Yum! Brands Inc (YUM)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	—	—	—	—	7.16	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Receivables turnover	9.35	10.91	10.66	11.16	10.06	11.59	11.17	11.76	10.19	11.75	11.96	11.56	9.93	10.73	10.37	10.97	8.98	10.36	10.30	10.26
Payables turnover	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	14.29	—	—	—
Working capital turnover	21.31	35.12	249.68	—	—	19.13	27.15	123.06	56.27	9.10	—	—	403.71	11.75	5.95	11.42	—	9.73	—	—

The activity ratios for Yum Brands Inc. provide insight into how efficiently the company manages its assets and liabilities to generate sales.

1. Receivables Turnover: This ratio indicates how many times a company collects its accounts receivable during a period. Yum Brands' receivables turnover has been above 10 for the past eight quarters, showing that the company efficiently collects payments from its customers. A higher turnover ratio suggests quicker collection, which is favorable.

2. Payables Turnover: Though data is incomplete, the payables turnover ratio measures how quickly a company pays its suppliers. Yum Brands had a payables turnover of 7.18 in Q4 2022, indicating that the company takes about 50 days (365/7.18) to pay its outstanding bills. A higher turnover could imply more efficient management of payables.

3. Working Capital Turnover: This ratio demonstrates how effectively Yum Brands utilizes its working capital to generate revenue. The significant spike in Q2 2023 to 249.68 suggests a substantial increase in sales relative to working capital investment. A high turnover ratio indicates efficient utilization of working capital to drive revenue, reflecting positively on the company's operational efficiency.

In conclusion, Yum Brands Inc. has shown efficiency in managing its receivables, with consistent turnover above 10. Although data for payables turnover is limited, the working capital turnover ratio indicates a remarkable improvement in Q2 2023. These activity ratios collectively suggest that Yum Brands is effectively managing its assets and liabilities to drive revenue growth.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	—	—	—	—	50.99	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	39.05	33.45	34.25	32.71	36.28	31.48	32.68	31.03	35.81	31.07	30.52	31.56	36.75	34.00	35.21	33.27	40.63	35.22	35.42	35.58
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	25.53	—	—	—

Days of Inventory on Hand (DOH) for Yum Brands Inc. was not provided in the table for all the quarters. This ratio indicates how many days, on average, it takes for the company to sell its inventory. In general, a lower number of days is preferred as it suggests efficient inventory management.

Days of Sales Outstanding (DSO) for Yum Brands Inc. ranged from 31.48 to 39.05 days during the quarters presented in the table. DSO measures how long it takes for the company to collect its accounts receivable. A lower DSO indicates that the company is collecting its receivables quickly, which is usually favorable.

The Number of Days of Payables for Yum Brands Inc. varied from 47.53 to 50.83 days in the quarters shown. This ratio illustrates how long it takes the company to pay its suppliers. A higher number of days implies that the company is taking longer to pay its payables, which may indicate favorable cash flow management.

Overall, Yum Brands Inc. maintained relatively consistent DSO and Payables Days across the quarters, but the lack of information on DOH limits a comprehensive assessment of the company's activity ratios.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	5.91	6.10	6.02	5.97	5.84	6.03	5.60	5.63	5.45	5.40	5.18	4.84	4.58	4.56	4.34	4.48	4.78	4.74	4.62	4.60
Total asset turnover	1.14	1.16	1.20	1.21	1.17	1.16	1.15	1.14	1.10	1.00	1.11	1.06	0.97	0.92	0.86	0.92	1.07	1.09	1.18	1.17

Long-term activity ratios help assess a company's efficiency in managing its fixed and total assets to generate revenue.

Yum Brands Inc.'s fixed asset turnover has been relatively stable over the past eight quarters, ranging between 5.60 and 6.10. This indicates that the company is effectively utilizing its fixed assets to generate revenue, with an average of around 6 times per year.

In contrast, the total asset turnover ratio has shown slight fluctuations over the same period, with values ranging from 1.14 to 1.21. This suggests that the company is efficiently using its total assets to generate sales, with an average turnover of approximately 1.16 times per year.

Overall, both ratios suggest that Yum Brands Inc. is effectively managing its assets to drive revenue growth, with the fixed asset turnover indicating a particularly strong performance in efficiently using its fixed assets to generate sales.