General Mills Inc (GIS)
Activity ratios
Short-term
Turnover ratios
| May 26, 2024 | May 28, 2023 | May 29, 2022 | May 30, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | -2.58 | -2.11 | -2.29 | -2.34 | -2.86 |
| Receivables turnover | 1.20 | 1.16 | 1.26 | 1.34 | 1.27 |
| Payables turnover | -1.23 | -1.09 | -1.07 | -1.17 | -1.26 |
| Working capital turnover | — | — | — | — | — |
General Mills Inc's activity ratios provide insights into how efficiently the company is managing its inventory, receivables, and payables.
- Inventory turnover has been declining over the past five years, from -2.86 in 2020 to -2.58 in 2024. A negative inventory turnover ratio indicates that the company may be holding onto inventory for an extended period, affecting cash flow and potentially leading to obsolescence or higher storage costs.
- Receivables turnover has also shown a decreasing trend, from 1.34 in 2021 to 1.20 in 2024. This suggests that the company is taking longer to collect payments from customers, which could impact liquidity and working capital management.
- Payables turnover has fluctuated over the years, with a negative ratio indicating that the company is taking longer to pay its suppliers. While extending payables can improve cash flow, it may strain relationships with vendors if not managed effectively.
- The absence of data for working capital turnover makes it challenging to assess how efficiently the company is utilizing its working capital to generate revenue.
In summary, General Mills Inc may need to focus on improving inventory management, accelerating receivables collection, and optimizing payables to enhance overall efficiency and financial performance.
Average number of days
| May 26, 2024 | May 28, 2023 | May 29, 2022 | May 30, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 303.81 | 313.87 | 289.38 | 273.18 | 288.19 |
| Number of days of payables | days | — | — | — | — | — |
The activity ratios of General Mills Inc indicate its efficiency in managing inventory, collecting receivables, and paying creditors.
1. Days of Inventory on Hand (DOH): The information for the DOH ratio is not provided in the table. This ratio measures the average number of days it takes the company to sell its inventory. A lower DOH value is generally preferable as it indicates faster inventory turnover, reducing the risk of obsolete inventory and associated holding costs.
2. Days of Sales Outstanding (DSO): General Mills Inc's DSO has shown slight fluctuations over the past five years, ranging from 273.18 days in 2021 to 313.87 days in 2023. The DSO ratio reflects the average number of days it takes for the company to collect payments from its customers after making a sale. A lower DSO value indicates better efficiency in collecting accounts receivable and improving cash flow.
3. Number of Days of Payables: The data for the number of days of payables is not provided in the table. This ratio measures the average number of days it takes the company to pay its suppliers. A longer payment period allows the company to hold onto cash longer for other uses, but excessive delays can strain supplier relationships.
Overall, monitoring these activity ratios can provide insights into General Mills Inc's operational efficiency, financial health, and effectiveness in managing its working capital cycle.
See also:
General Mills Inc Short-term (Operating) Activity Ratios
Long-term
| May 26, 2024 | May 28, 2023 | May 29, 2022 | May 30, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.53 | 0.54 | 0.63 | 0.61 | 0.57 |
| Total asset turnover | 0.06 | 0.06 | 0.07 | 0.07 | 0.07 |
The fixed asset turnover ratio for General Mills Inc has shown a slight decline from 0.61 in May 2021 to 0.53 in May 2024. This indicates that the company generated $0.53 in sales revenue for every dollar invested in fixed assets in the most recent year. The decreasing trend in this ratio suggests that the company may be less efficient in utilizing its fixed assets to generate sales.
Similarly, the total asset turnover ratio has remained relatively stable at around 0.06 to 0.07 over the past five years. This ratio indicates that the company generated $0.06 to $0.07 in sales revenue for every dollar of total assets during the same period. The consistency in this ratio implies that General Mills has been maintaining a steady level of efficiency in generating sales relative to its total asset base.
Overall, while the fixed asset turnover ratio has shown a downward trend, the total asset turnover ratio has remained relatively stable for General Mills Inc over the past five years. Further analysis of the company's operational and investment activities may be needed to understand the underlying factors driving these trends in the long-term activity ratios.