Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Kraft Heinz Co., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibited an initial increase from 2.81 in 2015 to 3.96 in 2016, indicating improved efficiency in using fixed assets to generate sales. Following this peak, the ratio experienced a slight decline, stabilizing around 3.68 to 3.71 during 2017 and 2018, and then decreasing modestly to 3.54 in 2019. This suggests a gradual reduction in the ability to generate sales from fixed assets over the latter years.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- The trend including operating lease right-of-use assets parallels the net fixed asset turnover closely from 2015 to 2018, reflecting consistent asset usage patterns. However, in 2019, the ratio decreased more noticeably to 3.29 compared to 3.54 without the lease assets, implying that leasing commitments had an increasing impact on asset efficiency measures in that year.
- Total Asset Turnover
- Total asset turnover showed a positive trend overall, increasing from 0.15 in 2015 to 0.22 in both 2016 and 2017, then further improving to 0.25 in 2018 and maintaining that level in 2019. This upward movement indicates a strengthening in the company's effectiveness at generating revenues from its total asset base during the period.
- Equity Turnover
- Equity turnover rose from 0.32 in 2015 to 0.46 in 2016, evidencing higher revenue generation relative to shareholders' equity. It then declined slightly to 0.40 in 2017 before recovering and reaching a peak of 0.51 in 2018. In 2019, the ratio dipped marginally to 0.48. This pattern reveals some fluctuations in turning equity into sales but generally suggests an improvement in leveraging equity over time.
Net Fixed Asset Turnover
Kraft Heinz Co., net fixed asset turnover calculation, comparison to benchmarks
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 24,977) | 26,268) | 26,232) | 26,487) | 18,338) | |
| Property, plant and equipment, net | 7,055) | 7,078) | 7,120) | 6,688) | 6,524) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 3.54 | 3.71 | 3.68 | 3.96 | 2.81 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Net fixed asset turnover = Net sales ÷ Property, plant and equipment, net
= 24,977 ÷ 7,055 = 3.54
2 Click competitor name to see calculations.
- Net Sales
- The net sales displayed an initial significant increase from 18,338 million USD in 2015 to 26,487 million USD in 2016. Following this peak, sales levels stabilized, showing minimal fluctuations with 26,232 million USD in 2017 and 26,268 million USD in 2018. There was a slight decline observed in 2019, with net sales dropping to 24,977 million USD. Overall, the trend suggests a rapid growth followed by a plateau and a mild decrease towards the end of the period.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment showed a gradual increase from 6,524 million USD in 2015 to 7,120 million USD in 2017. After this period, the figures slightly decreased to 7,078 million USD in 2018 and further to 7,055 million USD in 2019. This indicates that while the company initially invested in fixed assets, it later maintained a relatively stable asset base with minor reductions over the last two years.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio improved markedly from 2.81 in 2015 to 3.96 in 2016, reflecting a more efficient utilization of fixed assets to generate sales. Although the ratio decreased somewhat thereafter, it remained relatively high, ranging between 3.54 and 3.71 from 2017 to 2019. This sustained elevated turnover ratio suggests that the company maintained improved efficiency in using its fixed assets compared to the initial year, despite some variation.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Kraft Heinz Co., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 24,977) | 26,268) | 26,232) | 26,487) | 18,338) | |
| Property, plant and equipment, net | 7,055) | 7,078) | 7,120) | 6,688) | 6,524) | |
| Right-of-use assets, operating leases | 542) | —) | —) | —) | —) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 7,597) | 7,078) | 7,120) | 6,688) | 6,524) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 3.29 | 3.71 | 3.68 | 3.96 | 2.81 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 24,977 ÷ 7,597 = 3.29
2 Click competitor name to see calculations.
- Net Sales
- Net sales exhibited an overall increase from 18,338 million US dollars in 2015 to a peak of 26,487 million US dollars in 2016. However, subsequent years showed a stabilization followed by a slight decline, with sales recorded at 26,232 million US dollars in 2017, 26,268 million US dollars in 2018, and a decrease to 24,977 million US dollars in 2019. This indicates that after a significant increase in 2016, the company's sales plateaued and then experienced a moderate decline.
- Property, Plant and Equipment, Net
- Net property, plant, and equipment steadily increased over the five-year period, from 6,524 million US dollars in 2015 to 7,597 million US dollars in 2019. There was consistent growth each year, reflecting ongoing investments in fixed assets, including operating lease right-of-use assets, which suggests focus on asset expansion or upgrades.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio, which measures sales generated per unit of fixed asset, rose from 2.81 in 2015 to a peak of 3.96 in 2016, indicating improved efficiency in asset utilization during that period. Following this peak, the ratio declined gradually to 3.68 in 2017, slightly increased to 3.71 in 2018, and then declined more noticeably to 3.29 in 2019. This trend suggests that after an initial improvement, the efficiency of asset usage diminished over time, possibly due to the relative increase in fixed assets compared to the stabilization and slight decrease in net sales.
Total Asset Turnover
Kraft Heinz Co., total asset turnover calculation, comparison to benchmarks
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 24,977) | 26,268) | 26,232) | 26,487) | 18,338) | |
| Total assets | 101,450) | 103,461) | 120,232) | 120,480) | 122,973) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.25 | 0.25 | 0.22 | 0.22 | 0.15 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Total asset turnover = Net sales ÷ Total assets
= 24,977 ÷ 101,450 = 0.25
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period ending in 2019.
- Net Sales
- Net sales exhibited a substantial increase from 2015 to 2016, rising from approximately 18.34 billion US dollars to around 26.49 billion. After this sharp increase, net sales remained relatively stable through 2017 and 2018, with values hovering around 26.2 billion. In 2019, there was a modest decline to nearly 24.98 billion, indicating a slight downward adjustment after the previous years' stability.
- Total Assets
- Total assets showed a consistent decreasing trend during the same period. Starting at roughly 123.0 billion US dollars in 2015, total assets decreased moderately each year, declining to about 101.5 billion by the end of 2019. This suggests a possible strategic reduction of resources or asset optimization over these years.
- Total Asset Turnover
- The total asset turnover ratio increased steadily from 0.15 in 2015 to 0.25 in 2018, maintaining this level into 2019. This upward trend indicates improved efficiency in utilizing assets to generate sales, reflecting enhanced operational performance despite the reduction in total assets.
Overall, the period under review is characterized by significant growth in net sales initially, followed by stabilization and a slight decline, combined with a steady decrease in total assets. The increasing asset turnover ratio underscores improving asset utilization efficiency, which may have offset some of the declines in asset base, contributing to sustained revenue generation.
Equity Turnover
Kraft Heinz Co., equity turnover calculation, comparison to benchmarks
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 24,977) | 26,268) | 26,232) | 26,487) | 18,338) | |
| Shareholders’ equity | 51,623) | 51,657) | 66,034) | 57,358) | 57,685) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 0.48 | 0.51 | 0.40 | 0.46 | 0.32 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Equity turnover = Net sales ÷ Shareholders’ equity
= 24,977 ÷ 51,623 = 0.48
2 Click competitor name to see calculations.
The financial data reveals several notable trends and patterns over the five-year period from 2015 to 2019. Net sales experienced a significant increase from 2015 to 2016, growing from 18,338 million US dollars to 26,487 million US dollars. However, from 2016 onwards, net sales displayed a generally stable but slightly declining trend, ending at 24,977 million US dollars in 2019, which is marginally lower than the peak in 2016.
Shareholders’ equity exhibits a more volatile pattern. Initially, it slightly decreased from 57,685 million US dollars in 2015 to 57,358 million US dollars in 2016. This was followed by a considerable rise to 66,034 million US dollars in 2017, representing a significant increase in equity. Subsequently, a sharp decline occurred in 2018, with equity falling to 51,657 million US dollars, remaining relatively flat through 2019 at 51,623 million US dollars. This fluctuation suggests potential changes in retained earnings, capital restructuring, or adjustments related to asset valuation.
The equity turnover ratio, which measures net sales relative to shareholders’ equity, shows some variability. It increased from 0.32 in 2015 to 0.46 in 2016, indicating improved efficiency in using equity to generate sales. The ratio then dipped slightly to 0.40 in 2017, before rising more substantially to 0.51 in 2018. A slight decline to 0.48 was observed in 2019. Overall, the equity turnover ratio suggests moderate fluctuations in asset utilization with a peak in 2018.
- Net Sales
- Substantial growth from 2015 to 2016, followed by a stabilization and mild decline through 2019.
- Shareholders’ Equity
- Relatively stable from 2015 to 2016, a significant increase in 2017, and a sharp decrease with stability thereafter in 2018 and 2019.
- Equity Turnover
- Progressive improvement overall, with some fluctuations; peak efficiency in 2018 before a minor decrease in 2019.
In summary, while profitability in terms of net sales peaked early in the observed period, the efficiency in utilizing shareholder equity improved after 2015 with some variations. The marked change in equity position between 2017 and 2018 highlights noteworthy financial events that may warrant further examination to understand their causes and implications on company performance and financial health.