WK Kellogg Co (KLG)

Short-term

Turnover ratios

1. Inventory Turnover:
WK Kellogg Co's inventory turnover ratio measures how efficiently the company is managing its inventory. The data provided shows that the company's inventory turnover ratios for June, September, and December 2024 were 7.20, 7.70, and 7.36 respectively. This indicates that, on average, the company sold and replaced its inventory approximately 7 to 8 times during each period. A higher inventory turnover ratio generally suggests that the company is effectively managing its stock levels and converting inventory into sales.

2. Receivables Turnover:
The receivables turnover ratio reflects how efficiently WK Kellogg Co is collecting payments from its customers. The data reveals that the company's receivables turnover ratios for June, September, and December 2024 were 12.43, 13.54, and 13.59 respectively. This indicates that the company collected its outstanding receivables approximately 12 to 14 times during each period. A higher receivables turnover ratio suggests that the company is efficiently managing its credit sales and collecting payments in a timely manner.

3. Payables Turnover:
The payables turnover ratio measures how quickly WK Kellogg Co pays its suppliers for goods and services received on credit. The data shows that the company's payables turnover ratios for June, September, and December 2024 were 4.82, 5.14, and 5.07 respectively. This implies that, on average, the company paid its trade payables approximately 4.8 to 5.2 times during each period. A higher payables turnover ratio indicates that the company is making prompt payments to its suppliers, which can improve relationships and potentially lead to more favorable credit terms.

4. Working Capital Turnover:
Unfortunately, the data does not provide information on the working capital turnover ratio for WK Kellogg Co during the specified periods. This ratio measures how efficiently the company is utilizing its working capital to generate sales revenue. Without this data, it is challenging to assess the company's effectiveness in utilizing its working capital.

Overall, based on the provided activity ratios, WK Kellogg Co appears to be efficiently managing its inventory, collecting receivables, and paying its suppliers. An improvement in these ratios over time generally indicates effective working capital management and operational efficiency.

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Average number of days

WK Kellogg Co's activity ratios for the period show that the days of inventory on hand decreased from 50.71 days in June to 49.57 days in December 2024, indicating that the company was able to manage its inventory more effectively during the year.

Additionally, the days of sales outstanding (DSO) decreased from 29.36 days in June to 26.86 days in December 2024, which suggests that the company's accounts receivable turnover improved, enabling it to collect payments from customers more efficiently.

On the other hand, the number of days of payables increased slightly from 75.79 days in June to 72.05 days in December 2024. This could indicate that WK Kellogg Co took slightly longer to pay its suppliers during the latter part of the year.

Overall, WK Kellogg Co's activity ratios reflect improvements in inventory management and accounts receivable turnover, although there was a slight increase in the number of days of payables towards the end of the year.

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Long-term

WK Kellogg Co's long-term activity ratios show a stable performance over the last three quarters. The Fixed Asset Turnover ratio declined slightly from 3.61 in June 2024 to 3.44 in December 2024, indicating that the company generated $3.44 in sales for every dollar invested in fixed assets by the end of the year. This could suggest a slight decrease in the efficiency of utilizing fixed assets to generate revenue.

Similarly, the Total Asset Turnover ratio remained relatively constant at around 1.42 in the same period, showing that the company generated $1.42 in sales for every dollar invested in total assets. While this ratio decreased to 1.38 by the end of December 2024, it suggests that WK Kellogg Co effectively utilized its total assets to generate revenue throughout the year.

Overall, WK Kellogg Co's long-term activity ratios indicate a consistent performance in efficiently leveraging both fixed and total assets to generate sales, with a slight decline in fixed asset turnover observed towards the end of the year.