Mondelēz International Inc. (NASDAQ:MDLZ)

Inventory turnover

The inventory turnover ratio exhibited moderate fluctuations over the assessed period. Beginning at 6.1 in 2020, it increased slightly to 6.45 in 2021, followed by a decline to 5.97 in 2022. It displayed a minor recovery to 6.16 in 2023 but declined again to 5.8 in 2024, indicating a somewhat inconsistent ability to convert inventory into sales.

Receivables turnover

The receivables turnover ratio showed a decreasing trend over the period. Starting at 11.57 in 2020, it rose to 12.29 in 2021 but then steadily declined each year thereafter, reaching 9.41 in 2024. This suggests a gradual decline in the efficiency of collecting receivables from customers.

Payables turnover

The payables turnover ratio remained relatively stable initially, at 2.6 for both 2020 and 2021. It then slightly increased to 2.67 for 2022 and 2023 before declining to 2.35 in 2024. This indicates a slightly slower rate of paying off suppliers toward the end of the period.

Working capital turnover

Data for working capital turnover were not available for the entire period, which limits the ability to assess the efficiency in using working capital to generate sales.

Average inventory processing period

The average number of days inventory was held showed fluctuations without a clear trend. Starting at 60 days in 2020, it decreased to 57 days in 2021, then increased to 61 days in 2022, slightly dropped to 59 days in 2023, and rose to 63 days in 2024, indicating some variability in inventory management over time.

Average receivable collection period

The average days to collect receivables increased consistently over the years, from 32 days in 2020 down to 30 days in 2021, then increased to 36, 37, and 39 days in 2022, 2023, and 2024 respectively. This lengthening period corresponds with the declining receivables turnover ratio, suggesting customers are taking longer to pay.

Operating cycle

The operating cycle, which combines inventory processing and receivables collection periods, showed a general upward trend, rising from 92 days in 2020 to 102 days in 2024. The increase reflects longer durations in converting raw materials to cash.

Average payables payment period

The average period to pay suppliers initially remained steady above 140 days from 2020 to 2021, then slightly decreased to 137 and 136 days in 2022 and 2023 before rising notably to 155 days in 2024. This suggests a growing extension in payment terms or a strategic delay in payments in the most recent year.

Cash conversion cycle

The cash conversion cycle remained negative throughout the period, indicating that the company consistently received cash from sales before it needed to pay its suppliers. After reaching a low of -54 days in 2021, it rose to -40 days in 2022 and 2023, then improved again to -53 days in 2024. This pattern suggests fluctuating but generally effective management of the timing differences between cash inflows and outflows.

The financial data reveals several key trends in cost of sales, inventories, and inventory turnover over the five-year period ending in 2024.

Cost of Sales

The cost of sales demonstrates a consistent upward trajectory from 2020 to 2023, increasing from $16,135 million to $22,252 million. This represents a substantial rise over the four years, suggesting growing operational scale or inflationary pressures. However, in 2024, the cost of sales experiences a slight decline, decreasing marginally to $22,184 million. This may indicate improved cost control, operational efficiencies, or a stabilization in input costs.

Inventories, Net

Net inventories show a continuous increase throughout the entire period, growing from $2,647 million in 2020 to $3,827 million in 2024. This steady rise could reflect increased production capacity, stockpiling for anticipated demand, or changes in supply chain strategies. The growth rate of inventories appears sustained without abrupt fluctuations, pointing towards a planned buildup rather than erratic buying patterns.

Inventory Turnover

The inventory turnover ratio fluctuates moderately between 5.8 and 6.45 during the five years. It starts at 6.1 in 2020, peaks at 6.45 in 2021, then declines to 5.97 in 2022, recovers somewhat to 6.16 in 2023, before falling again to 5.8 in 2024. This pattern indicates varying efficiency in inventory management. The slight decline in turnover in recent years could imply slower sales relative to inventory levels or longer holding periods for stock, potentially signaling less optimal inventory usage or changes in sales velocity.

Overall, the data suggests that the company has been expanding its cost base and inventory holdings through 2023, with inventory management efficiency experiencing minor volatility. The modest reduction in cost of sales and decline in turnover ratio in 2024 may warrant closer monitoring to assess impacts on profitability and capital utilization.

Net Revenues

Net revenues show a consistent upward trend over the five-year period, increasing from 26,581 million US dollars in 2020 to 36,441 million US dollars in 2024. This represents a notable growth in annual revenues, with the most significant year-over-year increase occurring between 2022 and 2023.

Trade Receivables, Net of Allowances

Trade receivables, net of allowances, also exhibit a rising trend, increasing steadily from 2,297 million US dollars in 2020 to 3,874 million US dollars in 2024. This growth suggests an expansion in credit sales or extended payment terms over the period.

Receivables Turnover Ratio

The receivables turnover ratio shows a declining trajectory, decreasing from 11.57 in 2020 to 9.41 in 2024. The reduction in this ratio indicates that the number of times trade receivables are collected during the year is diminishing, which may imply a lengthening of the collection period or slower cash conversion despite growing revenues.

Insights

The simultaneous increase in net revenues and trade receivables combined with a falling receivables turnover ratio highlights a trend towards slower collection efficiency or potentially more liberal credit terms extended to customers. While revenue growth is a positive indicator, the decreasing turnover ratio may warrant further analysis to assess cash flow impacts and credit risk management practices.

Cost of Sales

The cost of sales has shown a consistent upward trend from 2020 through 2023, increasing from $16,135 million to $22,252 million. However, in 2024, there is a slight decline to $22,184 million, indicating a potential stabilization or small reduction in cost levels after continuous growth.

Accounts Payable

Accounts payable has increased steadily each year, rising from $6,209 million in 2020 to $9,433 million in 2024. This growth suggests an increasing reliance on credit from suppliers or extended payment terms over the period analyzed.

Payables Turnover Ratio

The payables turnover ratio remained relatively stable at around 2.6 from 2020 to 2023, with a slight increase to 2.67 in 2022 and 2023. In 2024, the ratio declined to 2.35, which may indicate that the company is taking longer to pay its suppliers or has negotiated more favorable credit terms.

Working Capital

The working capital has shown significant fluctuations over the reported periods. Initially, it improved from -5180 million US dollars in 2020 to -3666 million US dollars in 2021, indicating a reduction in net current liabilities. However, this trend reversed in 2022, with working capital declining sharply to -6640 million US dollars, and further deteriorated in 2023 to -7310 million US dollars. By 2024, there was some recovery, with working capital improving to -6307 million US dollars, though it remained negative, implying persistent short-term liquidity challenges.

Net Revenues

Net revenues demonstrated a consistent upward trend throughout the period. From 26,581 million US dollars in 2020, revenues increased steadily each year, reaching 28,720 million in 2021, 31,496 million in 2022, 36,016 million in 2023, and 36,441 million in 2024. This robust growth reflects expanding sales and potentially successful market strategies or product demand.

Working Capital Turnover

The working capital turnover ratio data is not available for any of the periods, which limits the ability to analyze the efficiency of working capital utilization relative to the sales volume.

Inventory Turnover

The inventory turnover ratio exhibited slight fluctuations over the five-year period. It started at 6.1 in 2020, increased to 6.45 in 2021 indicating an improvement in inventory efficiency, then declined to 5.97 in 2022. A modest recovery to 6.16 occurred in 2023, followed by a drop to 5.8 in 2024. Overall, the trend suggests variability with a slight downward tendency in inventory turnover towards the end of the period.

Average Inventory Processing Period

The average inventory processing period, measured in days, inversely correlates with inventory turnover and reflects the duration inventory remains before being sold. It began at 60 days in 2020 and improved to 57 days in 2021, consistent with the higher turnover that year. However, subsequent years saw an increase to 61 days in 2022, a slight reduction to 59 days in 2023, and a rise to 63 days in 2024. This pattern indicates that the inventory holding period has generally lengthened, particularly toward the latter years, suggesting slower inventory movement or potential challenges in inventory management.

Overall Analysis

The data reveals a fluctuating but overall declining efficiency in inventory turnover with a corresponding moderate increase in the average number of days inventory is held. These trends may reflect changes in demand, supply chain dynamics, or inventory management strategies impacting the company's operational performance in managing its stock levels over the analyzed period.

Receivables Turnover

The receivables turnover ratio has experienced a consistent decline over the observed period. Starting at 11.57 in 2020, it increased slightly to 12.29 in 2021 but then decreased steadily to 10.2 in 2022, 9.91 in 2023, and further to 9.41 in 2024. This trend suggests a diminishing efficiency in collecting receivables over time.

Average Receivable Collection Period

The average collection period has shown an increasing trend. It began at 32 days in 2020, dropped slightly to 30 days in 2021, and then rose to 36 days in 2022, 37 days in 2023, and 39 days in 2024. This indicates that the company is taking progressively longer to collect its outstanding receivables.

Overall Analysis

The inverse relationship between receivables turnover and average collection period is evident and expected, as a lower turnover corresponds to a higher collection period. The data indicates a gradual deterioration in the management of accounts receivable, with slower collection times that may impact cash flow if the trend continues. This pattern might warrant a review of credit policies or collection practices to improve liquidity and operational efficiency.

Average Inventory Processing Period

The average inventory processing period fluctuated over the five-year span, starting at 60 days in 2020 and decreasing to 57 days in 2021. It then increased to 61 days in 2022, slightly decreased to 59 days in 2023, before rising again to 63 days in 2024. Overall, this indicates variability with a general upward trend towards the end of the period.

Average Receivable Collection Period

The average receivable collection period exhibited an increasing trend throughout the timeframe. It began at 32 days in 2020, decreased marginally to 30 days in 2021, and then steadily increased to 36 days in 2022, 37 days in 2023, and reached 39 days in 2024. This suggests a gradual lengthening in the time taken to collect receivables.

Operating Cycle

The operating cycle showed some variability but an overall increasing trend. It started at 92 days in 2020, dropped to 87 days in 2021, then rose to 97 days in 2022, slightly declined to 96 days in 2023, and finally increased to 102 days in 2024. The lengthening operating cycle may reflect the changes in inventory processing and receivable collection periods.

Payables Turnover

The payables turnover ratio remained relatively stable from 2020 through 2023, fluctuating slightly between 2.6 and 2.67. In 2024, however, there was a noticeable decline to 2.35, indicating a slower rate of payment to suppliers compared to previous years.

Average Payables Payment Period

The average payables payment period was fairly consistent between 2020 and 2023, hovering around 136 to 141 days. In 2024, there was a significant increase to 155 days, suggesting that the company took longer to settle its payables during that year.

Overall Trend and Insights

Over the analyzed period, payables turnover showed stability until 2024, when it declined, accompanied by a corresponding increase in the average payment period. This pattern suggests that the company extended its accounts payable timeline in 2024, potentially reflecting changes in cash management strategies, supplier negotiations, or operational circumstances that impacted payment practices.

Average Inventory Processing Period

The inventory processing period fluctuated over the years, starting at 60 days in 2020, decreasing slightly to 57 days in 2021, increasing again to 61 days in 2022, then decreasing to 59 days in 2023, and finally rising to 63 days in 2024. This indicates variability in inventory turnover efficiency, with a noticeable increase in the most recent year.

Average Receivable Collection Period

The receivable collection period shows a general upward trend. It decreased from 32 days in 2020 to 30 days in 2021, then increased progressively to 36 days in 2022, 37 days in 2023, and finally reached 39 days in 2024. This suggests a gradual lengthening in the time taken to collect receivables, potentially impacting cash inflows.

Average Payables Payment Period

The payables payment period remained relatively stable from 2020 to 2023, fluctuating slightly between 136 and 141 days. However, there was a significant increase in 2024, rising to 155 days. This indicates the company extended its payment terms or delayed payments during the latest period, which could affect supplier relationships or cash outflow management.

Cash Conversion Cycle

The cash conversion cycle values were negative throughout the period, indicating that payables are greater than the sum of receivables and inventory days, which is generally favorable for liquidity. The cycle decreased from -48 days in 2020 to -54 days in 2021, implying improved cash flow efficiency. It then increased to -40 days in both 2022 and 2023, indicating some deterioration. In 2024, the cycle improved again to -53 days. The fluctuations reflect dynamic management of working capital components over time.