Yum! Brands Inc (YUM)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Inventory turnover	—	—	—	—	—	—	—	—	7.16	—	—	—	—	—	—	—	—	—	—	—
Receivables turnover	9.10	9.47	9.69	10.25	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
Payables turnover	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Working capital turnover	12.54	16.45	14.24	11.99	21.31	35.12	249.68	—	—	19.13	27.15	123.06	56.27	9.10	—	—	403.71	11.75	5.95	11.42

The activity ratios for Yum! Brands Inc provide insights into the efficiency of the company's operations in managing inventory, receivables, payables, and working capital.

1. Inventory Turnover: The company had an inventory turnover ratio of 7.16 as of December 31, 2022. This indicates that inventory was turning over approximately 7.16 times during the year, showing good management in efficiently selling and replenishing inventory.

2. Receivables Turnover: The receivables turnover ratio ranged from 9.10 to 11.96 over the reported period. A higher ratio suggests that Yum! Brands was able to collect outstanding receivables more frequently, indicating effective credit management and collection practices.

3. Payables Turnover: The payables turnover data was not available, indicating that information on how quickly Yum! Brands pays its creditors was not provided. A higher turnover ratio would suggest the company is paying its bills more quickly.

4. Working Capital Turnover: The working capital turnover ratio varied significantly across the periods, with values ranging from 5.95 to 403.71. A higher turnover ratio indicates that Yum! Brands was effectively using its working capital to generate sales. The very high ratio of 403.71 as of December 31, 2020, could have been due to specific business events like a change in business model or financial strategy.

Overall, analysing activity ratios provides important insights into how efficiently Yum! Brands managed its assets and liabilities to generate sales and revenue during the reported periods.

Average number of days

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	—	—	50.99	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	40.13	38.56	37.66	35.62	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
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

The activity ratios of Yum! Brands Inc, based on the provided data, indicate the following trends:

1. Days of Inventory on Hand (DOH): Yum! Brands had 50.99 days of inventory on hand as of December 31, 2022. This represents the number of days it takes for the company to sell its entire inventory. A lower DOH is generally preferred as it indicates efficient inventory management.

2. Days of Sales Outstanding (DSO): The days of sales outstanding for Yum! Brands have shown some fluctuations over the years, with an increasing trend observed towards the end of the period. DSO is a measure of how long it takes for the company to collect payment after making a sale. A higher DSO may indicate potential issues with collecting receivables in a timely manner.

3. Number of Days of Payables: The data does not provide information on the number of days of payables for Yum! Brands, which is crucial for analyzing the company's ability to manage its payables effectively. A higher number of days of payables may indicate that the company is taking longer to pay its suppliers.

Overall, the analysis of these activity ratios suggests that Yum! Brands may need to focus on managing its inventory efficiently, improving its collection of receivables, and potentially optimizing its payment terms with suppliers to enhance its overall working capital management.

Long-term

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Fixed asset turnover	5.79	5.56	5.59	5.91	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
Total asset turnover	1.12	1.12	1.11	1.13	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

Yum! Brands Inc's fixed asset turnover ratio has shown an increasing trend over the years, indicating the company is making more efficient use of its fixed assets to generate sales. The ratio increased from 4.48 in March 2020 to 5.79 in December 2024, with some fluctuations in between. This suggests that Yum! Brands has been able to generate more sales relative to its investment in fixed assets.

In contrast, the total asset turnover ratio for Yum! Brands fluctuated over the period under review but generally showed an increasing trend. The ratio started at 0.92 in March 2020, reaching 1.12 by December 2024. This shows that the company has been successful in generating more sales revenue for each dollar invested in total assets.

Overall, based on the trend in these long-term activity ratios, Yum! Brands Inc appears to be effectively managing its assets to generate sales and improve operational efficiency over time.