General Mills Inc (GIS)

Short-term

Turnover ratios

The activity ratios for General Mills Inc., including inventory turnover, receivables turnover, payables turnover, and working capital turnover, reveal key insights into the company's operational efficiency over the period from August 2022 to May 2025.

Inventory Turnover:
The inventory turnover ratio shows notable fluctuations over the analyzed period. Starting at approximately 6.47–6.54 in August 2022, it increased steadily, peaking around February 2024 at approximately 8.34, indicating that inventory was being sold and replaced more frequently during this period. Subsequent quarters show a slight decline, but the ratio remains above 6.0, suggesting consistent inventory management efficiency. The peak suggests periods of higher operational efficiency or potential changes in inventory levels.

Receivables Turnover:
This ratio exhibits relative stability, generally oscillating around the 11.0 to 12.0 range. Starting at roughly 11.26–11.36 in August 2022, the ratio maintains similar levels, with occasional modest increases, reaching approximately 11.43 by February 2024. The slight upward trend indicates that the company has been able to efficiently collect receivables, stabilizing its cash flow and overall liquidity position.

Payables Turnover:
This metric indicates the company's ability to settle its obligations to suppliers, fluctuating modestly between approximately 3.11 and 4.22 over the period. The ratio generally trended upward, from around 3.57–3.61 in August 2022 to a peak of about 4.22 in February 2024, potentially implying faster payment to suppliers or improved payables management. Nonetheless, the ratios illustrate that General Mills maintains a manageable accounts payable cycle, balancing credit terms with supplier relationships.

Working Capital Turnover:
Data for this ratio are unavailable across all periods, indicating either the ratio was not computed or not reported during this timeframe.

Overall Analysis:
The activity ratios collectively suggest that General Mills has maintained generally stable operational efficiency over the analyzed period. Improvements in inventory turnover point to better inventory management and more rapid movement of stock. Consistent receivables turnover implies effective collection processes, supporting steady cash flows. Modest fluctuations in payables turnover indicate a balanced approach toward supplier payments. These ratios, reflecting a well-managed supply chain and receivables process, underscore the company's ability to optimize operational assets, contributing positively to overall fiscal health and liquidity management.

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Average number of days

The analysis of General Mills Inc.'s activity ratios over the specified periods reveals several notable trends and fluctuations aligned with its operational and inventory management practices.

Days of Inventory on Hand (DOH):
The DOH exhibits variability across the reported periods. Initially, the ratio declined from approximately 56.41 days in August 2022 to a low of around 48.24 days in late February 2023, indicating a trend toward decreased inventory levels or increased inventory turnover during this period. Between May and August 2023, the DOH increased again, reaching approximately 58.95 days, suggesting a buildup of inventory or slower turnover. Subsequently, the ratio decreased substantially to about 43.77 days in late February 2024, implying improved inventory efficiency. The upward movement afterward, surpassing 50 days in some periods, indicates recurrent fluctuations, possibly reflecting seasonal demand cycles or supply chain adjustments. Overall, the company has demonstrated periods of both inventory accumulation and reduction, with recent data indicating improved inventory management around February 2024.

Days of Sales Outstanding (DSO):
The DSO remained relatively stable throughout the period, fluctuating narrowly between approximately 29.94 and 36.16 days. Notably, the average collection period was longest in late May 2023 at around 36.16 days and was shortest in late February/early March 2024 at approximately 31.94 to 32.25 days. The consistent proximity of these figures suggests stable receivables management, with slight short-term variations that may correspond to seasonal or strategic adjustments in credit policies.

Number of Days of Payables:
The payables period displayed greater fluctuation, with a general trend of lengthening through the period. Starting near 102 days in August 2022, the ratio increased substantially over time, reaching above 105 days in several recent periods, notably in May and August 2024. The highest values, exceeding 109 days, imply extended credit terms with suppliers or deliberate delay in payments to optimize working capital. Despite some slight decreases, the overall trend indicates an increasingly extended payables period, which may be a strategic cash management approach or reflective of supplier negotiations.

Summary:
Overall, General Mills has demonstrated consistent control over its receivables, maintaining a stable DSO that suggests effective collection processes. The inventory turnover has experienced short-term fluctuations, with periods of both inventory reduction and accumulation, likely influenced by operational needs and seasonal factors. The most pronounced activity ratio trend is seen in the payables period, which has extended over time, potentially enhancing liquidity by deferring payments to suppliers. These activity ratios collectively suggest a focus on operational efficiency and strategic working capital management, balancing inventory levels, receivables, and payables to sustain liquidity and operational flexibility.

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See also:

General Mills Inc Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

The long-term activity ratios of General Mills Inc., specifically the Fixed Asset Turnover and Total Asset Turnover ratios, demonstrate certain trends over the analyzed period.

The Fixed Asset Turnover ratio has experienced fluctuations, with values ranging between approximately 5.19 and 6.12. Notably, it peaked at 6.12 in late February 2023, indicating a period of relatively efficient utilization of fixed assets to generate sales. Following this peak, there has been a general downward trend, with the ratio decreasing to around 5.19 by May 2024 and maintaining similar levels through the subsequent observations, suggesting a reduction in the efficiency of fixed asset utilization over time.

Conversely, the Total Asset Turnover ratio has remained relatively stable, exhibiting minor variations within a narrow band from approximately 0.59 to 0.66. The ratio hovered around 0.63 to 0.66 during the initial periods, reaching a maximum of 0.66 in late February 2024, before declining slightly to values near 0.59 toward the end of the observed timeline. This stability indicates a consistent overall efficiency in utilizing total assets to generate sales, despite some fluctuations.

Overall, the data suggests that while General Mills has experienced some decline in the efficiency of fixed asset utilization, as indicated by the decreasing Fixed Asset Turnover ratio, its total asset utilization has remained relatively stable. The pattern may reflect strategic shifts, asset base adjustments, or operational changes impacting fixed asset productivity, but the company's broader asset efficiency in generating sales appears to have been relatively resilient over the period.

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See also:

General Mills Inc Long-term (Investment) Activity Ratios (Quarterly Data)