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.
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Short-term Activity Ratios (Summary)
Kraft Heinz Co., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-27), 10-Q (reporting date: 2015-06-28), S-4/A (reporting date: 2015-03-29).
- Inventory Turnover
- The inventory turnover ratio exhibits fluctuations within a relatively narrow range over the periods analyzed. From early 2016 through mid-2020, the ratio varied mostly between 5 and 6.5 times. Notably, there is an overall slight upward trend, with turnovers of approximately 4.8 in early 2016 rising to values just above 6 by 2020, indicating a modest improvement in inventory management and sales efficiency.
- Receivables Turnover
- The receivables turnover ratio demonstrates a marked decline over the timeframe. It starts at around 21 in early 2015, rising briefly to above 34 by late 2015 and early 2016, followed by a consistent decrease to near 10-13 by mid-2020. This trend suggests a lengthening of the collection period for receivables, potentially implying either relaxed credit policies or increased difficulties in collecting outstanding payments.
- Payables Turnover
- The payables turnover ratio shows variability but remains mostly in the range of approximately 3.5 to 5.5. After peaking near 6 in 2016, it dropped to the low 4s and has since remained relatively stable around 4 to 4.4 towards 2020. This indicates that the company is maintaining a fairly consistent pace in fulfilling its payables obligations.
- Working Capital Turnover
- A highly irregular pattern emerges in the working capital turnover ratio, with some extremely high and volatile figures recorded post-2017. Initially, values hovered between 6 and 7 in 2015 and 2016, but from 2017 onwards, spikes occur reaching extraordinarily high numbers like 2917.11 and 1948.62. These anomalies suggest data inconsistencies or one-off events that drastically altered working capital levels, thereby skewing the turnover ratio in certain quarters.
- Average Inventory Processing Period
- There is a general downward trend in the average inventory processing period, decreasing from around 76 days in early 2015 to near 60 days by mid-2020. This decline aligns with improved inventory turnover details, pointing to more efficient inventory management and faster movement of stock.
- Average Receivable Collection Period
- The number of days to collect receivables shows a gradual increase over time. Starting around 17 days in early 2015, it rises to the high twenties and low thirties by 2020. This lengthening in collection duration aligns with the observed decline in receivables turnover, potentially signaling credit extension or collection challenges.
- Operating Cycle
- The operating cycle, representing the total duration from inventory acquisition to cash collection, fluctuates but generally remains between approximately 70 and 98 days. Peaks occur between 2017 and 2018, coinciding with increases in receivable collection days, before slightly moderating toward 2020. This indicates variable but sustained periods for cash conversion.
- Average Payables Payment Period
- The average payables payment period displays relative stability around the range of 60 to nearly 100 days. There is evidence of lengthening payment days post-2015, peaking at close to 98 days, followed by a gradual decrease to the low 80s by 2020. This suggests that the company managed to extend payment periods somewhat initially but later returned to a somewhat shorter payment timeframe.
- Cash Conversion Cycle
- The cash conversion cycle (CCC) shows considerable variability, with both positive and negative values over the periods. Early periods show CCC values fluctuating between 10 and 18 days, but a notable shift occurs from 2016 onward where negative values appear, reaching as low as -23 days. Negative CCC indicates that the company collects cash from sales faster than it pays its suppliers, effectively financing operations through payables. The CCC trends back toward positive values closer to 2020. Overall, the fluctuations imply dynamic management of working capital components.
Turnover Ratios
Average No. Days
Inventory Turnover
Kraft Heinz Co., inventory turnover calculation (quarterly data)
| Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | Dec 29, 2018 | Sep 29, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 30, 2017 | Sep 30, 2017 | Jul 1, 2017 | Apr 1, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | Dec 31, 2015 | Sep 27, 2015 | Jun 28, 2015 | Mar 29, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cost of products sold | |||||||||||||||||||||||||||||
| Inventories | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Inventory turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Coca-Cola Co. | |||||||||||||||||||||||||||||
| Mondelēz International Inc. | |||||||||||||||||||||||||||||
| PepsiCo Inc. | |||||||||||||||||||||||||||||
| Philip Morris International Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-27), 10-Q (reporting date: 2015-06-28), S-4/A (reporting date: 2015-03-29).
1 Q2 2020 Calculation
Inventory turnover
= (Cost of products soldQ2 2020
+ Cost of products soldQ1 2020
+ Cost of products soldQ4 2019
+ Cost of products soldQ3 2019)
÷ Inventories
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Cost of products sold (Cogs) Trends
- The cost of products sold exhibited considerable fluctuations throughout the observed periods. Initially, from March 2015 to June 2015, there was a moderate increase from approximately 1,631 million USD to 1,734 million USD. A notable surge occurred in the third quarter of 2015, rising sharply to 4,492 million USD and further increasing to 4,720 million USD by year-end. This elevated level generally persisted throughout subsequent quarters with minor variations, peaking occasionally, for instance at 4,675 million USD in the final quarter of 2018. Toward mid-2020, a slight decrement trend is discernible, descending from 4,299 million USD in the first quarter to 4,196 million USD in the second quarter.
- Inventories Trends
- Inventories recorded a mixed trend with periodic rises and falls. The value started at 1,232 million USD in March 2015, declining slightly until mid-2015. A marked increase was seen in the latter part of 2015 and early 2016, peaking again around 3,108 million USD in the third quarter of 2016. Fluctuations continued in the following years, with values oscillating between approximately 2,600 million USD and 3,300 million USD. Towards mid-2020, inventory levels appeared relatively stable but with a marginal downward shift, ending around 2,815 million USD in June 2020.
- Inventory Turnover Ratio Analysis
- Inventory turnover ratios were available starting from late 2015 and reveal a general improvement trend over the periods covered. Beginning at 4.8, the ratio increased steadily, reaching levels above 6.0 by 2016 and maintaining relatively high levels between 5.0 and 6.5 through the subsequent years. This suggests increased efficiency in inventory management and product movement relative to costs during the timeframe. The highest ratio observed was approximately 6.5, indicating a more rapid turnover and potentially improved sales or inventory policies around that time.
- Overall Insights
- The data reflect dynamic activity in terms of cost and inventory management. The significant increase in cost of products sold during 2015 suggests possible changes in business scale, pricing, or cost structures. Inventory levels show a less volatile but periodically increasing trend, which may indicate stock buildup in response to demand or supply chain considerations. The upward trend in inventory turnover ratio is indicative of improved operational efficiencies, possibly resulting from refined inventory control or enhanced market demand. The combination of these trends highlights an operational environment adapting to shifting market conditions with a focus on balancing inventory with sales demands effectively.
Receivables Turnover
Kraft Heinz Co., receivables turnover calculation (quarterly data)
| Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | Dec 29, 2018 | Sep 29, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 30, 2017 | Sep 30, 2017 | Jul 1, 2017 | Apr 1, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | Dec 31, 2015 | Sep 27, 2015 | Jun 28, 2015 | Mar 29, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||
| Trade receivables, net of allowances | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Receivables turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Coca-Cola Co. | |||||||||||||||||||||||||||||
| Mondelēz International Inc. | |||||||||||||||||||||||||||||
| PepsiCo Inc. | |||||||||||||||||||||||||||||
| Philip Morris International Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-27), 10-Q (reporting date: 2015-06-28), S-4/A (reporting date: 2015-03-29).
1 Q2 2020 Calculation
Receivables turnover
= (Net salesQ2 2020
+ Net salesQ1 2020
+ Net salesQ4 2019
+ Net salesQ3 2019)
÷ Trade receivables, net of allowances
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The quarterly financial data reveals several notable trends in the company's operations over the observed period. Net sales exhibit fluctuations within a range, with some quarters showing marked increases followed by periods of decline. Initial quarters show net sales rising from approximately $2.5 billion to over $7 billion in late 2015, indicative of strong growth or possibly consolidation of sales figures. Subsequently, sales appear to stabilize with minor oscillations between around $6 billion and $7 billion through 2016 to mid-2018, followed by a somewhat decreasing trend towards early 2020, where net sales cluster around $6 to $6.6 billion.
Trade receivables, net of allowances, present a generally increasing pattern across the entire timeline. Starting from just under $820 million in early 2015, the values rise with some variability, peaking above $2 billion by mid to late 2018. This upward trend continues with trade receivables consistently above $2 billion after 2018, suggesting an expansion in credit extended to customers or longer collection periods. Peaks around $2.3 billion and a slight dip afterwards may indicate changes in credit policy or collection efficiency.
The receivables turnover ratio demonstrates a distinct change in operational efficiency relating to the management of receivables. Early data points show very high turnover ratios (above 20), signifying rapid collection of receivables relative to sales. However, from mid-2017 onward, there is a significant decline in this ratio, dropping sharply to levels around 10 to 13 in the final reported quarters. This suggests a deterioration in collection efficiency or a deliberate strategy to extend credit terms, aligning with the observed increase in trade receivables.
- Net Sales
- Strong initial growth up to late 2015, followed by relative stabilization and slight downturns toward 2020, indicative of fluctuating demand or market dynamics.
- Trade Receivables
- Clear increasing trend with near tripling of balances from 2015 to post-2018, potentially reflecting more relaxed credit terms or challenges in collections.
- Receivables Turnover
- High turnover ratios initially denote efficient collection, but substantial decline starting mid-2017 signals longer accounts receivable periods and possibly higher credit risk.
Overall, the data suggests that while sales have remained relatively steady after initial growth, the company has encountered or adopted extended credit practices, leading to elevated receivable balances and reduced turnover efficiency. This warrants close monitoring, as sustained increases in trade receivables combined with lower turnover ratios may impact liquidity and risk exposure.
Payables Turnover
Kraft Heinz Co., payables turnover calculation (quarterly data)
| Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | Dec 29, 2018 | Sep 29, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 30, 2017 | Sep 30, 2017 | Jul 1, 2017 | Apr 1, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | Dec 31, 2015 | Sep 27, 2015 | Jun 28, 2015 | Mar 29, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cost of products sold | |||||||||||||||||||||||||||||
| Trade payables | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Payables turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Payables Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Mondelēz International Inc. | |||||||||||||||||||||||||||||
| Philip Morris International Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-27), 10-Q (reporting date: 2015-06-28), S-4/A (reporting date: 2015-03-29).
1 Q2 2020 Calculation
Payables turnover
= (Cost of products soldQ2 2020
+ Cost of products soldQ1 2020
+ Cost of products soldQ4 2019
+ Cost of products soldQ3 2019)
÷ Trade payables
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Cost of Products Sold
- The cost of products sold demonstrates fluctuations across the quarters from March 2015 to June 2020. Initially, the values increased markedly from 1,631 million USD in March 2015 to a peak of 4,720 million USD in December 2015, indicating a substantial rise in cost during that period. This was followed by a moderate decline and subsequent oscillations around the 4,000 to 4,700 million USD range. The most recent data points show costs hovering slightly below 4,300 million USD, suggesting some stabilization but with minor variations. The trend implies episodes of increased production or purchase costs, followed by adjustments that maintain the costs within a relatively consistent band.
- Trade Payables
- Trade payables also show an increasing trend over time, beginning at 1,499 million USD in March 2015 and rising consistently to a high of 4,449 million USD by December 2017. After this peak, the values experienced some decline and fluctuations, settling around 3,800 to 4,200 million USD in the later periods. This pattern indicates that the company’s obligations to suppliers grew significantly in the first half of the observed span and then moderated moderately in the subsequent years, possibly reflecting changes in purchasing terms, supplier relationships, or payment policies.
- Payables Turnover Ratio
- The payables turnover ratio starts with available data from December 2015 at 4.42, rising to 5.97 in October 2016, indicating a faster rate of paying off suppliers in that period. After this peak, the ratio declines to around 4.17 by the end of 2017 and remains relatively stable between approximately 3.7 and 4.4 over the subsequent quarters. The slight fluctuations suggest that the company’s payment velocity to suppliers slowed down somewhat after 2016 but remained consistent thereafter. This ratio trend may reflect a strategic balance between preserving cash flow and maintaining supplier relationships.
- Overall Insights
- Across the observed periods, both the cost of products sold and trade payables increased substantially in the early years, with a tendency to stabilize or slightly decline later on. The payables turnover ratio's peak in 2016 followed by moderation indicates a shift in payment policies or operational efficiency related to supplier payments. Collectively, the trends suggest an initial phase of growth or increased procurement activity followed by a phase emphasizing tighter management of cash outflows and supplier credit terms.
Working Capital Turnover
Kraft Heinz Co., working capital turnover calculation (quarterly data)
| Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | Dec 29, 2018 | Sep 29, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 30, 2017 | Sep 30, 2017 | Jul 1, 2017 | Apr 1, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | Dec 31, 2015 | Sep 27, 2015 | Jun 28, 2015 | Mar 29, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||
| Less: Current liabilities | |||||||||||||||||||||||||||||
| Working capital | |||||||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Working capital turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Coca-Cola Co. | |||||||||||||||||||||||||||||
| Mondelēz International Inc. | |||||||||||||||||||||||||||||
| PepsiCo Inc. | |||||||||||||||||||||||||||||
| Philip Morris International Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-27), 10-Q (reporting date: 2015-06-28), S-4/A (reporting date: 2015-03-29).
1 Q2 2020 Calculation
Working capital turnover
= (Net salesQ2 2020
+ Net salesQ1 2020
+ Net salesQ4 2019
+ Net salesQ3 2019)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital figures demonstrate notable volatility throughout the observed periods. Initially, from March 2015 to September 2015, there is an increase from 1,945 million USD to 4,665 million USD, followed by a decline towards the end of 2015. A significant negative working capital is observed beginning in July 2016 (−246 million USD) and persists through the end of 2017, hitting a low of −2,866 million USD in December 2017. From early 2018, working capital fluctuates, showing improvement with positive values reaching up to 3,774 million USD in June 2020. This indicates considerable shifts in current assets and liabilities management over time.
- Net Sales
- Net sales generally maintain a cyclical pattern with quarterly fluctuations but no consistent upward or downward trend across the entire timeframe. Sales peak during the fourth quarters consistently (e.g., 7,124 million USD in December 2015, 6,891 million USD in December 2018), demonstrating seasonality. Conversely, sales dip in the first quarters of most years (e.g., 5,959 million USD in March 2019). Despite weekly fluctuations, overall net sales remain relatively stable between approximately 6,000 million USD and 7,100 million USD, with no drastic changes indicating stable revenue generation.
- Working Capital Turnover
- The working capital turnover ratio data is sporadic and limited to certain periods, showing strikingly high values in some instances (e.g., 2,917.11 in September 2018, 1,948.62 in December 2019). These extreme figures could be attributed to very low or negative working capital denominators leading to inflated ratios, questioning the reliability of these values for consistent operational efficiency assessment. When usable, the ratios range more moderately from 6.44 to 35.01, reflecting fluctuations in asset utilization relative to working capital. The irregular pattern suggests challenges or significant changes in operational cash flow dynamics.
- Summary
- The data reveals fluctuating working capital with periods of deficit followed by recovery, indicating varying liquidity positions. Net sales exhibit seasonal trends but remain relatively stable, showcasing consistent revenue flows. Working capital turnover ratios, due to data irregularities, offer limited interpretative value but suggest varying operational efficiency across quarters. Overall, the financial metrics portray a company experiencing periodic working capital stress while maintaining relatively steady sales performance amid cyclical patterns.
Average Inventory Processing Period
Kraft Heinz Co., average inventory processing period calculation (quarterly data)
| Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | Dec 29, 2018 | Sep 29, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 30, 2017 | Sep 30, 2017 | Jul 1, 2017 | Apr 1, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | Dec 31, 2015 | Sep 27, 2015 | Jun 28, 2015 | Mar 29, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Inventory turnover | |||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average inventory processing period1 | |||||||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | |||||||||||||||||||||||||||||
| Coca-Cola Co. | |||||||||||||||||||||||||||||
| Mondelēz International Inc. | |||||||||||||||||||||||||||||
| PepsiCo Inc. | |||||||||||||||||||||||||||||
| Philip Morris International Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-27), 10-Q (reporting date: 2015-06-28), S-4/A (reporting date: 2015-03-29).
1 Q2 2020 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The quarterly financial data reveals notable trends in inventory management efficiency over the analyzed periods.
- Inventory Turnover
- The inventory turnover ratio shows a general upward trend from 4.8 in early 2016 to levels exceeding 6.0 by mid-2020. After an initial increase from 4.8 to 6.13 between April 2016 and October 2016, the ratio fluctuated moderately but remained predominantly above 5.0, indicating improved effectiveness in inventory utilization. Peaks are observable in April 2017, March 2019, and March 2020, suggesting periodic enhancements in turnover efficiency.
- Average Inventory Processing Period
- The average inventory processing period, measured in days, exhibits a corresponding decreasing trend that aligns with the rise in inventory turnover, moving from 76 days in April 2016 down to approximately 60 days by mid-2020. This downward trend suggests accelerated inventory cycles and potentially improved inventory management practices. Some fluctuations appeared during mid-periods, with values ranging between 65 and 71 days, but the general pattern favors shorter holding periods over time.
Overall, the data demonstrates enhanced inventory management efficiency, characterized by quicker turnover and reduced inventory holding durations. This trend may reflect operational improvements aimed at optimizing stock levels and reducing carrying costs, thereby potentially contributing positively to the company's working capital management.
Average Receivable Collection Period
Kraft Heinz Co., average receivable collection period calculation (quarterly data)
| Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | Dec 29, 2018 | Sep 29, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 30, 2017 | Sep 30, 2017 | Jul 1, 2017 | Apr 1, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | Dec 31, 2015 | Sep 27, 2015 | Jun 28, 2015 | Mar 29, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Receivables turnover | |||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average receivable collection period1 | |||||||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | |||||||||||||||||||||||||||||
| Coca-Cola Co. | |||||||||||||||||||||||||||||
| Mondelēz International Inc. | |||||||||||||||||||||||||||||
| PepsiCo Inc. | |||||||||||||||||||||||||||||
| Philip Morris International Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-27), 10-Q (reporting date: 2015-06-28), S-4/A (reporting date: 2015-03-29).
1 Q2 2020 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The receivables turnover ratio experienced a notable increase from 21.05 in March 2015 to a peak of 34.44 in April 2017, indicating an improvement in the company's efficiency in collecting receivables during that period. Following this peak, the ratio gradually declined, reaching 25.07 by March 2018 and continuing to decrease more sharply afterward. From March 2018 to June 2020, the turnover ratio dropped substantially, hitting a low of 10.85 in March 2020 before slightly rebounding to 12.43 in June 2020. This decline suggests a reduced efficiency in collecting receivables over the latter part of the timeline.
The average receivable collection period, measured in days, reflects an inverse trend to the receivables turnover ratio. Initially, the collection period decreased from 17 days in March 2015 to a minimum of 11 days in April 2017, aligning with the increasing turnover ratio and demonstrating faster collection of receivables during this time. Afterwards, the collection period began to rise steadily, reaching 15 days by March 2018 and continuing upward, peaking at 34 days in March 2020 before slightly improving to 29 days in June 2020. The lengthening collection period indicates worsening credit management or slower customer payments in recent periods.
In summary, the data exhibits a phase of improving receivables management efficiency up to early 2017, followed by a sustained decline in efficiency through mid-2020, as evidenced by the decreasing turnover ratio and increasing collection period. The recent slight improvements in June 2020 may signal the beginning of a turnaround in receivables performance.
- Receivables Turnover Ratio
- Increased from 21.05 to peak at 34.44 (March 2015 to April 2017)
- Subsequent consistent decline to 12.43 by June 2020
- Average Receivable Collection Period
- Decreased from 17 days to 11 days (March 2015 to April 2017)
- Steady increase thereafter, reaching 34 days by March 2020
- Slight improvement to 29 days by June 2020
Operating Cycle
Kraft Heinz Co., operating cycle calculation (quarterly data)
No. days
| Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | Dec 29, 2018 | Sep 29, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 30, 2017 | Sep 30, 2017 | Jul 1, 2017 | Apr 1, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | Dec 31, 2015 | Sep 27, 2015 | Jun 28, 2015 | Mar 29, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Average inventory processing period | |||||||||||||||||||||||||||||
| Average receivable collection period | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Operating cycle1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Operating Cycle, Competitors2 | |||||||||||||||||||||||||||||
| Coca-Cola Co. | |||||||||||||||||||||||||||||
| Mondelēz International Inc. | |||||||||||||||||||||||||||||
| PepsiCo Inc. | |||||||||||||||||||||||||||||
| Philip Morris International Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-27), 10-Q (reporting date: 2015-06-28), S-4/A (reporting date: 2015-03-29).
1 Q2 2020 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period shows a fluctuating but generally decreasing trend over the analyzed quarters. Starting at 76 days in early 2016, it dropped steadily to a low of 56 days in the first quarter of 2019. Thereafter, it slightly increased and stabilized around 60 days by mid-2020. This pattern suggests improvements in inventory management efficiency up to early 2019, followed by a period of moderate stabilization.
- Average Receivable Collection Period
- The average receivable collection period remained relatively stable but increased gradually over the course of the analyzed period. It began near 17 days in early 2016, decreased to a low of 11 days in early 2017, then progressively rose to a peak of 34 days by the first quarter of 2020, before slightly declining to 29 days in mid-2020. This indicates a growing delay in receivables collection towards the latter part of the period, which could reflect changing credit policies or collection challenges.
- Operating Cycle
- The operating cycle, which combines inventory and receivables periods, exhibits a variable trend with some periods of improvement and others of deterioration. It decreased from 93 days in early 2016 to a low of 69 days in early 2017, implying a more efficient operation during this timeframe. However, from 2017 onward, the operating cycle trended upward, reaching approximately 98 days by late 2018, signaling an extension in the time taken to convert raw materials into cash. In the final reported quarters, there was a moderate decline and stabilization around 89 days. This overall pattern suggests fluctuating operational efficiency, with a notable lengthening during 2017-2018 and some recovery thereafter.
Average Payables Payment Period
Kraft Heinz Co., average payables payment period calculation (quarterly data)
| Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | Dec 29, 2018 | Sep 29, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 30, 2017 | Sep 30, 2017 | Jul 1, 2017 | Apr 1, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | Dec 31, 2015 | Sep 27, 2015 | Jun 28, 2015 | Mar 29, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Payables turnover | |||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average payables payment period1 | |||||||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | |||||||||||||||||||||||||||||
| Mondelēz International Inc. | |||||||||||||||||||||||||||||
| Philip Morris International Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-27), 10-Q (reporting date: 2015-06-28), S-4/A (reporting date: 2015-03-29).
1 Q2 2020 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio shows an initial increase from 4.42 to 5.97 between the periods ending April 3, 2016, and October 2, 2016, indicating a faster rate of paying off payables during this time. Subsequently, there is a noticeable decline to 3.72 by March 31, 2018, suggesting a slowdown in payment frequency. From that point onward, the ratio stabilizes somewhat, fluctuating moderately around values between approximately 3.7 and 4.4, reflecting a relatively consistent pace in incumbent payables management towards the end of the observed period.
- Average Payables Payment Period
- The average payables payment period in days inversely mirrors the trend observed in the payables turnover. It decreases from 83 days at an earlier date to a low of 61 days by October 2, 2016, indicating quicker payments to suppliers. After this minimum, the payment period extends sharply, reaching a peak of 98 days by March 31, 2018. Following this peak, the payment period exhibits a slight downward trend with some minor fluctuations, ranging between 83 to 92 days in the later stages, suggesting a return to a more normalized payment duration.
- Overall Observations
- The payables turnover and average payment period display an expected inverse relationship throughout the observed quarters. The initial phase points to accelerated payment activity, possibly to optimize supplier relationships or due to changes in credit terms. The subsequent elongation of the payment period and reduction in turnover ratio could reflect strategic cash management decisions or changing supplier contract conditions. The stabilization in both metrics towards the latter periods suggests an establishment of consistent payables management practices.
Cash Conversion Cycle
Kraft Heinz Co., cash conversion cycle calculation (quarterly data)
No. days
| Jun 27, 2020 | Mar 28, 2020 | Dec 28, 2019 | Sep 28, 2019 | Jun 29, 2019 | Mar 30, 2019 | Dec 29, 2018 | Sep 29, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 30, 2017 | Sep 30, 2017 | Jul 1, 2017 | Apr 1, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | Dec 31, 2015 | Sep 27, 2015 | Jun 28, 2015 | Mar 29, 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 | |||||||||||||||||||||||||||||
| Mondelēz International Inc. | |||||||||||||||||||||||||||||
| Philip Morris International Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28), 10-K (reporting date: 2019-12-28), 10-Q (reporting date: 2019-09-28), 10-Q (reporting date: 2019-06-29), 10-Q (reporting date: 2019-03-30), 10-K (reporting date: 2018-12-29), 10-Q (reporting date: 2018-09-29), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-30), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-07-01), 10-Q (reporting date: 2017-04-01), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-27), 10-Q (reporting date: 2015-06-28), S-4/A (reporting date: 2015-03-29).
1 Q2 2020 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
The financial data reveals several trends in key operational efficiency metrics over the observed periods.
- Average Inventory Processing Period
- This metric fluctuates over time but generally demonstrates a downward trend from the mid-2015 level, where it ranged around 76 days, decreasing to around 60 days by mid-2020. Notably, there are intermittent increases, with periods around late 2017 and mid-2018 showing days closer to the high 60s and low 70s, but overall the inventory turnover appears to have improved slightly towards the end of the timeline.
- Average Receivable Collection Period
- The receivable collection period shows more variability and an overall upward trend. Initially in mid-2015, collection periods were around 15 to 17 days. From early 2018 onward, there is a marked increase, peaking around 30 days during late 2018 and 2019, and remaining elevated near the high 20s to low 30s range through mid-2020. This suggests a lengthening in the time taken to collect receivables over the years.
- Average Payables Payment Period
- The payment period to suppliers experiences considerable fluctuations but mostly maintains a higher range between mid-2015 and mid-2020. Early in the timeline, days decrease from 83 to low 60s but then increase to approach and exceed 90 days in several periods through 2017 and 2018. From late 2018 forward, payment periods generally remain in the 80s, slightly decreasing toward mid-2020. This indicates a tendency to extend payable periods, possibly reflecting negotiation leverage or cash management strategies.
- Cash Conversion Cycle (CCC)
- The cash conversion cycle exhibits significant variability, shifting from positive values around 10 to 18 days in mid-2015 to negative values around -23 days in early 2017. Negative CCC indicates that the company collects cash from customers faster than it pays its suppliers. After this low, values oscillate near zero, alternating between slightly negative and positive days, ending around 6 days by mid-2020. The overall pattern shows improved efficiency in working capital management, with the company increasingly using supplier credit to finance operations.
In summary, the inventory turnover period has modestly decreased over time, indicating potential improvements in inventory management. Receivables collection time has increased, which could raise concerns over collection efficiency or credit policy changes. Payable periods have generally lengthened, suggesting strategic use of supplier credit to enhance liquidity. The cash conversion cycle trends toward a shorter or even negative duration, reflecting an operational cash flow cycle that mitigates working capital needs and improves financial flexibility.