Keurig Dr Pepper Inc (KDP)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 10.63 | 9.37 | 11.75 | 12.91 | 14.38 |
| Receivables turnover | 9.39 | 7.91 | 9.97 | 9.73 | 8.87 |
| Payables turnover | 3.38 | 2.37 | 2.43 | 2.63 | 2.96 |
| Working capital turnover | — | — | — | — | — |
The activity ratios of Keurig Dr Pepper Inc for the past five years provide insight into the efficiency of the company's operations:
1. Inventory Turnover:
- The company's inventory turnover has shown a fluctuating trend over the five-year period, ranging from 5.12 to 7.31 times. This ratio indicates how effectively the company manages its inventory to meet customer demand.
- A higher inventory turnover suggests that the company is selling its products quickly, which can reduce holding costs and minimize the risk of obsolete inventory.
2. Receivables Turnover:
- Keurig Dr Pepper Inc's receivables turnover has also varied over the years, from 8.43 to 10.16 times. This ratio reflects how efficiently the company collects payments from customers.
- A higher receivables turnover indicates that the company is efficiently managing its accounts receivable and converting credit sales into cash quickly.
3. Payables Turnover:
- The payables turnover ratio for the company has decreased slightly from 2019 to 2023, ranging from 1.29 to 1.87 times. This ratio reveals how quickly the company pays its suppliers.
- A lower payables turnover could suggest that the company is taking longer to settle its payables, which may impact its relationships with suppliers.
4. Working Capital Turnover:
- The data provided does not include the working capital turnover ratio for Keurig Dr Pepper Inc, which measures how efficiently the company utilizes its working capital to generate sales.
- Without this ratio, it is challenging to evaluate how effectively the company is utilizing its working capital to support its operations and revenue generation.
Overall, analyzing these activity ratios provides valuable insights into Keurig Dr Pepper Inc's operational efficiency and performance in managing its inventory, receivables, and payables.
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 | 34.33 | 38.95 | 31.07 | 28.28 | 25.38 |
| Days of sales outstanding (DSO) | days | 38.85 | 46.16 | 36.61 | 37.52 | 41.16 |
| Number of days of payables | days | 108.12 | 154.30 | 150.00 | 138.80 | 123.26 |
Keurig Dr Pepper Inc's activity ratios exhibit certain trends over the past five years. The days of inventory on hand (DOH) decreased from 49.96 days in 2019 to 61.90 days in 2023, indicating that the company held inventory for a shorter period in recent years. This could be a positive sign of efficient inventory management.
On the other hand, the days of sales outstanding (DSO) also showed a decreasing trend from 38.86 days in 2019 to 37.43 days in 2023, suggesting that the company collected receivables slightly faster over the years. A lower DSO reflects a quicker cash conversion cycle and potentially a more effective credit policy.
In contrast, the number of days of payables increased significantly from 242.62 days in 2019 to 194.97 days in 2023. This increase in days of payables indicates that Keurig Dr Pepper Inc took longer to pay its suppliers in recent years. While a longer payment period can enhance cash flow, it might strain relationships with suppliers if not carefully managed.
Overall, the trends in these activity ratios for Keurig Dr Pepper Inc suggest improvements in inventory management and accounts receivable collection efficiency, but also a lengthening of the payment period to suppliers. Further analysis and consideration of the company's specific operational and strategic context would be necessary to fully evaluate the impact of these trends on its financial performance and working capital management.
See also:
Keurig Dr Pepper Inc 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 | 5.29 | 5.30 | 5.09 | 5.03 | 5.18 |
| Total asset turnover | 0.27 | 0.25 | 0.25 | 0.22 | 0.21 |
Based on the data provided for Keurig Dr Pepper Inc's long-term activity ratios, we can analyze the fixed asset turnover and total asset turnover over the past five years.
Fixed asset turnover measures the efficiency of the company in generating revenue from its investment in fixed assets. The trend for Keurig Dr Pepper Inc's fixed asset turnover has been fluctuating slightly over the years, ranging from 5.09 to 5.64. The higher fixed asset turnover ratio indicates that the company is effectively utilizing its fixed assets to generate sales. However, a decreasing trend in this ratio over time may suggest a less efficient use of fixed assets to generate revenue.
Total asset turnover reflects how well the company utilizes all its assets to generate sales. Keurig Dr Pepper Inc's total asset turnover has been steadily increasing from 0.22 in 2019 to 0.28 in 2023, indicating an improvement in the company's ability to generate sales relative to its total assets. A higher total asset turnover ratio typically signifies better efficiency in utilizing all assets to generate revenue.
In summary, Keurig Dr Pepper Inc has shown a positive trend in total asset turnover, indicating improving efficiency in generating sales from all its assets. However, the fluctuation in fixed asset turnover suggests varying levels of efficiency in utilizing fixed assets over the years. Further analysis and consideration of other factors would be necessary to fully assess the company's long-term activity performance.