General Mills Inc (GIS)

Short-term

Turnover ratios

The activity ratios of General Mills Inc. over the periods provided exhibit notable patterns that warrant detailed analysis.

Inventory Turnover:
The inventory turnover ratio shows fluctuation between positive and negative values across the reporting periods. Specifically, on May 28, 2023, the ratio was negative at -2.11, indicating a possible anomaly or data inconsistency. By May 31, 2023, it increased to 6.24, reflecting a more efficient inventory management and higher sales relative to inventory levels. The ratio declined again to -2.58 on May 26, 2024, before rising to 6.81 on May 31, 2024, and slightly decreasing to 6.68 on May 31, 2025. The positive values from May 2023 onward suggest a significant improvement in inventory turnover compared to earlier measurements, indicating effective inventory management and faster inventory conversion into sales.

Receivables Turnover:
This ratio demonstrates consistent improvement over time, increasing from a low of 1.16 on May 28, 2023, to 9.98 on May 31, 2023. Subsequently, it climbs further to 10.24 on May 26, 2024, and reaches 10.85 on May 31, 2025. The upward trend indicates the company's enhanced efficiency in collecting receivables, reducing the average collection period, and potentially improving cash flow liquidity over the observed periods.

Payables Turnover:
The payables turnover ratio shows variability with initial negative values, -1.09 on May 28, 2023, and -1.23 on May 26, 2024, which could suggest data irregularities or specific accounting practices affecting the ratio calculation. In contrast, positive ratios are recorded on May 31, 2023 (3.23), May 31, 2024 (3.24), and May 31, 2025 (3.18), within a relatively stable range. These figures imply consistent management of supplier payments, with the company maintaining a steady pace in settling payables, aligning with industry norms.

Working Capital Turnover:
Data for working capital turnover is unavailable across all periods, as indicated by the placeholder symbols, thus preventing analysis of this ratio's trends or implications within this dataset.

Summary:
Overall, the activity ratios suggest that General Mills Inc. has improved its operational efficiency in managing receivables and inventory over the periods examined, with receivables showing the most consistent positive trend. The anomalies in inventory and payables ratios could result from data inconsistencies or specific accounting or operational factors. Continuity and positive trends in key efficiency ratios reflect well on the company's operational effectiveness, although further data verification would be beneficial for more precise insights.

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Average number of days

The analysis of General Mills Inc.'s activity ratios over the specified periods reveals insights into the company's operational efficiency and working capital management.

Days of Inventory on Hand (DOH):
The data indicates that the company has maintained a relatively stable inventory holding period across the observed periods. As of May 31, 2023, the DOH was 58.51 days, which decreased slightly to 53.60 days by May 31, 2024. This suggests a marginal improvement in inventory turnover, potentially reflecting more efficient inventory management or changes in product demand. The period ending May 31, 2025, shows a slight increase to 54.66 days, implying a modest extension in inventory holding periods, which could be due to inventory buildup or strategic holding.

Days of Sales Outstanding (DSO):
The DSO exhibits a significant decrease over the periods, indicating improved efficiency in collecting receivables. As of May 28, 2023, the DSO was extremely high at 313.87 days, which appears to be an anomaly or data inconsistency, since the subsequent data for May 31, 2023, reports 36.58 days. Following this, the DSO stabilized around 35.63 days in 2024 and slightly decreased to 33.64 days in 2025. The substantial reduction from the initial figure (likely a data anomaly) to the subsequent periods signifies enhanced receivables collection practices and a more efficient cash conversion cycle.

Number of Days of Payables:
The company's days payables period remained consistent, with values around 112.99 days in May 2023, declining slightly to 112.61 days by May 31, 2024, and increasing marginally to 114.70 days in 2025. This stability indicates that the company maintains a relatively steady approach to supplier payments, aligning with industry standards or negotiated credit terms.

Overall Observations:
The activity ratios suggest that General Mills Inc. has been managing its inventory and receivables effectively in recent periods, with notable improvements in receivables collection efficiency. The stability of the payables period points to a consistent approach to vendor relations and credit terms. Slight fluctuations in inventory days may reflect operational adjustments or strategic inventory holdings. Collectively, these ratios point toward a company focusing on optimizing its working capital components to enhance liquidity and operational performance.

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See also:

General Mills Inc Short-term (Operating) Activity Ratios

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Long-term

The analysis of General Mills Inc.’s long-term activity ratios, focusing on the fixed asset turnover and total asset turnover, reveals notable fluctuations over the periods examined.

Fixed Asset Turnover:
This ratio measures the company's efficiency in utilizing its fixed assets—primarily property, plant, and equipment—to generate sales. The data indicates a significant variation between May 28, 2023, and May 31, 2023, with the ratio declining sharply from approximately 5.53 to 0.54. Such a drastic decrease suggests a possible entry of substantial new fixed assets, impairment, or a temporary decline in sales relative to the existing fixed asset base during this interval. Subsequently, the fixed asset turnover stabilizes at around 0.53 for May 26, 2024. The absence of data beyond this point precludes further trend analysis, but the near-identical ratio indicates persistent low efficiency in asset utilization during that period.

Total Asset Turnover:
This ratio evaluates how effectively the company uses its total assets to generate sales. The data shows a significant drop from approximately 0.64 on May 31, 2023, to 0.06 on May 28, 2023, indicating a sudden and substantial decrease in overall asset efficiency. This anomaly may reflect a reclassification of assets, large asset acquisitions not immediately contributing to sales, or reporting adjustments. The ratio then appears to have remained stable around 0.06 to 0.63 in the subsequent periods, with the most recent data (May 31, 2024) at approximately 0.63 and an expected slight decrease to 0.59 by May 31, 2025. These figures suggest that, after the initial anomaly, the company's efficiency in using total assets returned to levels comparable to prior periods, albeit at relatively low ratios indicative of conservative or asset-heavy operations.

Overall Assessment:
The observed long-term activity ratios for General Mills reveal a period of significant fluctuation, likely driven by accounting changes, asset revaluations, or one-time events rather than sustained operational shifts. The pronounced spike and subsequent decline in fixed asset turnover, coupled with the erratic shifts in total asset turnover, highlight the importance of contextual understanding of specific reporting periods. Given the relatively low ratios in the stable periods, it can be inferred that the company's assets are not highly leveraged in generating sales efficiently, which might be characteristic of companies in the food manufacturing sector with substantial physical assets. Continuing to monitor future ratios will provide clarity on whether these fluctuations represent temporary anomalies or longer-term strategic shifts.

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See also:

General Mills Inc Long-term (Investment) Activity Ratios