Kroger Company (KR)

Short-term

Turnover ratios

Based on the data provided, we can analyze Kroger Company's activity ratios as follows:

1. Inventory Turnover: Kroger's inventory turnover ratio has shown a fluctuating trend over the period. It increased from 15.43 in April 2022 to a peak of 18.32 in July 2024. A higher turnover ratio indicates that Kroger is selling its inventory more efficiently.

2. Receivables Turnover: The receivables turnover ratio indicates how efficiently Kroger is collecting on its credit sales. The data shows that Kroger's receivables turnover has varied significantly, with values ranging from 61.55 to 90.43. Higher values suggest that Kroger is collecting its receivables at a faster rate.

3. Payables Turnover: The payables turnover ratio reflects how quickly Kroger is paying its suppliers. Kroger's payables turnover has also fluctuated, indicating changes in the company's payment practices. It increased from 11.42 in January 2023 to 16.20 in August 2023, suggesting potential changes in payment terms.

4. Working Capital Turnover: This ratio measures how efficiently Kroger is utilizing its working capital to generate sales revenue. The data indicates that Kroger had a working capital turnover ratio of 17.12 in October 2024. A higher turnover ratio implies that Kroger is efficiently using its working capital to support its operations and generate revenue.

Overall, analyzing these activity ratios provides insights into how effectively Kroger manages its inventory, receivables, payables, and working capital to support its business operations and financial performance.

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Average number of days

Based on the provided data for Kroger Company, we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH):
- The DOH decreased from 23.65 days on April 30, 2022, to 19.93 days on July 31, 2024. This indicates that Kroger has been managing its inventory more efficiently over the period, turning its inventory into sales more quickly.
- The lowest DOH was recorded on August 12, 2023, at 20.12 days, suggesting a peak efficiency in managing inventory levels.
- Overall, the trend shows a fluctuation in DOH over the years, with a general decrease in the days of inventory on hand, indicating better inventory management by Kroger.

2. Days of Sales Outstanding (DSO):
- The DSO fluctuated over the years, with some periods showing no data available.
- On February 3, 2024, the DSO was at its highest at 5.50 days, indicating that Kroger took longer to collect its accounts receivable during that period.
- The available data indicates that Kroger has been relatively efficient in collecting receivables, with some periods showing low DSO values.

3. Number of Days of Payables:
- The number of days of payables saw fluctuations over the years, with no data available for several periods.
- On February 3, 2024, the number of days of payables was at its highest at 33.75 days, indicating that Kroger took longer to pay its suppliers during that period.
- On August 12, 2023, the number of days of payables was at its lowest at 22.53 days, suggesting a more efficient payment cycle during that period.

In conclusion, Kroger has shown improvements in inventory management efficiency with a decrease in DOH over the years. The company has also demonstrated some efficiency in collecting receivables, although payables management has shown fluctuations. These activity ratios provide insights into Kroger's operational effectiveness and efficiency in managing its working capital.

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Long-term

Long-term activity ratios help assess how efficiently a company is utilizing its assets to generate sales. Two important ratios in this category are Fixed Asset Turnover and Total Asset Turnover.

Based on the data provided for Kroger Company, the Fixed Asset Turnover ratio has seen fluctuations over the reported periods. This ratio indicates how well Kroger is using its fixed assets to generate revenue. A higher ratio is generally favorable as it suggests that fixed assets are being efficiently utilized to generate sales. Kroger's Fixed Asset Turnover ratio ranged from 4.59 to 6.56 during the periods reported, with an average value around 5.5.

On the other hand, the Total Asset Turnover ratio provides insights into how effectively Kroger is using all its assets to generate sales. This ratio considers both fixed and current assets in relation to sales. Kroger's Total Asset Turnover ratio varied between 2.40 to 3.25 over the reported periods, with an average value approximately around 3.0.

Overall, the fluctuating values of Fixed Asset Turnover and Total Asset Turnover ratios suggest that Kroger's efficiency in utilizing its assets to generate revenue has varied over time. Further analysis and comparison with industry benchmarks would be beneficial to assess Kroger's performance in this aspect accurately.