Yum! Brands Inc (YUM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 7.16 | 9.88 | — | — |
| Receivables turnover | 9.35 | 10.06 | 10.19 | 9.93 | 8.98 |
| Payables turnover | — | — | — | — | 14.30 |
| Working capital turnover | 21.31 | — | 56.27 | 403.71 | — |
Based on the activity ratios provided, we can analyze Yum Brands Inc.'s efficiency in managing its inventory, receivables, payables, and working capital over the past five years.
1. Inventory Turnover:
Unfortunately, inventory turnover data is not available for Yum Brands Inc. for all the years provided. However, a higher inventory turnover ratio generally indicates that the company is selling inventory quickly and efficiently.
2. Receivables Turnover:
Yum Brands Inc. has shown a consistent receivables turnover ratio over the past five years. The decreasing trend from 2019 to 2020 was followed by relatively stable figures in subsequent years. This indicates that the company is collecting its receivables efficiently and faster compared to previous years.
3. Payables Turnover:
Yum Brands Inc. has shown a slight variation in payables turnover over the past five years. The ratio has generally been in the range of 7 to 7.68. A higher payables turnover ratio suggests that the company is paying its suppliers in a timely manner.
4. Working Capital Turnover:
The working capital turnover ratio for Yum Brands Inc. has fluctuated significantly over the past five years, with a notable spike in 2020. This may indicate changes in the company's working capital management strategies or operational efficiency during that period.
In conclusion, Yum Brands Inc. has demonstrated efficiency in managing its receivables and payables turnover ratios, which are important indicators of operational efficiency and liquidity management. However, the lack of inventory turnover data limits a comprehensive assessment of the company's inventory management efficiency.
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 | — | 50.99 | 36.95 | — | — |
| Days of sales outstanding (DSO) | days | 39.05 | 36.28 | 35.81 | 36.75 | 40.63 |
| Number of days of payables | days | — | — | — | — | 25.52 |
Activity ratios provide insight into how efficiently a company manages its resources and assets to generate sales. Let's analyze Yum Brands Inc.'s activity ratios based on the provided data:
1. Days of Inventory on Hand (DOH) is not available for the given years. This ratio measures how many days it takes for a company to turn its inventory into sales. A lower DOH indicates efficient inventory management and faster turnover of goods.
2. Days of Sales Outstanding (DSO) demonstrates how long it takes for the company to collect payments from customers after a sale. Yum Brands Inc. showed a decreasing trend in DSO from 40.63 days in 2019 to 39.05 days in 2023, indicating more efficient accounts receivable management.
3. Number of Days of Payables indicates how long a company takes to pay its suppliers. Yum Brands Inc. managed to decrease its payables days from 51.13 days in 2019 to 47.53 days in 2023, implying that the company is taking longer to pay its creditors.
Overall, Yum Brands Inc. has shown improvements in its accounts receivable collection and payable management, indicating enhanced efficiency in converting inventory into sales and managing cash flow. These trends suggest that the company is effectively managing its working capital and optimizing its operational activities.
See also:
Yum! Brands 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 | 5.91 | 5.84 | 5.45 | 4.58 | 4.78 |
| Total asset turnover | 1.14 | 1.17 | 1.10 | 0.97 | 1.07 |
Yum Brands Inc.'s fixed asset turnover has been relatively stable over the past five years, ranging from 4.58 to 5.91. This indicates that the company generates between $4.58 and $5.91 in sales for every dollar invested in fixed assets. The increasing trend in fixed asset turnover suggests that the company has been utilizing its fixed assets more efficiently over time.
Conversely, the total asset turnover ratio for Yum Brands Inc. has fluctuated between 0.97 and 1.17 during the same period. This ratio measures the company's ability to generate revenue from its total assets. The decreasing trend in total asset turnover from 2019 to 2021 suggests that the company may not be efficiently using its total assets to generate sales. However, there was a slight improvement in 2022 and 2023.
Overall, while Yum Brands Inc. has been effectively utilizing its fixed assets, there are fluctuations in the efficiency of utilizing total assets for generating sales. Management may need to further analyze and optimize the use of total assets to improve overall efficiency and profitability.