Kraft Heinz Co (KHC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 8.29 | 6.39 | 6.58 | 8.90 | 9.94 |
| Receivables turnover | 12.01 | 12.15 | 12.14 | 11.87 | 11.94 |
| Payables turnover | 6.68 | 4.99 | 4.95 | 5.11 | 6.41 |
| Working capital turnover | 64.17 | — | — | — | 8.92 |
Based on the data provided for Kraft Heinz Co, the activity ratios can provide insights into how efficiently the company is managing its assets and liabilities.
1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced within a specific period.
- Kraft Heinz Co's inventory turnover has shown a decreasing trend from 2020 to 2024, indicating that it took longer to sell its inventory over the years. This might suggest issues with inventory management or changing demand patterns.
2. Receivables Turnover:
- The receivables turnover ratio reflects how quickly a company collects payments from its customers.
- Kraft Heinz Co's receivables turnover has remained relatively stable over the years, indicating that the company has been efficient in collecting payments from its customers.
3. Payables Turnover:
- The payables turnover ratio shows how quickly a company pays its suppliers.
- Kraft Heinz Co's payables turnover decreased from 2020 to 2022, suggesting that the company took longer to pay its suppliers. However, it increased in 2024, possibly indicating improved payment practices.
4. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently a company is using its working capital to generate sales.
- Kraft Heinz Co's working capital turnover was not available for the years 2021 to 2023, but in 2020 and 2024, the ratio was significantly high in 2024, indicating a strong ability to generate sales relative to its working capital.
Overall, these activity ratios provide valuable insights into Kraft Heinz Co's operational efficiency and management of assets and liabilities over the years. It is essential for the company to monitor these ratios consistently to identify trends and make informed decisions to optimize its resources.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 44.04 | 57.16 | 55.48 | 41.01 | 36.71 |
| Days of sales outstanding (DSO) | days | 30.38 | 30.03 | 30.06 | 30.75 | 30.56 |
| Number of days of payables | days | 54.63 | 73.19 | 73.67 | 71.43 | 56.98 |
The activity ratios of Kraft Heinz Co provide insights into how efficiently the company manages its inventory, receivables, and payables.
1. Days of Inventory on Hand (DOH):
- Kraft Heinz Co shows an increase in the days of inventory on hand from 36.71 days as of December 31, 2020, to 57.16 days as of December 31, 2023, before decreasing slightly to 44.04 days by December 31, 2024.
- The increasing trend in DOH suggests a longer period for the company to sell its inventory, which could indicate potential issues with inventory management or declining sales.
2. Days of Sales Outstanding (DSO):
- The days of sales outstanding remained relatively stable over the years, ranging from 30.03 days as of December 31, 2023, to 30.75 days as of December 31, 2021.
- A consistent DSO indicates that Kraft Heinz Co has been efficient in collecting payments from customers, maintaining a steady accounts receivable turnover.
3. Number of Days of Payables:
- The number of days of payables for Kraft Heinz Co increased from 56.98 days as of December 31, 2020, to 73.67 days by December 31, 2022, before declining to 54.63 days as of December 31, 2024.
- The fluctuating trend in payables days could indicate changes in the company's payment terms with suppliers or adjustments in working capital management.
Overall, the analysis of these activity ratios for Kraft Heinz Co suggests that while the company has shown efficiency in managing receivables, there may be some challenges in inventory management and payables that could impact its overall working capital and operational effectiveness.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.68 | 3.67 | 3.89 | 3.48 | 3.69 |
| Total asset turnover | 0.29 | 0.28 | 0.28 | 0.25 | 0.25 |
The fixed asset turnover ratio measures how efficiently a company generates sales revenue from its investment in fixed assets. For Kraft Heinz Co, the trend in fixed asset turnover over the years shows some fluctuations but overall remains relatively stable. In 2022, there was a slight increase to 3.89, indicating that the company generated $3.89 in sales for every dollar invested in fixed assets, which was higher compared to 2021. However, this ratio slightly decreased in 2023 and 2024 to 3.67 and 3.68, respectively, suggesting a decrease in the efficiency of utilizing fixed assets to generate sales revenue during these years.
On the other hand, the total asset turnover ratio reflects the company's ability to generate sales from its total assets. Kraft Heinz Co's total asset turnover ratio has shown a consistent increase over the years, indicating an improvement in asset utilization efficiency. The ratio stood at 0.25 in both 2020 and 2021, but it gradually increased to 0.29 by the end of 2024. This increase suggests that the company was able to generate more revenue per dollar of total assets invested, highlighting an improvement in overall asset management efficiency.
Overall, the analysis of Kraft Heinz Co's long-term activity ratios indicates that while there may have been some fluctuations in the efficiency of utilizing fixed assets to generate sales revenue, the company has shown a positive trend in effectively utilizing its total assets to generate sales over the years.