Yum! Brands Inc (YUM)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,076,000 | 6,842,000 | 6,584,000 | 5,652,000 | 5,597,000 |
| Receivables | US$ in thousands | 757,000 | 680,000 | 646,000 | 569,000 | 623,000 |
| Receivables turnover | 9.35 | 10.06 | 10.19 | 9.93 | 8.98 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $7,076,000K ÷ $757,000K
= 9.35
The receivables turnover ratio measures the efficiency with which a company collects its accounts receivable during a specific period. A higher turnover ratio is generally favorable as it indicates that the company is collecting receivables more quickly.
Analyzing Yum Brands Inc.'s receivables turnover over the past five years, we observe a fluctuating trend. The ratio decreased from 8.98 in 2019 to 9.93 in 2020, then increased to 10.19 in 2021 before slightly declining to 10.06 in 2022 and further dropping to 9.35 in 2023.
Generally, a receivables turnover ratio above 1 indicates that the company is efficient in collecting its accounts receivable. In the case of Yum Brands Inc., the ratios have consistently been well above this threshold, signifying that the company has been effective in managing and collecting its receivables over the years.
The slight decline in the receivables turnover ratio from 2022 to 2023 may suggest a potential slowdown in the collection of receivables during the most recent period. It is essential for Yum Brands to monitor this trend to ensure efficient management of its accounts receivable and maintain healthy cash flows.
Overall, while Yum Brands Inc. has shown strong efficiency in collecting its receivables in recent years, management should continue to focus on optimizing this process to sustain healthy liquidity and working capital management.
Peer comparison
Dec 31, 2023