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 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).
- Inventory Turnover
- The inventory turnover ratio exhibits moderate fluctuations over the observed periods, ranging from a low of approximately 5.16 to a high near 6.5. Although there is no consistent upward or downward trend, the values generally hover around 5 to 6, indicating relative stability in how efficiently inventory is managed.
- Receivables Turnover
- Receivables turnover shows a notable decline during the timeframe. Initially, the ratio peaks around 34.44 but gradually decreases to a range between approximately 10.85 and 12.93 in the latter periods. This trend suggests a slow-down in the rate at which receivables are collected, potentially indicating longer credit periods or challenges in collections.
- Payables Turnover
- The payables turnover ratio generally declines from roughly 5.46 to near 4 or slightly above in the later periods. This suggests the company is taking longer to pay its suppliers over time, as reflected in the increasing average payables payment period.
- Working Capital Turnover
- The working capital turnover demonstrates significant volatility, especially evident with extraordinarily high values in a few quarters, such as 2917.11 and 1948.62. This irregularity may result from data anomalies or extraordinary financial events. Excluding these outliers, the turnover shows a generally high magnitude with fluctuations, pointing to variability in how effectively working capital is used to generate revenue.
- Average Inventory Processing Period
- The number of days to process inventory fluctuates moderately between approximately 56 and 71 days. The trend shows some improvement in certain periods, such as reductions to the high 50s and mid-60s, but overall remains relatively consistent, indicating stable inventory management duration.
- Average Receivable Collection Period
- The average days to collect receivables increase notably from around 11-15 days early on to values hovering between 27 and 34 days in later periods. This lengthening suggests slower collection cycles and a potential increase in credit risk or leniency in payment terms extended to customers.
- Operating Cycle
- The operating cycle, which reflects the sum duration of inventory processing and receivables collection, exhibits an upward movement from about 69 days to a range near the mid-90s. This indicates a lengthening in the overall time required to convert resources into cash through operations.
- Average Payables Payment Period
- Conversely, the average payables payment period generally trends upwards from around 60-67 days to values approaching or slightly exceeding 90 days before settling back to the low 80s. This suggests an increasing tendency to extend payment terms with suppliers before returning closer to previous levels.
- Cash Conversion Cycle
- The cash conversion cycle demonstrates significant swings, ranging from negative values (as low as -23 days) to positive values up to 18 days. Negative values indicate scenarios where the company receives cash from customers before paying suppliers, reflecting efficient cash flow management during those periods. However, later periods show a movement back toward positive values, implying a slight increase in the time cash remains tied up in operations.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cost of products sold | 4,196) | 4,299) | 4,429) | 4,129) | 4,324) | 3,948) | 4,675) | 4,289) | 4,343) | 4,040) | 4,470) | 4,000) | 3,996) | 4,063) | 4,398) | 4,049) | 4,262) | 4,192) | ||||||
| Inventories | 2,815) | 2,831) | 2,721) | 3,158) | 3,074) | 3,118) | 2,667) | 3,287) | 3,161) | 3,144) | 2,815) | 3,188) | 3,065) | 3,151) | 2,684) | 3,108) | 2,881) | 2,892) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Inventory turnover1 | 6.06 | 6.07 | 6.19 | 5.41 | 5.61 | 5.53 | 6.50 | 5.22 | 5.33 | 5.25 | 5.87 | 5.16 | 5.39 | 5.32 | 6.30 | 5.54 | 6.13 | 5.23 | ||||||
| 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).
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
= (4,196 + 4,299 + 4,429 + 4,129)
÷ 2,815 = 6.06
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends in the cost of products sold, inventories, and inventory turnover ratios over the periods observed.
- Cost of Products Sold
- The cost of products sold fluctuates across the quarters without a consistent upward or downward trajectory. Values typically range between approximately 4,000 million US dollars and 4,700 million US dollars. There are cyclical peaks visible around the fourth quarters of 2016, 2017, and 2018, indicating potential seasonal increases in cost associated with these periods. The data for 2020 reveals that the cost remains relatively stable compared to previous years, with a slight decline visible by the latest quarter.
- Inventories
- Inventories also exhibit cyclical patterns. Generally, inventory levels peak in the first and third quarters, then decrease toward the fourth quarters each year. This recurring pattern may reflect inventory management strategies responding to seasonal demand or production cycles. Inventory amounts hover between approximately 2,680 million US dollars and 3,300 million US dollars, with some quarters showing a slight reduction over the overall time span, suggesting efforts to optimize inventory holding levels.
- Inventory Turnover Ratio
- The inventory turnover ratio fluctuates moderately over the periods, generally ranging between 5.16 and 6.5. This ratio indicates the frequency at which inventories are sold and replaced in a given period. Notably, higher turnover rates appear in some fourth quarters, particularly in December 2016 and December 2018, implying efficient inventory utilization during those times. Throughout the timeline, the turnover ratio does not exhibit a strict upward or downward trend but fluctuates within a fairly narrow range, reflecting a stable inventory management performance.
Overall, the financial data demonstrate seasonal variation patterns in cost of goods sold and inventories, with corresponding effects on inventory turnover ratios. The company appears to maintain relatively stable inventory management and cost control practices despite some quarter-to-quarter variability. The absence of a strong trend in either direction suggests steady operational conditions without major disruptions impacting these financial elements over the analyzed periods.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Net sales | 6,648) | 6,157) | 6,536) | 6,076) | 6,406) | 5,959) | 6,891) | 6,383) | 6,690) | 6,304) | 6,877) | 6,314) | 6,677) | 6,364) | 6,857) | 6,267) | 6,793) | 6,570) | ||||||
| Trade receivables, net of allowances | 2,045) | 2,321) | 1,973) | 1,959) | 2,049) | 2,010) | 2,129) | 2,032) | 1,950) | 1,044) | 921) | 938) | 913) | 886) | 769) | 855) | 1,114) | 939) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Receivables turnover1 | 12.43 | 10.85 | 12.66 | 12.93 | 12.51 | 12.90 | 12.34 | 12.92 | 13.43 | 25.07 | 28.48 | 27.94 | 28.66 | 29.66 | 34.44 | 31.29 | 23.88 | 23.89 | ||||||
| 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).
1 Q2 2020 Calculation
Receivables turnover
= (Net salesQ2 2020
+ Net salesQ1 2020
+ Net salesQ4 2019
+ Net salesQ3 2019)
÷ Trade receivables, net of allowances
= (6,648 + 6,157 + 6,536 + 6,076)
÷ 2,045 = 12.43
2 Click competitor name to see calculations.
- Net Sales
- Net sales values exhibit a recurring seasonal pattern with fluctuations around a generally stable range from approximately 6,300 to 6,900 million US dollars over the observed periods. The data shows a slight decline starting in early 2018, with sales dropping closer to the lower end of the range by 2019 and maintaining similar levels through mid-2020. Despite these fluctuations, the overall trend does not reflect a significant upward or downward trajectory over the full period.
- Trade Receivables, Net of Allowances
- Trade receivables present a notable increasing trend, especially pronounced from early 2018 onward. Beginning at around 939 million US dollars in April 2016, receivables rise sharply by mid-2018 to over 2,000 million US dollars, peaking near 2,300 million at the start of 2020 before slightly declining by mid-2020. This growth in receivables is indicative of either extended credit terms, slower collection, or an increase in sales on credit. The acceleration starting around 2018 suggests a change in working capital management or customer payment behaviors.
- Receivables Turnover Ratio
- The receivables turnover ratio declines significantly over the period, falling from high levels near 30 in 2016 and early 2017 to roughly 12 by the end of 2018, and further down to approximately 11-13 through 2020. This downward trend supports the observation of rising trade receivables and indicates a slowing in the rate at which receivables are being collected. A lower turnover ratio typically suggests longer collection periods, which may impact cash flow and working capital efficiency.
- Summary and Insights
- The combination of relatively steady net sales with increasing trade receivables and a declining receivables turnover ratio points to a deterioration in the efficiency of receivables collections. The increase in outstanding receivables without a proportional increase in sales suggests an elongation of the cash conversion cycle. This change warrants closer scrutiny to assess the potential impact on liquidity and to identify underlying causes such as changes in credit policies, customer payment delays, or operational factors affecting collections. Managing receivables more effectively could be necessary to maintain healthy cash flows and financial stability.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cost of products sold | 4,196) | 4,299) | 4,429) | 4,129) | 4,324) | 3,948) | 4,675) | 4,289) | 4,343) | 4,040) | 4,470) | 4,000) | 3,996) | 4,063) | 4,398) | 4,049) | 4,262) | 4,192) | ||||||
| Trade payables | 3,880) | 3,956) | 4,003) | 4,156) | 4,153) | 4,184) | 4,153) | 4,312) | 4,326) | 4,241) | 4,449) | 3,947) | 3,888) | 3,936) | 3,996) | 3,456) | 2,960) | 2,773) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Payables turnover1 | 4.40 | 4.34 | 4.20 | 4.11 | 4.15 | 4.12 | 4.18 | 3.98 | 3.90 | 3.89 | 3.72 | 4.17 | 4.25 | 4.26 | 4.23 | 4.98 | 5.97 | 5.46 | ||||||
| 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).
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
= (4,196 + 4,299 + 4,429 + 4,129)
÷ 3,880 = 4.40
2 Click competitor name to see calculations.
- Cost of Products Sold
- The cost of products sold exhibits a fluctuating pattern over the analyzed quarters. Initial values in early 2016 are around 4,192 million USD, with some periods showing decreases and others increases. Notably, costs peak in late 2017 and 2018, reaching values near 4,675 million USD. Following this peak, there is a slight decline in early 2019 but the costs again rise moderately towards late 2019 and early 2020, with values mostly ranging between approximately 4,100 million and 4,400 million USD. Overall, the trend suggests variability in production or procurement costs without a clear upward or downward long-term trend.
- Trade Payables
- Trade payables display a general upward trajectory from early 2016 through the end of 2017, moving from 2,773 million USD to about 4,449 million USD. This rise indicates increasing outstanding liabilities to suppliers or extended payment terms. From 2018 onward, the values stabilize and then slightly decline, fluctuating around the 4,100 to 4,300 million USD range before decreasing further to approximately 3,880 million USD by mid-2020. This suggests efforts to manage or reduce payable levels in recent periods after a peak intensification phase.
- Payables Turnover Ratio
- The payables turnover ratio shows a consistent decreasing trend from 5.46 in early 2016 to around 3.72 at the end of 2017, indicating a slower rate of paying off trade payables relative to purchases during this period. This downward trend then reverses starting in early 2018, with the ratio gradually improving to approximately 4.40 by mid-2020. The improvement signals a trend towards quicker payment to suppliers or more efficient management of payables in recent quarters compared to the previous periods.
- Overall Insights
- Cost controls, supplier payment policies, and working capital management reflect dynamic adjustments over the analyzed timeframe. While costs of products sold show fluctuations, trade payables and their turnover ratio highlight a period of increasing payables, followed by stabilization and improved turnover. This pattern may imply strategic efforts to balance liquidity and supplier relationships, with a focus on optimizing payment cycles more recently.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Current assets | 8,776) | 11,708) | 8,097) | 9,125) | 9,168) | 8,835) | 9,075) | 7,590) | 9,501) | 7,437) | 7,266) | 7,228) | 7,108) | 8,875) | 8,753) | 8,943) | 9,347) | 9,812) | ||||||
| Less: Current liabilities | 8,050) | 7,934) | 7,875) | 9,112) | 7,797) | 7,972) | 7,503) | 7,581) | 9,091) | 10,329) | 10,132) | 9,387) | 7,356) | 9,383) | 9,501) | 9,414) | 9,593) | 6,730) | ||||||
| Working capital | 726) | 3,774) | 222) | 13) | 1,371) | 863) | 1,572) | 9) | 410) | (2,892) | (2,866) | (2,159) | (248) | (508) | (748) | (471) | (246) | 3,082) | ||||||
| Net sales | 6,648) | 6,157) | 6,536) | 6,076) | 6,406) | 5,959) | 6,891) | 6,383) | 6,690) | 6,304) | 6,877) | 6,314) | 6,677) | 6,364) | 6,857) | 6,267) | 6,793) | 6,570) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Working capital turnover1 | 35.01 | 6.67 | 112.51 | 1,948.62 | 18.70 | 30.04 | 16.71 | 2,917.11 | 63.87 | — | — | — | — | — | — | — | — | 7.28 | ||||||
| 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).
1 Q2 2020 Calculation
Working capital turnover
= (Net salesQ2 2020
+ Net salesQ1 2020
+ Net salesQ4 2019
+ Net salesQ3 2019)
÷ Working capital
= (6,648 + 6,157 + 6,536 + 6,076)
÷ 726 = 35.01
2 Click competitor name to see calculations.
The financial data reveals several noteworthy trends in the company's operational and sales performance across the examined periods.
- Working Capital
- Working capital values demonstrate significant volatility from 2016 through mid-2020. In early 2016, working capital was positive at 3,082 million USD but shifted to negative territory in the subsequent quarters of that year and throughout much of 2017 and early 2018, reaching lows of nearly -2,866 million USD by the end of 2017. From mid-2018 onwards, there is a recovery trend, with working capital turning positive in some quarters, peaking at 3,774 million USD in the first quarter of 2020 before declining again.
- Net Sales
- Net sales figures fluctuate within a relatively narrow band between approximately 5,959 million USD and 6,891 million USD. While sales demonstrate general consistency quarter-to-quarter, slight declines and recoveries are observable, such as a dip in early 2019 followed by increases in subsequent quarters. Overall, net sales maintain a stable performance without pronounced upward or downward trends.
- Working Capital Turnover
- The working capital turnover ratio shows extraordinary variability and sporadic values, with some quarters indicating extremely high ratios, such as 2,917.11 and 1,948.62, pointing to potential anomalies or data inconsistencies. Where available, the ratio ranges widely, featuring both very high turnover implying efficient use of working capital, and more moderate levels around 6.67 to 35.01. This irregular pattern complicates straightforward interpretation but suggests fluctuating efficiency in managing working capital relative to sales.
In summary, the company’s working capital position exhibited marked instability, transitioning from positive to negative and back multiple times within the observed timeframe. Net sales remained relatively steady, indicating consistent market demand or revenue generation. The working capital turnover ratio’s volatility may reflect changing operational conditions, management effectiveness, or data reporting issues. These trends emphasize the need for deeper investigation into working capital management practices and underlying factors driving the significant swings observed.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Inventory turnover | 6.06 | 6.07 | 6.19 | 5.41 | 5.61 | 5.53 | 6.50 | 5.22 | 5.33 | 5.25 | 5.87 | 5.16 | 5.39 | 5.32 | 6.30 | 5.54 | 6.13 | 5.23 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average inventory processing period1 | 60 | 60 | 59 | 68 | 65 | 66 | 56 | 70 | 68 | 70 | 62 | 71 | 68 | 69 | 58 | 66 | 60 | 70 | ||||||
| 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).
1 Q2 2020 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 6.06 = 60
2 Click competitor name to see calculations.
- Inventory Turnover Ratio
- The inventory turnover ratio exhibits a fluctuating pattern over the observed period. Beginning at 5.23 in April 2016, it increased to a peak of 6.3 by December 2016. Subsequently, it declined and oscillated around the mid-5 mark through 2017 and 2018. Notably, there was a resurgence in the ratio towards the end of 2018, reaching 6.5 in December 2018, which represents the highest level in the dataset. After a slight decline in early 2019, the ratio generally trended upward again, maintaining values slightly above 6 in the first half of 2020. These trends indicate periods of both increased and decreased efficiency in inventory management, with a generally positive trajectory towards more frequent inventory turnovers in the later periods.
- Average Inventory Processing Period
- The average inventory processing period, expressed in number of days, moves inversely to the inventory turnover ratio as expected. Starting at 70 days in April 2016, the period shortened to a low of 56 days in December 2018, coinciding with the peak in inventory turnover ratio. Throughout the rest of the timeline, the processing period fluctuated between the mid-60s and 70 days, tending to decrease after late 2018. By mid-2020, the duration stabilized at around 60 days. This pattern suggests an improvement in inventory turnover efficiency culminating in late 2018, followed by a period of relative consistency and moderate processing times approaching the end of the series.
- Overall Insights
- The data demonstrates an overall improvement in inventory management efficiency during the period under review. Inventory turnover rates became higher while the average processing period decreased, particularly notable around the end of 2018. These fluctuations align with typical seasonal and operational adjustments but suggest effective inventory control practices were implemented or improved during late 2018 and continued through 2020. The stabilization of these measures in the last quarters indicates a potential establishment of optimized inventory processes within the company.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Receivables turnover | 12.43 | 10.85 | 12.66 | 12.93 | 12.51 | 12.90 | 12.34 | 12.92 | 13.43 | 25.07 | 28.48 | 27.94 | 28.66 | 29.66 | 34.44 | 31.29 | 23.88 | 23.89 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average receivable collection period1 | 29 | 34 | 29 | 28 | 29 | 28 | 30 | 28 | 27 | 15 | 13 | 13 | 13 | 12 | 11 | 12 | 15 | 15 | ||||||
| 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).
1 Q2 2020 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 12.43 = 29
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover exhibited a generally declining trend over the observed periods. Initially, it was relatively high, peaking at 34.44 in the quarter ending December 31, 2016. Following this peak, there was a consistent decrease, with values dropping below 15 starting from March 31, 2018, and fluctuating around 12 to 13 in subsequent quarters. The lowest recorded turnover was 10.85 in the quarter ending March 28, 2020, indicating a weakening in the efficiency of collecting receivables over time.
- Average Receivable Collection Period
- The average receivable collection period mirrored the inverse pattern of the turnover ratio, starting with a low of 11 days in December 2016. Over time, it increased steadily, reaching approximately 30 days by December 2018 and remaining in the high 20s to low 30s in subsequent quarters. The maximum period reached was 34 days in June 2020, highlighting an elongation in the days required to collect receivables.
- Overall Analysis
- The data reveals a notable deterioration in receivables management efficiency. The decreasing receivables turnover ratio alongside the increasing collection period suggests that the company is taking longer to collect payments from customers. This trend may imply either loosening credit policies, increased customer payment delays, or potential challenges in cash flow management. The extended collection period in recent periods represents a risk factor for liquidity and working capital efficiency.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Average inventory processing period | 60 | 60 | 59 | 68 | 65 | 66 | 56 | 70 | 68 | 70 | 62 | 71 | 68 | 69 | 58 | 66 | 60 | 70 | ||||||
| Average receivable collection period | 29 | 34 | 29 | 28 | 29 | 28 | 30 | 28 | 27 | 15 | 13 | 13 | 13 | 12 | 11 | 12 | 15 | 15 | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Operating cycle1 | 89 | 94 | 88 | 96 | 94 | 94 | 86 | 98 | 95 | 85 | 75 | 84 | 81 | 81 | 69 | 78 | 75 | 85 | ||||||
| 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).
1 Q2 2020 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 60 + 29 = 89
2 Click competitor name to see calculations.
The company's working capital management metrics exhibit distinct patterns over the reported periods. The average inventory processing period, measured in days, shows some fluctuations but generally remains within a range of approximately 56 to 71 days. This indicates a relatively stable inventory turnover, with occasional improvements such as the reduction to 56 days at the end of 2018 and some increases reaching up to 71 days during 2016 and 2017. These variations may reflect changing inventory management efficiency or shifts in product demand cycles.
The average receivable collection period demonstrates a noticeable upward trend over time. Initially stable at around 11 to 15 days in 2016 and early 2017, it begins to extend significantly from 2018 onwards, reaching peaks close to 30 days or more in several quarters. This increase suggests that customers are taking longer to pay their invoices, potentially impacting cash flow and indicating either more lenient credit terms or challenges in receivables management.
Combining the above two periods, the operating cycle—which sums the average inventory processing period and the average receivable collection period—also shows an increasing trend. Starting from a low in the high 60s to mid-70s days range, it rises steadily reaching the high 80s and mid-90s in later periods. The operating cycle's growth aligns closely with the extended receivables collection period, emphasizing a lengthening of the overall cash conversion cycle. This extension could imply increased capital tied up in working capital, potentially pressuring liquidity.
- Average inventory processing period
- Relatively stable with values mostly between 56 and 71 days; occasional short-term improvements and deteriorations observed.
- Average receivable collection period
- Marked upward trend from approximately 11–15 days early on to near 30 days in later quarters, indicating slower customer payments.
- Operating cycle
- Increasing from around 69 days to nearly 96 days over the observed timeframe, primarily driven by the lengthening receivables collection period, suggesting longer cash conversion times.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Payables turnover | 4.40 | 4.34 | 4.20 | 4.11 | 4.15 | 4.12 | 4.18 | 3.98 | 3.90 | 3.89 | 3.72 | 4.17 | 4.25 | 4.26 | 4.23 | 4.98 | 5.97 | 5.46 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average payables payment period1 | 83 | 84 | 87 | 89 | 88 | 89 | 87 | 92 | 94 | 94 | 98 | 88 | 86 | 86 | 86 | 73 | 61 | 67 | ||||||
| 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).
1 Q2 2020 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 4.40 = 83
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio exhibits a declining trend from early 2016 through the end of 2017, decreasing from 5.46 to a low of around 3.72. This indicates the company was taking longer to pay its suppliers over this period. In 2018 and 2019, the ratio shows a modest recovery, rising gradually to a level near 4.2 by the end of 2019. This suggests a slight improvement in the frequency of payments to suppliers. In 2020, the ratio continues to increase steadily, reaching 4.4, reflecting a further acceleration in payables turnover and potentially better management of payables.
- Average Payables Payment Period
- The average payables payment period, expressed in days, inversely mirrors the payables turnover ratio. From 2016 to 2017, the number of days to settle payables lengthened significantly, growing from 67 days to around 98 days. This confirms an elongation in the time the company took to pay its invoices during that timeframe. In 2018 and 2019, the payment period shortens gradually, declining from approximately 94 days to roughly 87-89 days, indicating a trend toward quicker payments. The first half of 2020 sees a continued reduction in the payment period, with days payable outstanding dropping to 83, signifying an ongoing effort to improve payment efficiency.
- Overall Observations
- The data reflects a shift in the company's payment practices over the analyzed quarters. Initially, the company extended its payables period significantly, possibly to optimize cash flow or respond to supplier negotiations. Subsequently, there is a gradual move toward reducing the payment period and increasing the turnover ratio, which may indicate improved liquidity management or changed credit terms with suppliers. The most recent periods reveal continued improvement in payables management efficiency.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Average inventory processing period | 60 | 60 | 59 | 68 | 65 | 66 | 56 | 70 | 68 | 70 | 62 | 71 | 68 | 69 | 58 | 66 | 60 | 70 | ||||||
| Average receivable collection period | 29 | 34 | 29 | 28 | 29 | 28 | 30 | 28 | 27 | 15 | 13 | 13 | 13 | 12 | 11 | 12 | 15 | 15 | ||||||
| Average payables payment period | 83 | 84 | 87 | 89 | 88 | 89 | 87 | 92 | 94 | 94 | 98 | 88 | 86 | 86 | 86 | 73 | 61 | 67 | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Cash conversion cycle1 | 6 | 10 | 1 | 7 | 6 | 5 | -1 | 6 | 1 | -9 | -23 | -4 | -5 | -5 | -17 | 5 | 14 | 18 | ||||||
| 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).
1 Q2 2020 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 60 + 29 – 83 = 6
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period exhibits fluctuations throughout the analyzed timeframe, generally oscillating between roughly 56 and 71 days. Initial values start around 70 days, decreasing to a low of 56 days near the end of 2018, before slightly rising again towards 60 days in mid-2020. No consistent upward or downward trend is apparent, indicating a relatively stable inventory turnover interval with minor variability across quarters.
- Average Receivable Collection Period
- The receivable collection period remains fairly steady at the outset, generally hovering between 11 and 15 days up to early 2018. A notable increase occurs during 2018 and 2019, with the period extending to around 27 to 30 days, indicating a lengthening in the time taken to collect receivables. This elevated level persists through 2019 and into 2020, with a peak at 34 days mid-2020, signaling potential delays or more relaxed credit terms granted to customers during this period.
- Average Payables Payment Period
- The payable payment period trends upward from approximately 67 days in early 2016 to a peak near 98 days by the end of 2017. Subsequently, it stabilizes around 87 to 94 days through 2018 and 2019, with a slight downward adjustment to low 80s days by mid-2020. This general increase followed by stabilization suggests an intentional extension of payment terms to suppliers over the years, possibly to manage cash outflows more effectively.
- Cash Conversion Cycle
- The cash conversion cycle displays significant variability, beginning at 18 days in early 2016 and declining to negative values during several quarters from late 2016 through 2017, reaching as low as -23 days. Negative values indicate that payables are being paid after cash is collected from customers, which improves liquidity. In 2018 and 2019, the cycle moves back to low positive single digits, fluctuating modestly between -1 and 7 days. The cycle rises slightly to around 10 days by mid-2020. Overall, the data suggests efforts to optimize working capital management, with some success in shortening the cycle or even achieving a negative cycle for enhanced cash flow.