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)
Reynolds American Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Reynolds American Inc. inventory turnover ratio deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Reynolds American Inc. receivables turnover ratio improved from 2014 to 2015 and from 2015 to 2016. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Reynolds American Inc. payables turnover ratio decreased from 2014 to 2015 and from 2015 to 2016. |
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Reynolds American Inc. number of days of inventory outstanding deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Reynolds American Inc. number of days of receivables outstanding improved from 2014 to 2015 and from 2015 to 2016. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Reynolds American Inc. operating cycle deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Reynolds American Inc. number of days of payables outstanding increased from 2014 to 2015 and from 2015 to 2016. |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Reynolds American Inc. cash conversion cycle deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level. |
Inventory Turnover
Reynolds American Inc., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of products sold, excludes excise taxes | 4,841) | 4,688) | 4,058) | 3,678) | 4,321) | |
| Inventories | 1,645) | 1,734) | 1,281) | 1,127) | 984) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 2.94 | 2.70 | 3.17 | 3.26 | 4.39 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Inventory turnover = Cost of products sold, excludes excise taxes ÷ Inventories
= 4,841 ÷ 1,645 = 2.94
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Reynolds American Inc. inventory turnover ratio deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level. |
Receivables Turnover
Reynolds American Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales, includes excise taxes | 16,846) | 14,884) | 12,096) | 11,966) | 12,227) | |
| Accounts receivable | 66) | 68) | 116) | 106) | 87) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 255.24 | 218.88 | 104.28 | 112.89 | 140.54 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Receivables turnover = Net sales, includes excise taxes ÷ Accounts receivable
= 16,846 ÷ 66 = 255.24
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Reynolds American Inc. receivables turnover ratio improved from 2014 to 2015 and from 2015 to 2016. |
Payables Turnover
Reynolds American Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of products sold, excludes excise taxes | 4,841) | 4,688) | 4,058) | 3,678) | 4,321) | |
| Accounts payable | 221) | 179) | 142) | 185) | 187) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 21.90 | 26.19 | 28.58 | 19.88 | 23.11 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Payables turnover = Cost of products sold, excludes excise taxes ÷ Accounts payable
= 4,841 ÷ 221 = 21.90
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Reynolds American Inc. payables turnover ratio decreased from 2014 to 2015 and from 2015 to 2016. |
Working Capital Turnover
Reynolds American Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 4,238) | 6,187) | 3,323) | 3,655) | 4,812) | |
| Less: Current liabilities | 4,985) | 5,291) | 3,544) | 3,076) | 3,769) | |
| Working capital | (747) | 896) | (221) | 579) | 1,043) | |
| Net sales, includes excise taxes | 16,846) | 14,884) | 12,096) | 11,966) | 12,227) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | — | 16.61 | — | 20.67 | 11.72 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Working capital turnover = Net sales, includes excise taxes ÷ Working capital
= 16,846 ÷ -747 = —
2 Click competitor name to see calculations.
Average Inventory Processing Period
Reynolds American Inc., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 2.94 | 2.70 | 3.17 | 3.26 | 4.39 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 124 | 135 | 115 | 112 | 83 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 2.94 = 124
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Reynolds American Inc. number of days of inventory outstanding deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level. |
Average Receivable Collection Period
Reynolds American Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 255.24 | 218.88 | 104.28 | 112.89 | 140.54 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 1 | 2 | 4 | 3 | 3 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 255.24 = 1
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Reynolds American Inc. number of days of receivables outstanding improved from 2014 to 2015 and from 2015 to 2016. |
Operating Cycle
Reynolds American Inc., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 124 | 135 | 115 | 112 | 83 | |
| Average receivable collection period | 1 | 2 | 4 | 3 | 3 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 125 | 137 | 119 | 115 | 86 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 124 + 1 = 125
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Reynolds American Inc. operating cycle deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level. |
Average Payables Payment Period
Reynolds American Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 21.90 | 26.19 | 28.58 | 19.88 | 23.11 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 17 | 14 | 13 | 18 | 16 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 21.90 = 17
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Reynolds American Inc. number of days of payables outstanding increased from 2014 to 2015 and from 2015 to 2016. |
Cash Conversion Cycle
Reynolds American Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 124 | 135 | 115 | 112 | 83 | |
| Average receivable collection period | 1 | 2 | 4 | 3 | 3 | |
| Average payables payment period | 17 | 14 | 13 | 18 | 16 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 108 | 123 | 106 | 97 | 70 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 2016 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 124 + 1 – 17 = 108
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Reynolds American Inc. cash conversion cycle deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level. |