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.
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Short-term Activity Ratios (Summary)
YUM! Brands Inc., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-03), 10-Q (reporting date: 2011-06-11), 10-Q (reporting date: 2011-03-19).
- Inventory Turnover
- The inventory turnover ratio demonstrates some fluctuations but generally remains within a range of approximately 29.9 to 44.26 over the analyzed quarters. Starting at 33.48 in March 2012, there was a slight decline mid-2013 to near 29.9, followed by a gradual increase reaching a peak of 44.26 in September 2015. The ratio then decreased to 36.05 by June 2016 and maintained a slightly lower level subsequently, suggesting varying efficiency in inventory management with periods of quicker inventory liquidation, particularly in late 2014 to 2015.
- Receivables Turnover
- The receivables turnover ratio shows a declining trend over the observation period. Beginning with a high of 38.09 in March 2012, the ratio fluctuated downward consistently, reaching a low of 24.77 by September 2016. This decline indicates potential elongation in the collection period of receivables, supported by corresponding increases in the average receivable collection period, which moved from around 10 days up to 15 days in the same timeframe.
- Working Capital Turnover
- The working capital turnover ratio evidences extreme variability and data gaps, with occasional spikes such as 536.59 in September 2012 and a figure of 6.4 in September 2016. The inconsistency and sparse reporting limit interpretability, but the high spikes may reflect periods of unusual operational leverage or capital structure changes. A reliable trend is not established due to incomplete data.
- Average Inventory Processing Period
- The average inventory processing period remained relatively stable, fluctuating modestly between 8 and 12 days throughout the observed periods. The data shows slight improvement with a gradual reduction to 8-10 days during 2015-2016, indicating a modest enhancement in inventory handling efficiency over time.
- Average Receivable Collection Period
- This period exhibits a gradual lengthening trend. Initially around 9-11 days in early periods, it increased to a range of 12-15 days by 2015-2016. This suggests slower collection from customers, which aligns with the observed decrease in receivables turnover.
- Operating Cycle
- The operating cycle remains relatively consistent, fluctuating between 20 and 25 days across all quarters. Minor increases in the operating cycle observed toward 2015-2016 correspond with the elongation of the average receivable collection period, reflecting a slight rise in the total time taken to convert inventory and receivables into cash.
Turnover Ratios
Average No. Days
Inventory Turnover
YUM! Brands Inc., inventory turnover calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | Dec 31, 2011 | Sep 3, 2011 | Jun 11, 2011 | Mar 19, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Company restaurant expenses | ||||||||||||||||||||||||||||||
| Inventories | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Inventory turnover1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||||
| McDonald’s Corp. | ||||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-03), 10-Q (reporting date: 2011-06-11), 10-Q (reporting date: 2011-03-19).
1 Q3 2016 Calculation
Inventory turnover
= (Company restaurant expensesQ3 2016
+ Company restaurant expensesQ2 2016
+ Company restaurant expensesQ1 2016
+ Company restaurant expensesQ4 2015)
÷ Inventories
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends across company restaurant expenses, inventories, and inventory turnover ratios over the examined periods.
- Company Restaurant Expenses
-
The expenses incurred for company restaurants demonstrate a consistent seasonal pattern, with marked increases typically observed in the fourth quarter of each year. The quarterly expenses show a cyclical rise toward year-end, peaking in December quarters. For instance, expenses in December 2011, 2012, 2013, and 2014 reached amounts above 3 billion US dollars, reflecting increased operational activity or seasonal factors around these periods.
Between the first quarter and the following third quarter of each year, expenses tend to show gradual growth, indicating steady operational scaling or inflationary pressures. Over the multi-year span, despite some fluctuations, the overall level of spending remains relatively stable without a clear upward or downward long-term trend, suggesting that the company maintains consistent cost control in this area.
Notably, the expense figures from early 2016 show a slight reduction compared to previous years' corresponding quarters, which may imply improved efficiency or cost-saving initiatives.
- Inventories
-
Inventory levels exhibit variability with a mild seasonal trend similar to expenses but with less pronounced peaks. Inventories tend to increase in the middle of the year, often reaching higher values around the second and fourth quarters.
From 2011 through 2016, inventory balances fluctuate within a range of approximately 150 to 320 million US dollars. The highest values are usually recorded around mid-year or at year-end, which may reflect stockpiling to meet anticipated seasonal demand or supply chain scheduling.
There is no obvious sustained upward or downward trend over the examined periods; rather, inventories show cyclical adjustments aligned with operational needs. The data from early 2016 points to inventory amounts at the lower end of this historical range, possible evidence of inventory optimization or changes in supply chain strategy.
- Inventory Turnover Ratio
-
Inventory turnover ratios suggest the efficiency with which the company manages its inventory relative to sales. The values generally remain high, mostly oscillating between 30 and 45 times per year, indicating rapid inventory movement.
Periodically, an upward trend in turnover ratios can be observed, especially between 2014 and 2016, where ratios increase from roughly the low 30s to the mid-40s. This acceleration implies that inventories are being converted into sales more quickly, highlighting potential improvements in demand forecasting, inventory management, or supply chain responsiveness.
Fluctuations occur within each year, but the increasing turnover towards later years suggests a favorable progression in operational efficiency. The peak turnover ratios near the end of 2015 further reinforce this positive development.
In summary, the data reveal stable cost patterns in company restaurant expenses with seasonal spikes, cyclical inventory balances aligned with operational cycles, and progressive improvements in inventory turnover ratios. These insights suggest continued focus on cost control and enhanced inventory management efficiency over the observed timeframe.
Receivables Turnover
YUM! Brands Inc., receivables turnover calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | Dec 31, 2011 | Sep 3, 2011 | Jun 11, 2011 | Mar 19, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Company sales | ||||||||||||||||||||||||||||||
| Accounts and notes receivable, net | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Receivables turnover1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Airbnb Inc. | ||||||||||||||||||||||||||||||
| Booking Holdings Inc. | ||||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||||
| DoorDash, Inc. | ||||||||||||||||||||||||||||||
| McDonald’s Corp. | ||||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-03), 10-Q (reporting date: 2011-06-11), 10-Q (reporting date: 2011-03-19).
1 Q3 2016 Calculation
Receivables turnover
= (Company salesQ3 2016
+ Company salesQ2 2016
+ Company salesQ1 2016
+ Company salesQ4 2015)
÷ Accounts and notes receivable, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The quarterly financial data reveals several notable trends regarding sales, receivables, and receivables turnover over the observed period.
- Company Sales
- Sales exhibit a marked seasonal pattern characterized by consistent increases in the fourth quarter of each fiscal year. This is evident as sales peak every December, for example, reaching highs of 3,557 million USD in December 2011 and slightly incrementing in subsequent years, with peaks of 3,585 million in December 2012 and 3,590 million in December 2013. However, the data also indicates some variability across the years. While the general upward trend is present from 2011 through 2013, sales in the first quarters tend to be lower, and slight fluctuations occur in mid-year and third-quarter figures. The peaks in late 2014 and 2015 show a lower maximum compared to earlier years, suggesting potential softening in growth momentum late in the period.
- Accounts and Notes Receivable, Net
- Receivables display a gradual upward trend over the analyzed quarters, increasing from 311 million USD in March 2011 to 440 million USD by September 2016. Although fluctuations occur, notably declines in certain quarters such as December 2013 (319 million USD) and December 2014 (325 million USD), the overall trajectory is ascending. This growth in receivables may reflect expanding sales volumes, changes in credit policies, or delays in collections.
- Receivables Turnover Ratio
- The turnover ratio, quantifying how many times receivables are collected during the period, demonstrates a general decline over time. Starting at approximately 38.09 in March 2012 and fluctuating thereafter, the ratio trends downward to approximately 24.77 by September 2016. This decline suggests a slowing in the efficiency of converting receivables into cash. The turnover ratio exhibits some seasonal variability, often dipping in the quarters leading to year-end and rebounding slightly shortly after. The downward trend implies increasing days sales outstanding and could indicate extended credit terms or challenges in collections.
In summary, sales show a consistent seasonal peak pattern with some variability in growth across years. Receivables have generally increased concurrently, but the declining turnover ratio highlights reduced efficiency in receivables management. These trends suggest a possible need for further evaluation of credit and collection policies to maintain liquidity and support continued growth.
Working Capital Turnover
YUM! Brands Inc., working capital turnover calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | Dec 31, 2011 | Sep 3, 2011 | Jun 11, 2011 | Mar 19, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||||
| Less: Current liabilities | ||||||||||||||||||||||||||||||
| Working capital | ||||||||||||||||||||||||||||||
| Company sales | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Working capital turnover1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||||||||
| Airbnb Inc. | ||||||||||||||||||||||||||||||
| Booking Holdings Inc. | ||||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||||
| DoorDash, Inc. | ||||||||||||||||||||||||||||||
| McDonald’s Corp. | ||||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-03), 10-Q (reporting date: 2011-06-11), 10-Q (reporting date: 2011-03-19).
1 Q3 2016 Calculation
Working capital turnover
= (Company salesQ3 2016
+ Company salesQ2 2016
+ Company salesQ1 2016
+ Company salesQ4 2015)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The data presents quarterly financial metrics over a multi-year period, showing distinct trends in working capital, company sales, and working capital turnover ratios.
- Working Capital
- Working capital figures exhibit significant volatility and a downward trend overall. Initial quarters in 2011 show positive working capital values, but from late 2011 onward, there are recurrent negative values, with some quarters showing pronounced deficits, such as -129 million in December 2011 and reaching a peak negative value of -2,685 million in March 2016. The variability is substantial, with occasional recoveries illustrated by positive values such as 1,704 million in September 2016 following a large negative swing.
- Company Sales
- Company sales demonstrate a more stable and generally upward trajectory throughout the period. Each fiscal year's quarters show a repeated cyclical pattern, with sales increasing steadily from early years around 2,000 million to peaks nearing or exceeding 3,500 million in some quarters. Despite minor fluctuations, the overall trend indicates gradual growth, with quarterly sales between approximately 2,000 and 3,600 million US dollars. There are no abrupt declines in sales, suggesting consistent revenue generation.
- Working Capital Turnover
- The working capital turnover ratio data is sparse and largely incomplete, with values reported only for a few quarters. Notably, two early data points in 2012 show exceptionally high and likely anomalous ratios (329 and 536.59), which are inconsistent with other parts of the dataset or industry norms. The last recorded turnover ratio in late 2016 is 6.4, significantly lower than the earlier extreme figures, which could indicate normalization or improved operational efficiency relative to working capital.
Overall, the data indicates improving sales performance over the period, while working capital management appears challenging, reflected in wide swings and frequent negative values. The limited and erratic working capital turnover data restricts precise interpretations, although extreme early values suggest some irregularities or data anomalies. The substantial negative working capital periods may point to liquidity constraints or aggressive working capital strategies. Continuous monitoring and strategic adjustments seem essential to align working capital dynamics with the steady increase in sales.
Average Inventory Processing Period
YUM! Brands Inc., average inventory processing period calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | Dec 31, 2011 | Sep 3, 2011 | Jun 11, 2011 | Mar 19, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||||
| Inventory turnover | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||||
| Average inventory processing period1 | ||||||||||||||||||||||||||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | ||||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||||
| McDonald’s Corp. | ||||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-03), 10-Q (reporting date: 2011-06-11), 10-Q (reporting date: 2011-03-19).
1 Q3 2016 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The inventory turnover ratio demonstrates fluctuations over the observed periods, starting from a level of 33.48 and showing a generally variable pattern with peaks and valleys through subsequent quarters. Notably, there is an overall increasing tendency towards the end of the timeline, reaching the highest values of 44.26 and 41.36 in the ninth and tenth quarters from the final date, before a subsequent decline. This suggests periods of improved efficiency in inventory management, followed by some regression.
Concurrently, the average inventory processing period, measured in days, exhibits slight variability but remains relatively stable, mostly oscillating between 9 and 12 days. The trend shows a minor decrease toward the middle and end of the period, reaching 8 to 10 days, which indicates a faster processing time and potentially more efficient inventory turnover in those quarters reflecting higher inventory turnover ratios.
- Inventory Turnover Ratio
- Ranges between approximately 29.9 and 44.26, indicating variability in how frequently inventory is sold and replaced during the periods assessed.
- Demonstrates an upward trend in the latter part of the dataset, suggesting improved inventory efficiency.
- Average Inventory Processing Period (days)
- Varies from 8 to 12 days, showing relative stability with slight improvements over time.
- Lower days correspond to higher turnover ratios, signifying a direct relationship between faster inventory processing and increased turnover.
Overall, the data reflects a dynamic inventory management pattern with improvements in turnover efficiency over time, as mirrored by decreasing average processing days. These trends indicate that inventory control practices may have become more effective in recent quarters, resulting in a stronger conversion of inventory into sales while maintaining shorter holding periods.
Average Receivable Collection Period
YUM! Brands Inc., average receivable collection period calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | Dec 31, 2011 | Sep 3, 2011 | Jun 11, 2011 | Mar 19, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||||
| Receivables turnover | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||||
| Average receivable collection period1 | ||||||||||||||||||||||||||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||||||||
| Airbnb Inc. | ||||||||||||||||||||||||||||||
| Booking Holdings Inc. | ||||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||||
| DoorDash, Inc. | ||||||||||||||||||||||||||||||
| McDonald’s Corp. | ||||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-03), 10-Q (reporting date: 2011-06-11), 10-Q (reporting date: 2011-03-19).
1 Q3 2016 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio displayed a generally declining trend from 2011 through 2016. Starting at 38.09 in early 2011, the ratio showed fluctuations but gradually decreased to 24.77 by late 2016. This indicates a slower rate of receivables collection over the observed periods, implying that the company is taking a longer time to convert its receivables into cash as time progressed.
- Average Receivable Collection Period
- The average receivable collection period, expressed in days, exhibited an increasing trend over the same timeframe. Initially, the collection period was approximately 9-10 days in the early quarters, but by the end of 2016, it had lengthened to around 15 days. This lengthening in the collection period aligns with the decrease in the receivables turnover ratio, reinforcing the indication that the company is experiencing slower collection of outstanding receivables.
- Combined Insights
- The inverse relationship between the receivables turnover ratio and the average receivable collection period conforms to financial theory, where a falling turnover is expected to coincide with an increasing collection period. The trend suggests potential issues with credit management or changes in customer payment behavior. This could have implications for cash flow management and working capital efficiency, warranting closer attention to credit policies or collection efforts.
Operating Cycle
YUM! Brands Inc., operating cycle calculation (quarterly data)
No. days
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | Dec 31, 2011 | Sep 3, 2011 | Jun 11, 2011 | Mar 19, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||||
| Average inventory processing period | ||||||||||||||||||||||||||||||
| Average receivable collection period | ||||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||||
| Operating cycle1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Operating Cycle, Competitors2 | ||||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||||
| McDonald’s Corp. | ||||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-03), 10-Q (reporting date: 2011-06-11), 10-Q (reporting date: 2011-03-19).
1 Q3 2016 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period displays moderate fluctuations over the observed quarters. Starting around 11 days, it oscillates mainly between 9 and 12 days. Notably, there is a gradual decrease in this period from 11 days in early 2014 to 8 days in the third quarter of 2015, indicating an improvement in inventory management efficiency. However, it slightly rebounds to 10 days by the final quarter noted, suggesting some variability but an overall relatively stable inventory turnover.
- Average Receivable Collection Period
- The trend in the average receivable collection period shows a tendency towards elongation over time. Initially around 10 to 12 days, the period extends nearly every quarter, reaching up to 15 days in the last reported quarter. This gradual increase suggests a slower collection of receivables, which could impact the company's cash flow management and indicates potential challenges in credit or payment terms with customers.
- Operating Cycle
- The operating cycle, reflecting the combined effect of inventory processing and receivable collection periods, shows a slight increasing trend during the timeline. It begins approximately at 20 to 22 days and advances to 25 days by the end of the period under review. This increase aligns primarily with the elongation observed in the receivable collection period, partially offset by a stable or slightly improved inventory processing period. Overall, this indicates that the company's total cash conversion cycle is extending, which may affect working capital efficiency.