Mondelēz International Inc. (NASDAQ:MDLZ)

The short-term operating activity ratios exhibit varied trends over the observed period. Inventory turnover generally remained within a relatively narrow range, with a slight downward trend from 2022 through mid-2023, followed by a recovery towards the end of 2023 and into 2025. Receivables turnover demonstrated more fluctuation, peaking in June 2022, then declining through early 2023, with subsequent periods showing moderate volatility. Payables turnover remained comparatively stable, fluctuating between 2.35 and 2.88, with a slight downward trend in the most recent periods.

Inventory Management

The average inventory processing period generally increased from 58 days in March 2022 to 65 days in June 2023, indicating a lengthening of the time required to convert inventory into sales. This trend reversed in late 2023 and continued into 2025, returning to 58 days, suggesting improved inventory management efficiency. The fluctuations may be attributable to seasonal demand or changes in supply chain dynamics.

Receivables Management

The average receivable collection period decreased from 37 days in March 2022 to 30 days in June 2022, then increased to 39 days by March 2023. It remained relatively stable between 31 and 43 days through the remainder of the period, with a slight decrease to 37 days in December 2025. This suggests some variability in the company’s ability to collect on its credit sales, but overall remains within a manageable range.

Payables Management

The average payables payment period consistently remained high, ranging from 127 to 155 days. A slight increasing trend is observed throughout the period, culminating in 155 days in December 2024, before decreasing to 134 days in December 2025. This indicates the company utilizes extended payment terms with its suppliers.

Overall Operating Cycle & Cash Conversion

The operating cycle generally remained above 90 days, peaking at 113 days in September 2025. The cash conversion cycle consistently remained negative, ranging from -53 to -28 days. This indicates the company effectively manages its working capital, converting its investments in inventory and receivables into cash before needing to pay its suppliers. The negative cash conversion cycle suggests strong liquidity management. A slight worsening in the cash conversion cycle is observed in the later periods, moving towards less negative values.

In summary, the company demonstrates generally efficient working capital management, as evidenced by the consistently negative cash conversion cycle. However, fluctuations in inventory and receivables turnover, alongside the increasing payables payment period, warrant continued monitoring to ensure sustained operational efficiency.

Inventory turnover exhibited a generally stable pattern over the observed period, with some fluctuations. Initial values indicated a moderate level of inventory management efficiency, which subsequently experienced a slight decline before recovering and then showing signs of potential improvement towards the end of the period.

Overall Trend

From March 31, 2022, through December 31, 2023, the inventory turnover ratio remained relatively consistent, fluctuating between approximately 5.18 and 6.33. A slight downward trend was apparent during this timeframe. However, beginning in March 2024, the ratio began to show signs of recovery, culminating in a value of 6.25 by December 31, 2025, suggesting a potential improvement in inventory management efficiency.

Short-Term Fluctuations

A minor decrease in inventory turnover was observed from the first quarter of 2022 (6.33) to the third quarter of 2022 (5.71). This was followed by a modest recovery in the fourth quarter of 2022 (5.97). The first half of 2023 continued this pattern of slight fluctuation, with values around 5.66 to 5.82. A more noticeable decline occurred in the first half of 2024, reaching a low of 5.18 in June 2024. The subsequent quarters of 2024 and the first three quarters of 2025 demonstrated a recovery, with the ratio increasing to 6.25 in December 2025.

Relationship to Cost of Sales and Inventory Levels

The fluctuations in inventory turnover appear to correlate with both cost of sales and inventory levels. Periods of increased cost of sales, such as the progression from March 2022 to December 2022, generally coincided with relatively stable or slightly decreasing inventory turnover. Conversely, increases in inventory levels, as seen from March 2022 to September 2022, were associated with a decrease in the turnover ratio. The recent increase in the ratio towards the end of the period aligns with a stabilization and then decrease in inventory levels, coupled with increasing cost of sales.

Recent Performance

The most recent data points indicate a positive trend. The increase from 5.06 in March 2025 to 6.25 in December 2025 suggests improved efficiency in converting inventory into sales. This improvement could be attributable to various factors, including enhanced demand forecasting, optimized supply chain management, or successful promotional activities.

The receivables turnover ratio exhibits fluctuations over the observed period, spanning from March 31, 2022, to December 31, 2025. An initial period of variability is followed by a more recent stabilization, though with continued minor oscillations. Overall, the ratio suggests a generally efficient collection of receivables, but with some quarters demonstrating stronger performance than others.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

The receivables turnover ratio began at 9.94 in March 2022, increased to a peak of 12.11 in June 2022, then decreased to 10.20 by December 2022. This initial period demonstrates a relatively high level of variability, potentially influenced by seasonal sales patterns or changes in credit terms. The increase in June 2022 suggests a faster collection period, while the subsequent decline indicates a lengthening of the collection cycle.

Subsequent Fluctuations (Mar 31, 2023 – Dec 31, 2024)

From March 2023 through December 2024, the ratio continued to fluctuate. A high of 11.63 was observed in June 2023, followed by a decline to 9.04 in March 2024. The ratio remained relatively stable between 9.41 and 9.51 in the subsequent two quarters. This period suggests a continued, though less pronounced, variability in the speed of receivables collection.

Recent Trend (Mar 31, 2025 – Dec 31, 2025)

The most recent data indicates a ratio of 8.44 in March 2025, increasing to 10.52 in June 2025, then decreasing to 8.99 in September 2025, and finally reaching 9.87 in December 2025. This suggests a recent period of increased volatility, with a notable dip in March 2025 followed by a recovery. The December 2025 value is closer to the average observed throughout the period.

Overall Assessment

The receivables turnover ratio generally remains above 9.0, indicating that, on average, the company collects its receivables approximately nine to twelve times per year. While fluctuations are present, there is no consistent upward or downward trend over the entire period. The recent volatility warrants further investigation to determine the underlying causes and potential impact on cash flow.

The accounts payable turnover ratio for the analyzed period demonstrates a generally stable pattern with some fluctuation. Initial values indicate a slight increase followed by a period of relative consistency, then a gradual decline, and a recent modest recovery.

Overall Trend

The payables turnover ratio began at 2.48 and peaked at 2.88 before declining to a low of 2.35. The most recent quarter shows a slight increase to 2.72, suggesting a potential stabilization or reversal of the downward trend. The ratio generally fluctuates between 2.4 and 2.9 over the observed timeframe.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

From March 31, 2022, to December 31, 2022, the ratio experienced an initial increase from 2.48 to 2.74, followed by a slight decrease to 2.67. This suggests a period of efficient management of accounts payable, followed by a minor slowdown in the rate at which payables are being turned into cost of sales.

Decline (Mar 31, 2023 – Dec 31, 2024)

A consistent downward trend is observed from March 31, 2023, through December 31, 2024, with the ratio decreasing from 2.68 to 2.35. This indicates a lengthening of the time it takes to pay suppliers, potentially due to changes in supplier terms, inventory management, or cash flow strategies. The decline is gradual but persistent.

Recent Performance (Mar 31, 2025 – Dec 31, 2025)

The ratio shows a modest recovery in the most recent two quarters, increasing from 2.47 to 2.72. This could be attributed to improved payment practices, increased cost of sales, or a deliberate effort to reduce the payable period. However, further observation is needed to confirm a sustained upward trend.

Relationship to Cost of Sales and Accounts Payable

The payables turnover ratio is calculated from cost of sales and accounts payable. Fluctuations in both of these items contribute to the observed ratio changes. While cost of sales generally increased over the period, accounts payable also increased, but at a rate that, at times, resulted in a lower turnover ratio. The recent increase in the ratio coincides with a period where cost of sales increased at a faster rate than accounts payable.

In conclusion, the payables turnover ratio exhibits a generally stable pattern with a recent indication of potential improvement. The observed fluctuations warrant continued monitoring to assess the underlying causes and their impact on the company’s financial health.

The working capital turnover ratio for the analyzed period demonstrates a fluctuating pattern, with no clear, consistent trend. The ratio is calculated by dividing net revenues by working capital. However, the consistently negative working capital values necessitate careful interpretation, as the standard formula's application in this context yields negative ratios, which are less intuitively meaningful.

Working Capital

Working capital consistently remains negative throughout the observed period, ranging from approximately -4,368 million to -8,913 million. An increasing negative trend is apparent from March 2022 through December 2025, indicating a widening gap between current liabilities and current assets. This suggests the entity consistently finances its operations with more short-term liabilities than short-term assets.

Net Revenues

Net revenues exhibit seasonal fluctuations, generally peaking in the fourth quarter of each year. Overall, net revenues demonstrate an upward trend, increasing from approximately 7,274 million in June 2022 to 10,496 million in December 2025. However, there are quarterly declines, such as the decrease from March 2024 to June 2024 (9,290 million to 8,343 million).

Working Capital Turnover

Due to the negative working capital, the calculated working capital turnover ratios are all negative. The magnitude of these negative ratios fluctuates, generally becoming more negative as working capital becomes more negative. The ratios move from being relatively less negative in the earlier periods to more negative in the later periods, reflecting the increasing negative working capital balance alongside revenue growth. While a positive working capital turnover generally indicates efficient use of working capital, interpreting a negative ratio requires considering the specific context of consistently negative working capital. In this case, the negative turnover suggests that a larger proportion of revenue is generated relative to the negative working capital position, but it doesn't align with the traditional interpretation of the ratio.

The increasing negative working capital, coupled with growing net revenues, suggests the entity is becoming increasingly reliant on short-term financing to support its operations. Further investigation into the composition of current assets and current liabilities is recommended to understand the drivers behind this trend and assess its sustainability.

The average inventory processing period exhibited fluctuations over the observed timeframe. Initially, the period remained relatively stable, followed by a period of increase, and then a return towards initial levels. A detailed examination of the trends is presented below.

Overall Trend

From March 31, 2022, to December 31, 2022, the average inventory processing period increased from 58 days to 61 days, indicating a slightly slower inventory turnover. A subsequent increase was observed through June 30, 2023, reaching 65 days. The period then decreased to 59 days by December 31, 2023, before rising again to 70 days by June 30, 2024. A decline to 58 days was then recorded by December 31, 2025.

Peak and Trough Values

The highest average inventory processing period was 72 days, occurring in both June 30, 2025, and September 30, 2025. The lowest value was 58 days, observed at the beginning and end of the analyzed period (March 31, 2022, and December 31, 2025).

Recent Performance

The most recent quarters show a notable decrease in the average inventory processing period. After peaking at 72 days in the second and third quarters of 2025, the period decreased to 58 days by December 31, 2025. This suggests improved inventory management or increased sales in the latter part of 2025.

Correlation with Inventory Turnover

The average inventory processing period demonstrates an inverse relationship with the inventory turnover ratio. As the inventory turnover ratio decreases, the average inventory processing period tends to increase, and vice versa. For example, the period increased from 61 to 65 days between December 2022 and June 2023, coinciding with a decrease in inventory turnover from 6.16 to 5.66. The recent improvement in the processing period aligns with the increase in inventory turnover to 6.25 by December 2025.

The average receivable collection period exhibited fluctuations over the observed timeframe, spanning from March 31, 2022, to December 31, 2025. An initial decreasing trend was followed by periods of increase and relative stability, ultimately concluding with a period resembling the initial values.

Overall Trend

The collection period generally ranged between 30 and 43 days. The period began at 37 days in March 2022, decreased to a low of 30 days in June 2022, and then increased to 39 days by March 2023. Subsequent quarters showed continued variability, peaking at 43 days in March 2025 before decreasing to 37 days in December 2025.

Short-Term Fluctuations (2022-2023)

From March 2022 through December 2022, the collection period demonstrated a wave-like pattern. It initially decreased, then increased slightly, and remained relatively stable around 36-37 days. The first half of 2023 showed a return to the lower end of the range, with a collection period of 31 days in June 2023, before increasing again.

Mid-Term Stability and Recent Changes (2023-2025)

The period from September 2023 to March 2025 showed a generally increasing trend, culminating in the highest observed value of 43 days. The final quarter of 2025 saw a decrease back to 37 days, suggesting a potential reversal of the recent upward trend. This recent decrease could indicate improved collection efficiency or a change in sales terms.

Seasonal Patterns

While not consistently present, a tendency for the collection period to be higher in the first quarter of the year (March) was observed in 2023, 2024, and 2025. This could be linked to seasonal sales patterns or payment terms. Further investigation would be needed to confirm this potential seasonality.

The observed fluctuations in the average receivable collection period warrant continued monitoring to assess their impact on cash flow and working capital management. The recent decrease in the final quarter of the observed period is a positive sign, but sustained observation is necessary to determine if this represents a lasting shift.

The operating cycle of the company exhibits fluctuations over the observed period, spanning from March 31, 2022, to December 31, 2025. Analysis reveals trends in both the components of the operating cycle – average inventory processing period and average receivable collection period – and the resulting combined cycle length.

Average Inventory Processing Period

The average inventory processing period generally increased from 58 days in March 2022 to 65 days in June 2023. A slight decrease to 59 days was noted in December 2022, followed by a return to increasing values. Further increases were observed through June 2025, peaking at 72 days, before decreasing to 58 days by December 2025. This suggests potential inefficiencies in inventory management during certain periods, followed by improvements towards the end of the analyzed timeframe.

Average Receivable Collection Period

The average receivable collection period demonstrated more variability. It decreased from 37 days in March 2022 to 30 days in June 2022, then generally increased to 43 days by March 2025. A subsequent decrease to 37 days was observed in December 2025. These fluctuations may indicate changes in credit policies, customer payment behavior, or the composition of sales.

Operating Cycle

The operating cycle followed a generally upward trend from 95 days in March 2022, peaking at 113 days in September 2025. Prior to this peak, the cycle length fluctuated, with a low of 90 days in June 2022. The cycle decreased to 95 days in December 2025. The increases in both inventory processing and receivable collection periods contributed to the overall lengthening of the operating cycle, particularly in the latter half of the period. The decrease in December 2025 suggests potential improvements in either inventory management or collection efficiency, or a combination of both.

Overall, the company experienced an extended operating cycle during the analyzed period, with a notable increase in both the time to process inventory and collect receivables. The final quarter shows a potential reversal of this trend, indicating possible operational improvements. Continued monitoring of these ratios is recommended to assess the sustainability of these improvements and identify any emerging issues.

The average payables payment period exhibited fluctuations over the observed period, spanning from March 31, 2022, to December 31, 2025. An initial decreasing trend is followed by periods of relative stability and subsequent increases, culminating in a final decrease.

Overall Trend

The average payables payment period generally increased over the analyzed timeframe. Starting at 147 days in March 2022, it decreased to a low of 127 days by September 2022, before increasing to 155 days by December 2024. The period concluded with a decrease to 134 days in December 2025.

Short-Term Fluctuations (2022-2023)

From March 2022 to June 2022, the average payables payment period decreased from 147 days to 133 days. This decline continued into September 2022, reaching 127 days. A slight increase to 137 days was observed in December 2022. The first half of 2023 showed a continued decrease, reaching 131 days in June 2023, before stabilizing at 127 days in September 2023 and increasing slightly to 136 days in December 2023.

Increasing Trend (2024)

2024 witnessed a consistent increase in the average payables payment period. It rose from 142 days in March 2024 to 149 days in June 2024, 150 days in September 2024, and peaked at 155 days in December 2024. This represents the highest value recorded during the analyzed period.

Recent Developments (2025)

The final period analyzed, 2025, showed a reversal of the 2024 trend. The average payables payment period decreased from 148 days in March 2025 to 141 days in September 2025, and concluded at 134 days in December 2025. This suggests a potential shift in payment practices or supplier negotiations towards the end of the period.

The fluctuations in the average payables payment period may be attributable to various factors, including changes in supplier terms, the timing of invoice processing, and overall cash management strategies. Further investigation would be required to determine the specific drivers behind these observed trends.

The short-term operating activity of the company, as measured by its cash conversion cycle and component ratios, exhibits notable fluctuations over the observed period. Generally, the company maintains a negative cash conversion cycle, indicating efficient management of working capital. However, variations within each component ratio contribute to shifts in the overall cycle length.

Average Inventory Processing Period

The average time to process inventory generally increased from 58 days in March 2022 to 65 days in June 2022, before decreasing to 59 days by December 2022. A subsequent rise to 68 days occurred in June 2024, peaking at 72 days in September 2024, before decreasing to 58 days in December 2025. This suggests potential inconsistencies in inventory management efficiency, possibly influenced by seasonal demand or supply chain dynamics.

Average Receivable Collection Period

The average number of days to collect receivables demonstrated variability. It decreased from 37 days in March 2022 to 30 days in June 2022, then generally increased to 43 days by March 2025, before decreasing to 37 days in December 2025. This indicates fluctuations in the company’s ability to promptly convert sales into cash, potentially linked to changes in credit policies or customer payment behavior.

Average Payables Payment Period

The average time taken to settle payables consistently remained high, ranging between 127 and 155 days throughout the period. A general increasing trend is observed, peaking at 155 days in December 2024, before decreasing to 134 days in December 2025. This suggests the company effectively utilizes supplier credit to finance its operations.

Cash Conversion Cycle

The cash conversion cycle remained negative throughout the period, ranging from -53 to -28 days. The cycle length fluctuated, with a notable decrease from -52 days in March 2022 to -43 days in June 2022, followed by a period of relative stability. A decrease to -28 days was observed in September 2025, before increasing to -39 days in December 2025. These fluctuations are a result of the combined effects of changes in the inventory processing, receivable collection, and payable payment periods. The consistently negative cycle indicates that, on average, the company receives cash from customers before it needs to pay its suppliers.

Overall, the company demonstrates a generally efficient cash conversion cycle, benefiting from extended payment terms with suppliers. However, the observed fluctuations in inventory processing and receivable collection periods warrant continued monitoring to identify potential areas for improvement in working capital management.