Analysis of Short-term (Operating) Activity Ratios
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)
Kellanova, short-term (operating) activity ratios
Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).
- Inventory Turnover
- The inventory turnover ratio exhibited a declining trend from 7.5 in 2019 to a low of 6.05 in 2022, indicating a slower rate of inventory movement over those years. However, there was a recovery in 2023 where the ratio increased to 7.11, suggesting an improvement in inventory management or sales efficiency towards the end of the period.
- Receivables Turnover
- The receivables turnover ratio showed some fluctuation but remained relatively stable overall. It increased from 8.62 in 2019 to a peak of 9.52 in 2021, implying faster collection of receivables during that time. Subsequently, the ratio decreased to 8.37 by 2023, indicating a slight slowdown in collections compared to the peak year.
- Payables Turnover
- The payables turnover ratio remained fairly consistent throughout the period, with minor fluctuations between 3.6 and 3.85. This stability suggests relatively uniform payment practices toward suppliers over the years examined.
- Average Inventory Processing Period
- The average inventory processing period, measured in days, increased from 49 days in 2019 to 60 days in 2022, reflecting longer holding periods and potentially lower inventory turnover efficiency. In 2023, this period decreased to 51 days, pointing to improved inventory management or faster sales cycles in the latest year.
- Average Receivable Collection Period
- This metric fluctuated moderately, with a low of 38 days in 2021 indicating relatively quick collection of receivables, compared to 42 days in 2019. A gradual increase occurred thereafter, rising to 44 days in 2023, which signals a slight lengthening in the time taken to collect receivables.
- Operating Cycle
- The operating cycle duration generally hovered around the low 90s in days, with a slight upward peak to 101 days in 2022 followed by a decrease to 95 days in 2023. This pattern reflects variations in the overall efficiency of converting inventory and receivables into cash across the years.
- Average Payables Payment Period
- The average payables payment period increased from 95 days in 2019 to 101 days in 2022, indicating a lengthening in the time the company took to pay its suppliers. It reverted back to 96 days in 2023, closer to earlier levels and suggesting a return to previous payment timing practices.
- Cash Conversion Cycle
- The cash conversion cycle remained consistently negative or near zero, indicating that the company generally received cash from operations before needing to pay its suppliers. It was -4 days in 2019, improved to -7 days in 2020 and 2021, with missing data in 2022, and stood at -1 day in 2023. This negative cycle is indicative of a favorable liquidity position and efficient management of working capital.
- Working Capital Turnover
- The absence of data for working capital turnover prevents an analysis of this metric over the stated period.
Turnover Ratios
Average No. Days
Inventory Turnover
Kellanova, inventory turnover calculation, comparison to benchmarks
| Dec 30, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of goods sold | 8,839) | 10,700) | 9,621) | 9,043) | 9,197) | |
| Inventories | 1,243) | 1,768) | 1,398) | 1,284) | 1,226) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 7.11 | 6.05 | 6.88 | 7.04 | 7.50 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Coca-Cola Co. | 4.19 | 4.25 | 4.50 | 4.11 | — | |
| Mondelēz International Inc. | 6.16 | 5.97 | 6.45 | 6.10 | — | |
| PepsiCo Inc. | 7.85 | 7.77 | 8.53 | 7.62 | — | |
| Philip Morris International Inc. | 1.20 | 1.15 | 1.15 | 1.00 | — | |
| Inventory Turnover, Sector | ||||||
| Food, Beverage & Tobacco | 3.96 | 3.97 | 4.17 | 3.61 | — | |
| Inventory Turnover, Industry | ||||||
| Consumer Staples | 7.60 | 7.08 | 8.15 | 7.71 | — | |
Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).
1 2023 Calculation
Inventory turnover = Cost of goods sold ÷ Inventories
= 8,839 ÷ 1,243 = 7.11
2 Click competitor name to see calculations.
The analyzed financial data reveals several trends related to the cost of goods sold, inventories, and inventory turnover over the five-year period.
- Cost of Goods Sold (COGS)
- The cost of goods sold exhibited fluctuations throughout the period. Starting at 9,197 million USD in 2019, it slightly decreased to 9,043 million USD in 2020. It then increased to 9,621 million USD in 2021 and peaked at 10,700 million USD in 2022, reflecting higher production or sales activity. However, in 2023, the cost declined significantly to 8,839 million USD, suggesting either improved cost management or reduced sales volume.
- Inventories
- Inventories showed an increasing trend from 1,226 million USD in 2019 to a high of 1,768 million USD in 2022. This steady increase suggests a buildup of stock, possibly in anticipation of higher demand or due to slower turnover. In 2023, inventories decreased to 1,243 million USD, indicating efforts to optimize stock levels or lower inflows.
- Inventory Turnover Ratio
- The inventory turnover ratio declined from 7.5 in 2019 to a low of 6.05 in 2022. This decline corroborates the buildup of inventories and potentially slower sales or longer holding periods. In 2023, the ratio improved to 7.11, signaling enhanced inventory management efficiency or increased sales volume.
In summary, the data reflect a period of rising production costs and inventory accumulation up to 2022, followed by a rebalancing in 2023 with reduced costs and inventories alongside improved inventory turnover. This suggests a shift towards more efficient inventory and cost management in the most recent year.
Receivables Turnover
Kellanova, receivables turnover calculation, comparison to benchmarks
| Dec 30, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 13,122) | 15,315) | 14,181) | 13,770) | 13,578) | |
| Accounts receivable, net | 1,568) | 1,736) | 1,489) | 1,537) | 1,576) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 8.37 | 8.82 | 9.52 | 8.96 | 8.62 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Coca-Cola Co. | 13.42 | 12.33 | 11.01 | 10.50 | — | |
| Mondelēz International Inc. | 9.91 | 10.20 | 12.29 | 11.57 | — | |
| PepsiCo Inc. | 8.46 | 8.50 | 9.16 | 8.37 | — | |
| Philip Morris International Inc. | 10.16 | 8.25 | 10.06 | 9.88 | — | |
| Receivables Turnover, Sector | ||||||
| Food, Beverage & Tobacco | 9.78 | 9.36 | 10.10 | 9.47 | — | |
| Receivables Turnover, Industry | ||||||
| Consumer Staples | 32.56 | 31.53 | 34.96 | 33.86 | — | |
Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).
1 2023 Calculation
Receivables turnover = Net sales ÷ Accounts receivable, net
= 13,122 ÷ 1,568 = 8.37
2 Click competitor name to see calculations.
The financial data reveals several important trends in sales and receivables performance over the five-year period under review.
- Net Sales
- Net sales initially grew from approximately 13,578 million USD in 2019 to a peak of 15,315 million USD in 2022, showing a consistent upward trajectory over four years. However, sales declined in 2023 to 13,122 million USD, representing a notable drop relative to the previous year and falling below the 2021 figure. This indicates a recent contraction in revenue after a period of growth.
- Accounts Receivable, Net
- The net accounts receivable values follow a somewhat fluctuating pattern with an initial decline from 1,576 million USD in 2019 to 1,489 million USD in 2021. This was followed by an increase to 1,736 million USD in 2022 and a subsequent decline to 1,568 million USD in 2023. These fluctuations suggest varying collection efficiency or changes in credit policy or customer payment behavior during the timeframe.
- Receivables Turnover Ratio
- The receivables turnover ratio improved steadily from 8.62 in 2019 to 9.52 in 2021, indicating faster collection of receivables in this period. However, the ratio declined thereafter to 8.82 in 2022 and further to 8.37 in 2023, pointing to a slower collection process in the most recent years. This slowing turnover coincides with the growth and subsequent decline in net sales and suggests potential challenges in collections or shifts in credit terms.
Overall, the data highlights a growth phase in sales and improving receivables management through 2021, followed by a period marked by declining sales and reduced efficiency in receivables collections in 2022 and 2023. Management attention may be warranted to address the recent downturn in sales and to investigate the causes behind the slower turnover of receivables to improve cash flow performance.
Payables Turnover
Kellanova, payables turnover calculation, comparison to benchmarks
| Dec 30, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of goods sold | 8,839) | 10,700) | 9,621) | 9,043) | 9,197) | |
| Accounts payable | 2,314) | 2,973) | 2,573) | 2,471) | 2,387) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 3.82 | 3.60 | 3.74 | 3.66 | 3.85 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Coca-Cola Co. | 3.31 | 3.39 | 3.34 | 3.82 | — | |
| Mondelēz International Inc. | 2.67 | 2.67 | 2.60 | 2.60 | — | |
| PepsiCo Inc. | 3.60 | 3.78 | 3.77 | 3.59 | — | |
| Philip Morris International Inc. | 3.11 | 2.80 | 3.01 | 3.44 | — | |
| Payables Turnover, Sector | ||||||
| Food, Beverage & Tobacco | 3.22 | 3.26 | 3.26 | 3.32 | — | |
| Payables Turnover, Industry | ||||||
| Consumer Staples | 6.95 | 6.37 | 6.65 | 6.70 | — | |
Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).
1 2023 Calculation
Payables turnover = Cost of goods sold ÷ Accounts payable
= 8,839 ÷ 2,314 = 3.82
2 Click competitor name to see calculations.
- Cost of Goods Sold
- The cost of goods sold showed some fluctuations over the analyzed periods. It decreased slightly from $9,197 million in 2019 to $9,043 million in 2020. However, it increased in the following years, reaching a peak of $10,700 million in 2022, before declining sharply to $8,839 million in 2023. This pattern indicates variability in production costs or changes in sales volume, with a notable reduction in the most recent year.
- Accounts Payable
- Accounts payable demonstrated a gradual increase from $2,387 million in 2019 to $2,973 million in 2022. In 2023, there was a decline to $2,314 million. This trend suggests growing short-term liabilities followed by a decrease, potentially reflecting changes in supplier payment practices or cash management strategies.
- Payables Turnover Ratio
- The payables turnover ratio exhibited slight variability but remained relatively stable over the period. Starting at 3.85 in 2019, it decreased to 3.66 in 2020, then experienced minor fluctuations, reaching 3.6 in 2022 before increasing again to 3.82 in 2023. This stability suggests consistent efficiency in managing payables relative to purchases, with minor adjustments year over year.
Working Capital Turnover
Kellanova, working capital turnover calculation, comparison to benchmarks
| Dec 30, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 3,330) | 4,186) | 3,394) | 3,482) | 3,431) | |
| Less: Current liabilities | 5,060) | 6,349) | 5,315) | 5,238) | 4,778) | |
| Working capital | (1,730) | (2,163) | (1,921) | (1,756) | (1,347) | |
| Net sales | 13,122) | 15,315) | 14,181) | 13,770) | 13,578) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | — | — | — | — | — | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Coca-Cola Co. | 14.47 | 15.00 | 14.90 | 7.12 | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | 15.29 | — | |
| Working Capital Turnover, Sector | ||||||
| Food, Beverage & Tobacco | — | — | — | 164.42 | — | |
| Working Capital Turnover, Industry | ||||||
| Consumer Staples | — | — | — | — | — | |
Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).
1 2023 Calculation
Working capital turnover = Net sales ÷ Working capital
= 13,122 ÷ -1,730 = —
2 Click competitor name to see calculations.
The financial data over the assessed periods reveal distinct trends in working capital, net sales, and implied working capital turnover.
- Working Capital
- The working capital shows a consistently negative value throughout all years, indicating that current liabilities exceed current assets during the period. Starting at -1,347 million USD in 2019, the negative working capital worsened to -2,163 million USD by 2022, indicating an increasing imbalance. However, in 2023 there is a notable improvement with the negative value decreasing to -1,730 million USD. This suggests that while the company operated with a strained short-term liquidity position over the years, some recovery or management of working capital occurred in the most recent year.
- Net Sales
- Net sales present a generally upward trend from 2019 to 2022, increasing from 13,578 million USD to a peak of 15,315 million USD in 2022. This implies expanding revenue generation. Yet, in 2023, net sales declined significantly to 13,122 million USD, falling below the level observed in 2020 and 2021. The growth trend turned downward in the last year, which might indicate market challenges, demand issues, or other operational factors affecting revenues.
- Working Capital Turnover
- Data for explicit working capital turnover ratios are missing. However, the ratio of net sales to working capital (considering the negative values) suggests a complex relationship. Given the persistent negative working capital, traditional interpretation of turnover ratios is challenging. The gradual increase in negative working capital alongside rising sales until 2022 might indicate that sales growth was financed by increasing current liabilities or decreasing current assets. The improvement in working capital in 2023, combined with sales decline, suggests a shift in operational or financial management strategies possibly aimed at improving liquidity or reducing short-term obligations.
Average Inventory Processing Period
Kellanova, average inventory processing period calculation, comparison to benchmarks
| Dec 30, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 7.11 | 6.05 | 6.88 | 7.04 | 7.50 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 51 | 60 | 53 | 52 | 49 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Coca-Cola Co. | 87 | 86 | 81 | 89 | — | |
| Mondelēz International Inc. | 59 | 61 | 57 | 60 | — | |
| PepsiCo Inc. | 46 | 47 | 43 | 48 | — | |
| Philip Morris International Inc. | 305 | 316 | 317 | 366 | — | |
| Average Inventory Processing Period, Sector | ||||||
| Food, Beverage & Tobacco | 92 | 92 | 88 | 101 | — | |
| Average Inventory Processing Period, Industry | ||||||
| Consumer Staples | 48 | 52 | 45 | 47 | — | |
Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).
1 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 7.11 = 51
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio exhibited a fluctuating trend over the analyzed period. Initially, there was a decline from 7.5 in December 2019 to 7.04 in December 2020, followed by a further decrease to 6.88 in December 2021. The ratio reached its lowest point of 6.05 in December 2022, indicating a slower rate of inventory turnover during that year. However, by December 2023, the turnover ratio improved to 7.11, suggesting a recovery and a more efficient inventory management compared to the preceding years.
- Average Inventory Processing Period
- The average inventory processing period showed an increasing trend from 49 days in December 2019 to a peak of 60 days in December 2022. This indicates that the company took longer to process inventory throughout this period, which aligns with the decreasing inventory turnover ratio observed. By December 2023, the processing period decreased significantly to 51 days, reflecting an improvement in inventory handling speed and efficiency.
- Overall Analysis
- The data suggests that between 2019 and 2022, the company experienced a gradual slowdown in inventory turnover accompanied by an increase in the inventory processing period, potentially indicating challenges in inventory management or changes in sales dynamics. The improvement observed in 2023, with an increased turnover ratio and a reduced processing period, points towards enhanced operational efficiency and potentially better alignment between inventory levels and sales performance during the most recent year.
Average Receivable Collection Period
Kellanova, average receivable collection period calculation, comparison to benchmarks
| Dec 30, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 8.37 | 8.82 | 9.52 | 8.96 | 8.62 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 44 | 41 | 38 | 41 | 42 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Coca-Cola Co. | 27 | 30 | 33 | 35 | — | |
| Mondelēz International Inc. | 37 | 36 | 30 | 32 | — | |
| PepsiCo Inc. | 43 | 43 | 40 | 44 | — | |
| Philip Morris International Inc. | 36 | 44 | 36 | 37 | — | |
| Average Receivable Collection Period, Sector | ||||||
| Food, Beverage & Tobacco | 37 | 39 | 36 | 39 | — | |
| Average Receivable Collection Period, Industry | ||||||
| Consumer Staples | 11 | 12 | 10 | 11 | — | |
Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).
1 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 8.37 = 44
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibited a general upward trend from 8.62 in 2019, reaching a peak of 9.52 in 2021. This indicates an improvement in the efficiency with which the company collected its receivables during that period. However, after 2021, the ratio declined steadily to 8.37 by the end of 2023, suggesting a reduction in collection efficiency or an increase in outstanding receivables relative to credit sales.
- Average Receivable Collection Period
- The average receivable collection period decreased from 42 days in 2019 to the lowest point of 38 days in 2021, aligning with the peak in receivables turnover and indicating a faster conversion of receivables into cash. Nevertheless, this trend reversed post-2021, with the collection period extending back to 44 days by 2023. This elongation reflects slower collections and potentially weaker credit management or more generous credit terms extended to customers.
- Overall Insights
- The data reveals an initial phase of enhanced receivables management and liquidity from 2019 through 2021, followed by a decline in performance over the subsequent two years. The simultaneous movements in both ratios confirm the inverse relationship between receivables turnover and collection period. The decline in efficiency and increased collection days after 2021 could warrant further investigation into credit policies, customer payment behaviors, or external economic factors affecting the company's receivables.
Operating Cycle
Kellanova, operating cycle calculation, comparison to benchmarks
No. days
| Dec 30, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 51 | 60 | 53 | 52 | 49 | |
| Average receivable collection period | 44 | 41 | 38 | 41 | 42 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 95 | 101 | 91 | 93 | 91 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Coca-Cola Co. | 114 | 116 | 114 | 124 | — | |
| Mondelēz International Inc. | 96 | 97 | 87 | 92 | — | |
| PepsiCo Inc. | 89 | 90 | 83 | 92 | — | |
| Philip Morris International Inc. | 341 | 360 | 353 | 403 | — | |
| Operating Cycle, Sector | ||||||
| Food, Beverage & Tobacco | 129 | 131 | 124 | 140 | — | |
| Operating Cycle, Industry | ||||||
| Consumer Staples | 59 | 64 | 55 | 58 | — | |
Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).
1 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 51 + 44 = 95
2 Click competitor name to see calculations.
- Average inventory processing period
- The average inventory processing period exhibited a general upward trend from 49 days in 2019 to a peak of 60 days in 2022, indicating a lengthening in the time inventory is held before being processed. In 2023, this period decreased notably to 51 days, suggesting an improvement in inventory turnover efficiency compared to the previous year.
- Average receivable collection period
- The average receivable collection period remained relatively stable over the observed years, fluctuating moderately between 38 and 44 days. It experienced a slight decline from 42 days in 2019 to 38 days in 2021, suggesting improved collection efficiency. However, it increased to 44 days by 2023, indicating a modest slowdown in receivable collections.
- Operating cycle
- The operating cycle generally followed an increasing trend, moving from 91 days in 2019 to a peak of 101 days in 2022. This extension signifies a longer time span between acquiring inventory and collecting cash from sales. In 2023, the operating cycle shortened to 95 days, implying an improvement in the overall operational efficiency compared to the prior year, though still higher than in 2019 through 2021.
Average Payables Payment Period
Kellanova, average payables payment period calculation, comparison to benchmarks
| Dec 30, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 3.82 | 3.60 | 3.74 | 3.66 | 3.85 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 96 | 101 | 98 | 100 | 95 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Coca-Cola Co. | 110 | 108 | 109 | 96 | — | |
| Mondelēz International Inc. | 136 | 137 | 141 | 140 | — | |
| PepsiCo Inc. | 101 | 97 | 97 | 102 | — | |
| Philip Morris International Inc. | 117 | 130 | 121 | 106 | — | |
| Average Payables Payment Period, Sector | ||||||
| Food, Beverage & Tobacco | 113 | 112 | 112 | 110 | — | |
| Average Payables Payment Period, Industry | ||||||
| Consumer Staples | 52 | 57 | 55 | 54 | — | |
Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).
1 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 3.82 = 96
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio demonstrates relative stability over the five-year period, fluctuating mildly between 3.60 and 3.85. The highest ratio of 3.85 occurred in the earliest period, followed by a general decline reaching a low of 3.60 in 2022 before a slight recovery to 3.82 in 2023. This indicates that the company’s rate of paying off its suppliers slowed somewhat during the middle years but improved again recently.
- Average Payables Payment Period
- The average payables payment period mirrors the inverse pattern of the payables turnover ratio, as expected. Starting at 95 days in 2019, the payment period increased gradually to a peak of 101 days in 2022, indicating a lengthening in the time taken to settle payables. However, the most recent data shows a reduction back down to 96 days by the end of 2023. This pattern suggests a temporary easing in payment terms or a strategic adjustment in managing supplier payments, culminating in a return to a shorter payment cycle.
- Overall Analysis
- The trends in payables turnover and payment period reveal a period of slightly slower payments during 2020 to 2022, potentially reflecting cash flow management strategies in response to external conditions. The subsequent return towards earlier levels in 2023 might indicate improved liquidity or a conscious decision to maintain stronger supplier relationships by shortening payment periods. The relative stability of the ratios across all years suggests consistent supplier management practices with only moderate fluctuations in payment behavior.
Cash Conversion Cycle
Kellanova, cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 30, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 28, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 51 | 60 | 53 | 52 | 49 | |
| Average receivable collection period | 44 | 41 | 38 | 41 | 42 | |
| Average payables payment period | 96 | 101 | 98 | 100 | 95 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | -1 | 0 | -7 | -7 | -4 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Coca-Cola Co. | 4 | 8 | 5 | 28 | — | |
| Mondelēz International Inc. | -40 | -40 | -54 | -48 | — | |
| PepsiCo Inc. | -12 | -7 | -14 | -10 | — | |
| Philip Morris International Inc. | 224 | 230 | 232 | 297 | — | |
| Cash Conversion Cycle, Sector | ||||||
| Food, Beverage & Tobacco | 16 | 19 | 12 | 30 | — | |
| Cash Conversion Cycle, Industry | ||||||
| Consumer Staples | 7 | 7 | 0 | 4 | — | |
Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).
1 2023 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 51 + 44 – 96 = -1
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period shows a general upward trend from 49 days in 2019 to a peak of 60 days in 2022, indicating that the time taken to process inventory has gradually increased over these years. However, in 2023, there is a noticeable improvement with the period reducing to 51 days, though it remains slightly higher than the initial 2019 figure.
- Average Receivable Collection Period
- The average receivable collection period exhibits relative stability with minor fluctuations. Starting at 42 days in 2019, it slightly decreased to 38 days in 2021, suggesting improved efficiency in collecting receivables during that period. Nevertheless, it increased again to 44 days by 2023, indicating slower collections compared to the earlier years.
- Average Payables Payment Period
- The average payables payment period indicates a tendency to extend the payment duration over the observed years, rising from 95 days in 2019 to a peak of 101 days in 2022. This suggests the company is taking more time to pay its payables, which could be part of cash management strategies. By 2023, this period moderately declines to 96 days, moving closer to the initial 2019 level.
- Cash Conversion Cycle
- The cash conversion cycle remains negative throughout the available data, reflecting the company's ability to convert its investments in inventory and receivables back into cash efficiently. It was -4 days in 2019, improving to -7 days from 2020 to 2021. The 2022 data is missing, but in 2023 the cycle slightly worsens to -1 day, indicating a reduction in cash flow efficiency compared to the prior peak performance, yet still maintaining a negative cycle.