Yum! Brands Inc (YUM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | 7.16 | 9.88 | — |
| Receivables turnover | 9.10 | 9.35 | 10.06 | 10.19 | 9.93 |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 12.54 | 21.31 | — | 56.27 | 403.71 |
1. Inventory Turnover Ratio:
- Yum! Brands Inc's inventory turnover ratio has decreased from 9.88 in 2021 to 7.16 in 2022. This indicates that the company is selling its inventory less frequently in 2022 compared to the previous year, which could be due to various factors such as changes in consumer demand or supply chain disruptions.
2. Receivables Turnover Ratio:
- Yum! Brands Inc's receivables turnover ratio has shown a slight decline from 10.19 in 2021 to 9.10 in 2024. A lower receivables turnover ratio may suggest that the company is taking more time to collect payments from customers, which could lead to potential liquidity issues if not managed effectively.
3. Payables Turnover Ratio:
- Yum! Brands Inc's payables turnover ratio is not provided in the data, indicating that information related to how quickly the company is paying its suppliers is not available for analysis.
4. Working Capital Turnover Ratio:
- The working capital turnover ratio for Yum! Brands Inc has shown significant variation over the years, with a notable decrease from 403.71 in 2020 to 12.54 in 2024. This sharp decline could imply difficulties in efficiently utilizing working capital to generate sales. It is important for the company to manage its working capital effectively to ensure sustainable operations and growth.
In summary, while the inventory turnover and receivables turnover ratios provide insights into Yum! Brands' operational efficiency and liquidity management, the lack of data for payables turnover limits a comprehensive analysis of the company's working capital management. It is essential for the company to closely monitor these ratios and take necessary actions to optimize its working capital and improve overall financial performance.
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 | — | — | 50.99 | 36.95 | — |
| Days of sales outstanding (DSO) | days | 40.13 | 39.05 | 36.28 | 35.81 | 36.75 |
| Number of days of payables | days | — | — | — | — | — |
The activity ratios for Yum! Brands Inc indicate the efficiency of the company in managing its inventory, accounts receivable, and accounts payable during the specified periods.
1. Days of Inventory on Hand (DOH):
- December 31, 2020: No data available.
- December 31, 2021: Yum! Brands held inventory for approximately 36.95 days.
- December 31, 2022: The days of inventory on hand increased to 50.99 days.
- December 31, 2023: No data available.
- December 31, 2024: No data available.
The increase in days of inventory on hand from 2021 to 2022 may indicate a potential slowdown in inventory turnover, which could tie up capital and increase storage costs.
2. Days of Sales Outstanding (DSO):
- December 31, 2020: Yum! Brands took around 36.75 days to collect its accounts receivable.
- December 31, 2021: The DSO decreased slightly to 35.81 days.
- December 31, 2022: The DSO remained relatively stable at 36.28 days.
- December 31, 2023: The days of sales outstanding increased to 39.05 days.
- December 31, 2024: DSO further increased to 40.13 days.
The increasing trend in DSO from 2021 to 2024 suggests that the company is taking longer to collect its receivables, which could affect its liquidity and cash flow.
3. Number of Days of Payables:
- December 31, 2020 to December 31, 2024: No data available for the days of payables.
The lack of data on the days of payables makes it challenging to assess Yum! Brands' efficiency in managing its accounts payable.
Overall, Yum! Brands Inc experienced fluctuations in its activity ratios over the years, highlighting potential areas for improvement in inventory management and accounts receivable collection. Monitoring these ratios can help the company enhance its operational efficiency and financial performance.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.79 | 5.91 | 5.84 | 5.45 | 4.58 |
| Total asset turnover | 1.12 | 1.14 | 1.17 | 1.10 | 0.97 |
Yum! Brands Inc's long-term activity ratios indicate the efficiency of the company in utilizing its assets to generate sales. The fixed asset turnover ratio has shown a positive trend over the years, increasing from 4.58 in 2020 to 5.79 in 2024. This suggests that the company has been more efficient in utilizing its fixed assets to generate revenue.
Similarly, the total asset turnover ratio has also exhibited an uptrend, rising from 0.97 in 2020 to 1.12 in 2024. This implies that Yum! Brands Inc has been able to generate more sales for each dollar invested in total assets.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios indicates that Yum! Brands Inc has been improving its asset utilization efficiency over the years, which is a positive sign for the company's long-term operational performance.