Kellanova (K)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 7.11 | 6.60 | 8.91 | 7.04 | 7.50 |
| Receivables turnover | 8.37 | 7.29 | 9.52 | 8.96 | 8.62 |
| Payables turnover | 3.82 | 3.44 | 4.84 | 3.66 | 3.85 |
| Working capital turnover | — | — | — | — | — |
The inventory turnover ratio for Kellanova has been relatively stable over the past five years, ranging from 6.60 to 8.91. This indicates that the company is efficiently managing its inventory and turning it into sales. A higher inventory turnover ratio is generally favorable as it signifies faster inventory conversion into sales.
The receivables turnover ratio has also shown consistent performance for Kellanova, with values ranging from 7.29 to 9.52. This suggests that the company is efficient in collecting outstanding receivables from its customers. A higher receivables turnover ratio indicates a shorter average collection period, which is a positive indicator of effective credit management.
In terms of payables turnover, Kellanova has maintained a stable trend with values varying from 3.44 to 4.84. The payables turnover ratio demonstrates how quickly the company pays its suppliers. A higher payables turnover ratio implies that the company is taking longer to pay its trade payables, potentially improving its cash flow position.
Unfortunately, there is no data provided for the working capital turnover ratio, making it impossible to assess how effectively Kellanova is utilizing its working capital to generate sales. This ratio is essential for understanding the efficiency of the company's working capital management.
Overall, Kellanova demonstrates consistent efficiency in managing its inventory, receivables, and payables turnover, which are crucial indicators of the company's operational performance and liquidity management.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 51.33 | 55.27 | 40.97 | 51.83 | 48.66 |
| Days of sales outstanding (DSO) | days | 43.62 | 50.08 | 38.32 | 40.74 | 42.37 |
| Number of days of payables | days | 95.55 | 106.01 | 75.40 | 99.74 | 94.73 |
Activity ratios, such as days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables, provide insights into how efficient Kellanova is in managing its inventory, collecting its receivables, and paying its suppliers, respectively.
- Days of inventory on hand (DOH) measures how many days, on average, Kellanova holds its inventory before selling it. A decreasing trend in DOH from 55.27 days in 2022 to 51.33 days in 2023 indicates that Kellanova is managing its inventory more efficiently, possibly due to better inventory management practices or demand forecasting.
- Days of sales outstanding (DSO) indicates the average number of days it takes for Kellanova to collect its receivables from customers. A decreasing trend in DSO from 50.08 days in 2022 to 43.62 days in 2023 suggests that the company is improving its receivables collection process, potentially by tightening credit policies or enhancing collection efforts.
- Number of days of payables measures how long Kellanova takes to pay its suppliers. An increasing trend in the number of days of payables from 106.01 days in 2022 to 95.55 days in 2023 could indicate that the company is taking longer to settle its payables, potentially to improve cash flow or negotiate more favorable payment terms with suppliers.
Overall, the trend in these activity ratios for Kellanova reflects an improvement in inventory management and receivables collection efficiency, while also potentially indicating a deliberate strategy to extend payables to optimize cash flow. Management should continue monitoring these ratios to ensure sustainable financial performance and efficient working capital management.
See also:
Kellanova Short-term (Operating) Activity Ratios
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.09 | 4.09 | 3.71 | 3.71 | 3.76 |
| Total asset turnover | 0.84 | 0.68 | 0.78 | 0.77 | 0.77 |
The long-term activity ratios of Kellanova over the past five years show the efficiency with which the company is utilizing its assets to generate sales revenue.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio has remained relatively stable at around 4.09 for both 2023 and 2022, indicating that Kellanova is generating sales revenue four times the value of its fixed assets. This suggests that the company is effectively using its fixed assets to generate revenue.
- Comparing to 2021 and earlier years, the fixed asset turnover has improved, showing an increasing trend. This indicates that Kellanova has become more efficient in utilizing its fixed assets to generate sales over time.
2. Total Asset Turnover:
- The total asset turnover ratio shows a significant increase in 2023 to 0.84, compared to 0.68 in 2022. This signifies that Kellanova is generating sales revenue amounting to 84% of its total assets, which is a positive sign of efficiency in asset utilization.
- The total asset turnover has shown fluctuations in the past, but the current ratio in 2023 is the highest over the past five years. This indicates that Kellanova has improved its overall efficiency in utilizing both fixed and current assets to generate sales.
In conclusion, Kellanova has shown improvement in its long-term activity ratios, particularly in utilizing its assets to generate sales revenue. The stability and improvement in both fixed asset turnover and total asset turnover ratios demonstrate the company's efficiency and effectiveness in managing its assets for revenue generation.