | 3,150) | 3,004) | |||||
| Accounts payable | 1,629) | 1,537) | 1,561) | 1,606) | 1,598) | 1,548) | 1,460) | 1,444) | 1,463) | 1,556) | 1,510) | 1,336) | 1,350) | |||||
| Short-term Activity Ratio | ||||||||||||||||||
| Payables turnover1 | 8.33 | 8.69 | 7.56 | 7.22 | 6.98 | 7.36 | 8.26 | 8.43 | 8.57 | 8.03 | — | — | — | |||||
| 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), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Payables turnover
= (Cost of salesQ1 2015
+ Cost of salesQ4 2014
+ Cost of salesQ3 2014
+ Cost of salesQ2 2014)
÷ Accounts payable
= (3,019 + 4,224 + 3,108 + 3,226)
÷ 1,629 = 8.33
2 Click competitor name to see calculations.
- Cost of Sales
- The cost of sales exhibits considerable fluctuations over the analyzed periods. Starting at 3,004 million USD in March 2012, it increased to a peak of 3,326 million USD by December 2012, followed by a general decline reaching a low of 2,664 million USD in December 2013. Subsequently, it rose sharply again in December 2014 to 4,224 million USD before declining to 3,019 million USD in March 2015. These variations suggest periods of both increased production costs and cost control efforts.
- Accounts Payable
- Accounts payable shows a gradual upward trend over the periods examined. Beginning at 1,350 million USD in March 2012, it increased steadily with some minor fluctuations, ending at 1,629 million USD in March 2015. This steady increase indicates a gradual growth in short-term liabilities or extended payment terms to suppliers.
- Payables Turnover Ratio
- The payables turnover ratio data, available from December 2012 onward, indicates a fluctuating but generally stable trend. It started at 8.03 in December 2012, increased slightly to 8.57 in June 2013, then exhibited a declining trend reaching 6.98 in June 2014, before recovering to 8.33 by March 2015. These fluctuations may reflect changes in the company's efficiency in managing accounts payable, with the lower ratios indicating slower payments to suppliers and higher ratios suggesting quicker turnover.
- Overall Insights
- The data reveals an overall cyclical behavior in the cost of sales, which could be influenced by seasonal production cycles or market conditions. The steady increase in accounts payable suggests growing operational scale or altered payment terms, while the payables turnover ratio confirms variability in payment patterns to suppliers. Monitoring these patterns can offer insights into working capital management and operational efficiency.
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 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Current assets | 5,004) | 4,791) | 4,622) | 5,111) | 5,157) | 4,908) | 4,835) | 4,819) | 4,954) | 4,823) | 3,905) | 3,634) | 3,816) | |||||
| Less: Current liabilities | 4,884) | 4,773) | 4,291) | 4,796) | 3,534) | 3,410) | 2,899) | 3,282) | 3,367) | 3,606) | 2,569) | 2,597) | 2,480) | |||||
| Working capital | 120) | 18) | 331) | 315) | 1,623) | 1,498) | 1,936) | 1,537) | 1,587) | 1,217) | 1,336) | 1,037) | 1,336) | |||||
| Net revenues | 4,352) | 4,696) | 4,400) | 4,747) | 4,362) | 4,595) | 4,394) | 4,716) | 4,513) | 4,494) | 4,606) | 4,786) | 4,453) | |||||
| Short-term Activity Ratio | ||||||||||||||||||
| Working capital turnover1 | 151.63 | 1,011.39 | 54.69 | 57.45 | 11.13 | 12.16 | 9.36 | 11.93 | 11.59 | 15.07 | — | — | — | |||||
| 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), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Working capital turnover
= (Net revenuesQ1 2015
+ Net revenuesQ4 2014
+ Net revenuesQ3 2014
+ Net revenuesQ2 2014)
÷ Working capital
= (4,352 + 4,696 + 4,400 + 4,747)
÷ 120 = 151.63
2 Click competitor name to see calculations.
- Working Capital
- Working capital displayed considerable fluctuations over the analyzed periods. Initially, the figure was 1,336 million USD at the end of March 2012, then it dropped to 1,037 million USD by June 2012. It rebounded to 1,336 million USD again by September 2012, followed by a moderate decline to 1,217 million USD at the end of December 2012. The trend then shifted upward, reaching a peak of 1,936 million USD in September 2013. A downward movement ensued afterward, with a pronounced decline starting in March 2014, ultimately descending to a low of 18 million USD in September 2014. It slightly recovered to 120 million USD by the end of March 2015.
- Net Revenues
- Net revenues showed relative stability with slight variations throughout the periods. Starting at 4,453 million USD in March 2012, the revenues peaked at 4,786 million USD in June 2012, followed by a gradual decline and fluctuation within the range of approximately 4,300 to 4,700 million USD in subsequent quarters. By the last reported quarter, March 2015, net revenues were recorded at 4,352 million USD, indicating a slight reduction compared to the beginning of the period but overall maintaining a consistent revenue stream.
- Working Capital Turnover
- The working capital turnover ratio shows notable irregularities and extreme volatility in the available data. The earliest four quarters do not have reported values. From March 30, 2013, the ratio ranged between approximately 9.36 and 15.07, suggesting moderate efficiency in utilizing working capital relative to revenue. However, from March 29, 2014, onwards, the ratio escalated dramatically to values as high as 1,011.39 and 151.63 in subsequent quarters. This indicates an unusual situation, possibly associated with the drastic decline in working capital during the same timeframe, which inflates the turnover ratio to atypical levels.
- Summary of Patterns and Insights
- The data reveals a relatively stable revenue environment with minor fluctuations over the reported periods, suggesting steady operational performance in sales. Conversely, working capital experienced significant volatility, with an initial increase followed by a sharp decline after early 2014. The extreme changes in working capital turnover correspond to these fluctuations, hinting at possible operational or balance sheet adjustments impacting liquidity or asset management efficiency. The sharp reduction in working capital towards the later periods, coupled with sustained revenues, results in unusually high turnover ratios, which may warrant further investigation to understand the underlying causes.
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 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||
| Inventory turnover | 7.20 | 7.53 | 5.77 | 5.73 | 5.84 | 7.05 | 6.41 | 6.41 | 6.44 | 6.48 | — | — | — | |||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||
| Average inventory processing period1 | 51 | 48 | 63 | 64 | 62 | 52 | 57 | 57 | 57 | 56 | — | — | — | |||||
| 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), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 7.20 = 51
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio demonstrates a fluctuating trend over the observed periods starting from March 2013. Initially, the ratio remains relatively stable around 6.4, with minor decreases noted between March and December 2013. A notable increase occurs in March 2014, peaking at 7.05, followed by a decline to its lowest point of 5.73 in September 2014. Subsequently, the ratio improves again, reaching 7.2 by March 2015. This pattern suggests variability in the efficiency of managing inventory, with periods of both increased and decreased turnover speed.
- Average Inventory Processing Period
- The average inventory processing period, measured in number of days, inversely correlates with the inventory turnover ratio. Data from March 2013 shows a consistent duration of around 56 to 57 days until December 2013. From March 2014, the period extends significantly, reaching its maximum of 64 days in September 2014, corresponding to the lowest inventory turnover during that quarter. Following this peak, the processing period shortens notably, dropping to 48 days by March 2015. This indicates variability in the time inventory remains before processing, impacting overall operational efficiency.
- Overall Analysis
- The inventory management metrics indicate a varying balance between turnover speed and inventory holding periods over the observed quarters. Periods of higher turnover correspond with shorter inventory processing durations, reflecting improved efficiency in these intervals. Conversely, longer processing periods align with lower turnover ratios, suggesting slower movement of inventory. These fluctuations may imply adjustments in operational practices or responses to market conditions affecting inventory handling.
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 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||
| Receivables turnover | 14.93 | 16.86 | 16.67 | 15.26 | 15.01 | 17.38 | 16.38 | 14.99 | 14.40 | 16.84 | — | — | — | |||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||
| Average receivable collection period1 | 24 | 22 | 22 | 24 | 24 | 21 | 22 | 24 | 25 | 22 | — | — | — | |||||
| 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), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 14.93 = 24
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio shows a fluctuating but generally stable pattern over the observed periods from March 2012 to March 2015. Starting at 16.84 in March 2012, the ratio decreased to its lowest point of 14.4 in June 2012, indicating a slower collection of receivables. After this dip, the ratio improved and peaked at 17.38 in March 2013. Subsequent values fluctuated moderately around the 15 to 17 range, with slight declines and recoveries, ending at 14.93 in March 2015. This suggests that the efficiency in collecting receivables varied but remained within a relatively narrow range, without significant deterioration or improvement over the analyzed timeframe.
- Average Receivable Collection Period
- The average collection period, measured in days, exhibits a pattern inverse to that of the receivables turnover ratio, as expected. Starting at 22 days in March 2012, the period lengthened to a peak of 25 days in June 2012, corresponding with the dip in turnover ratio. Subsequently, the collection period shortened to 21 days by March 2013, indicating faster collections during this period. Following this, the days to collect receivables oscillated between 22 and 24 days across the subsequent quarters, ending at 24 days in March 2015. Overall, the collection period remained relatively stable with minor fluctuations, reflecting consistent management of receivables over the observed quarters.
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 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||
| Average inventory processing period | 51 | 48 | 63 | 64 | 62 | 52 | 57 | 57 | 57 | 56 | — | — | — | |||||
| Average receivable collection period | 24 | 22 | 22 | 24 | 24 | 21 | 22 | 24 | 25 | 22 | — | — | — | |||||
| Short-term Activity Ratio | ||||||||||||||||||
| Operating cycle1 | 75 | 70 | 85 | 88 | 86 | 73 | 79 | 81 | 82 | 78 | — | — | — | |||||
| 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), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 51 + 24 = 75
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period demonstrates relative stability around the mid-50s to low-60s range over the available quarters. Starting at 56 days in March 2013, it remained steady through the end of 2013, fluctuating minimally between 57 days and 57 days. In 2014, the period increased, reaching a peak of 64 days in September, then slightly declined towards the end of the year to 63 days. The first quarter of 2015 shows a notable decrease to 48 days, followed by a small increase to 51 days in the subsequent quarter. These movements suggest a period of increased inventory turnover efficiency early in 2015 compared to the previous year.
- Average Receivable Collection Period
- The average receivable collection period exhibits modest fluctuations throughout the observed time frame. Beginning at 22 days in March 2013, the period lengthened slightly to 25 days in June 2013, subsequently declining to 21 days by March 2014. Through the remainder of 2014 and into early 2015, the collection period generally stabilized within the 22-24 day range. The relatively stable pattern indicates consistent receivables management with minor deviations that do not signify any substantial changes in credit policies or customer payment behavior.
- Operating Cycle
- The operating cycle, combining the inventory processing and receivables collection, reveals variations that largely correlate with changes in the inventory period. Starting at 78 days in March 2013, it increased to a peak of 88 days in September 2014, reflecting lengthening in the operating cycle mainly driven by a higher inventory processing period. Afterward, the operating cycle shortened significantly to 70 days by March 2015, then marginally increased to 75 days. This reduction suggests improved operational efficiency in early 2015, likely due to faster inventory turnover, while the overall fluctuation highlights periods of operational adjustments affecting working capital management.
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 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||
| Payables turnover | 8.33 | 8.69 | 7.56 | 7.22 | 6.98 | 7.36 | 8.26 | 8.43 | 8.57 | 8.03 | — | — | — | |||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||
| Average payables payment period1 | 44 | 42 | 48 | 51 | 52 | 50 | 44 | 43 | 43 | 45 | — | — | — | |||||
| 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), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 8.33 = 44
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio shows a fluctuating trend over the observed quarters. Starting from 8.03 in March 2013, it increased slightly to 8.57 in June 2013, followed by a gradual decline to 7.36 by March 2014. After this dip, there was a recovery trend with the ratio rising to 8.69 in March 2015. Overall, the ratio remained within a relatively narrow range, indicating stable management of payables relative to purchases, with minor variations that suggest changes in payment strategies or supplier terms.
- Average Payables Payment Period
- The average payables payment period exhibits an inverse relationship to the payables turnover ratio. Beginning at 45 days in March 2013, it decreased to 43 days mid-year, then gradually climbed to a peak of 52 days in June 2014, indicating a longer time taken to settle payables. This increase points to a potential strategic extension of payment terms or cash flow management adjustments. After June 2014, the period shortened again, reaching 42 days in March 2015, suggesting a shift back to quicker payments to suppliers or improved liquidity.
- Overall Insights
- The interplay between these two metrics suggests a dynamic approach to managing payables, balancing payment timing with financial considerations. The company appears to have experimented with extending payment periods during late 2013 and early 2014, possibly to optimize working capital, before shortening them again in 2015. The relative stability and moderate fluctuations imply consistent supplier relationship management and an ongoing effort to maintain an efficient cash conversion cycle.
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 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||
| Average inventory processing period | 51 | 48 | 63 | 64 | 62 | 52 | 57 | 57 | 57 | 56 | — | — | — | |||||
| Average receivable collection period | 24 | 22 | 22 | 24 | 24 | 21 | 22 | 24 | 25 | 22 | — | — | — | |||||
| Average payables payment period | 44 | 42 | 48 | 51 | 52 | 50 | 44 | 43 | 43 | 45 | — | — | — | |||||
| Short-term Activity Ratio | ||||||||||||||||||
| Cash conversion cycle1 | 31 | 28 | 37 | 37 | 34 | 23 | 35 | 38 | 39 | 33 | — | — | — | |||||
| 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), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 51 + 24 – 44 = 31
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period remained steady at 56 to 57 days from March 2013 through December 2013, indicating consistent inventory turnover during that period. However, a notable decline occurred starting in March 2014, dropping to 52 days, followed by an increase to around 62 to 64 days in mid to late 2014, before decreasing again to 48 and 51 days in the first quarter of 2015. This fluctuation suggests variability in inventory management efficiency, with periods of slower turnover particularly evident in mid-2014, and improved efficiency by early 2015.
- Average Receivable Collection Period
- The average receivable collection period showed minor fluctuations, generally ranging from 21 to 25 days throughout the observed timeframe. After a slight increase from 22 days to 25 days by June 2013, it gradually decreased back to 21-22 days by December 2013. The period then stabilized mostly around 22 to 24 days, reflecting consistent management of accounts receivable with no significant trends indicating deterioration or improvement in collection efficiency.
- Average Payables Payment Period
- The average payables payment period demonstrated some variability. Initially, it decreased slightly from 45 days in March 2013 to 43-44 days in mid to late 2013, followed by an increase to a peak of 52 days in mid-2014, suggesting an extended payment cycle during that time. Towards the end of 2014 and beginning of 2015, the payment period shortened again to around 42 to 44 days, indicating a return to faster payment processing. This pattern reflects adjustments in supplier payment timing, possibly aligning with cash flow considerations or negotiation terms.
- Cash Conversion Cycle
- The cash conversion cycle, which integrates inventory, receivables, and payables periods, exhibited noticeable fluctuation. Starting at 33 days in March 2013, it rose to a high of 39 days in June 2013 before steadily decreasing to 23 days by March 2014, indicating improved overall operational efficiency and quicker cash turnover. Mid to late 2014, the cycle increased again to around 34 to 37 days but reduced to 28 and 31 days in early 2015. These changes reflect the combined effects of inventory processing, receivables collection, and payables payment management, with the lowest cycle length observed in early 2014 signaling peak efficiency within the period under review.