Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Short-term Activity Ratios (Summary)
Reynolds American Inc., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
- Inventory Turnover
- The inventory turnover ratio shows a declining trend from 4.39 in March 2012 to a low of 2.45 in September 2015, indicating that inventory is being turned over less frequently. However, a partial recovery is observed afterwards with the ratio rising to 3.06 by March 2017. This suggests some improvement in inventory management or sales efficiency in the latter periods.
- Receivables Turnover
- The receivables turnover ratio exhibits considerable volatility over the observed period. Initially, it decreased from 140.54 in March 2012 to 86.3 in September 2015, implying slower collection of receivables. A significant spike follows, reaching 454.27 in March 2016 before stabilizing somewhat at 306 by March 2017. This indicates inconsistent collection practices or changes in credit policies that temporarily enhanced collection efficiency.
- Payables Turnover
- Payables turnover fluctuates moderately, moving between approximately 20 and 36 over the period. No clear upward or downward trend is discernible, but oscillations suggest varying payment speeds to suppliers. Peaks in late 2015 and mid-2016 (above 30) could indicate faster payment intervals during those quarters.
- Working Capital Turnover
- Working capital turnover shows an overall increase with high volatility. A sharp rise is noticed from 14.55 in December 2012 to a peak at 88.41 in September 2014, then missing data interrupts continuity. Another notable peak occurs at 132.75 in June 2016. These spikes suggest periods of highly efficient utilization of working capital, although the irregular data points limit the ability to confirm consistent trends.
- Average Inventory Processing Period
- The average inventory processing period generally lengthens, increasing from 83 days in March 2012 to a peak of 149 days in September 2015. The period then decreases slightly, settling around 119 days by March 2017. This trend indicates a slower pace in converting inventory into sales over time, with a marginal improvement in the most recent periods.
- Average Receivable Collection Period
- This period remains stable and relatively short, mostly around 2 to 4 days, with slight improvements in recent years dropping to 1 day by March 2017. This consistency at a low number reflects strong credit control and rapid collection of receivables throughout the timeline.
- Operating Cycle
- The operating cycle gradually extends over the period, moving from 86 days in March 2012 to around 120 days near March 2017. The increase is mainly due to a longer inventory processing period, as the receivable collection period remains stable. This elongation suggests that overall cash is tied up for a longer duration in operations.
- Average Payables Payment Period
- The average payables payment period fluctuates between roughly 10 and 18 days without a clear directional trend. These variations suggest inconsistent timing in settling payables, which could be a strategic decision to optimize cash outflows or reflect supplier negotiations.
- Cash Conversion Cycle
- The cash conversion cycle generally lengthens from 70 days in March 2012 to a peak of 137 days in September 2015 before slightly declining to around 107 days by March 2017. The rising trend indicates an increasing period between paying suppliers and collecting cash from customers, representing a potential strain on liquidity that improves somewhat toward the end of the timeline.
Turnover Ratios
Average No. Days
Inventory Turnover
Reynolds American Inc., inventory turnover calculation (quarterly data)
| Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Cost of products sold, excludes excise taxes | ||||||||||||||||||||||||||||
| Inventories | ||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Inventory turnover1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Coca-Cola Co. | ||||||||||||||||||||||||||||
| Mondelēz International Inc. | ||||||||||||||||||||||||||||
| PepsiCo Inc. | ||||||||||||||||||||||||||||
| Philip Morris International Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q1 2017 Calculation
Inventory turnover
= (Cost of products sold, excludes excise taxesQ1 2017
+ Cost of products sold, excludes excise taxesQ4 2016
+ Cost of products sold, excludes excise taxesQ3 2016
+ Cost of products sold, excludes excise taxesQ2 2016)
÷ Inventories
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Cost of Products Sold (Excluding Excise Taxes)
- The cost of products sold exhibits a high degree of variability over the examined periods. Initially, values ranged from 994 to 1133 million USD during 2012, followed by a sharp decline in early 2013 to 694 million USD. Subsequently, a recovery trend is observed with values generally increasing through 2013 and 2014, peaking at 1404 million USD in the third quarter of 2015. Thereafter, a decline ensues with fluctuations; by the first quarter of 2017, the cost settled around 1199 million USD. This pattern suggests cyclical variations potentially influenced by seasonality, operational adjustments, or market conditions impacting production costs.
- Inventories
- Inventory levels show a gradual upward trend from 2012 through 2015, starting at 972 million USD in March 2012 and reaching a peak of approximately 1734 million USD in December 2015. Post-peak, inventory values display slight variances but generally maintain elevated levels around 1600 million USD through early 2017. This upward trend in inventories indicates accumulation either due to increased production, lower sales rates, or strategic stockpiling in anticipation of demand.
- Inventory Turnover Ratio
- Inventory turnover data, available from March 2013 onward, reveals a declining trend initially, dropping from 4.39 in Q1 2013 to 2.45 in Q3 2015. This decline reflects a slowing rate at which inventory is sold and replaced, potentially indicating weaker sales or overstocking. Beginning late 2015, the ratio shows modest recovery, increasing to approximately 3.06 by Q1 2017. While this improvement suggests enhanced inventory management or stronger sales velocity, the turnover ratio remains below earlier levels, underscoring ongoing challenges in inventory efficiency.
- Summary of Insights
- The analyzed data indicates that the firm experienced notable fluctuations in production costs with a general upward movement in inventories over the five-year span. The decreasing inventory turnover ratio during the same period highlights potential concerns regarding inventory management and sales performance, particularly between 2013 and 2015. The partial rebound in turnover ratio after 2015 may reflect corrective measures or improving market conditions. Overall, the interplay between rising inventory levels and fluctuating cost of products sold, alongside the restrained turnover ratio, merit continued monitoring to optimize working capital and operational efficiency.
Receivables Turnover
Reynolds American Inc., receivables turnover calculation (quarterly data)
| Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Net sales, includes excise taxes | ||||||||||||||||||||||||||||
| Accounts receivable | ||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Receivables turnover1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Coca-Cola Co. | ||||||||||||||||||||||||||||
| Mondelēz International Inc. | ||||||||||||||||||||||||||||
| PepsiCo Inc. | ||||||||||||||||||||||||||||
| Philip Morris International Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q1 2017 Calculation
Receivables turnover
= (Net sales, includes excise taxesQ1 2017
+ Net sales, includes excise taxesQ4 2016
+ Net sales, includes excise taxesQ3 2016
+ Net sales, includes excise taxesQ2 2016)
÷ Accounts receivable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net sales, includes excise taxes
- Over the periods from March 2012 to March 2017, net sales demonstrated notable fluctuations. Initially, sales rose from 2,856 million USD to a peak around mid-2015, reaching as high as 4,381 million USD in September 2015. Following this peak, sales figures generally decreased, ending at 3,931 million USD by March 2017. This suggests a period of growth until late 2015, after which sales experienced a gradual decline. Seasonal or cyclical patterns might be implicated, given some recurring decreases in the final quarters.
- Accounts receivable
- Accounts receivable values vary without a clear upward or downward long-term trend. There are periods of increase, such as the rise to 145 million USD by June 2015, and periods of decline, including a low of 37 million USD in March 2016. This variability may suggest fluctuating credit policies or changes in customer payment behavior. The significant dip around early 2016 could indicate improved collection efforts or a reduction in credit sales.
- Receivables turnover ratio
- The receivables turnover ratio shows substantial volatility across the available periods. It starts at a relatively high value (e.g., 140.54 in March 2012) and exhibits declines and peaks intermittently. The ratio reached very high values, notably 454.27 in March 2016, indicating a rapid collection of receivables at that time. Generally, a high turnover ratio implies efficient collection processes, while lower values suggest slower receivables conversion to cash. The data indicates periods of both efficient and less efficient receivables management.
- Overall financial insight
- The trends in sales and accounts receivable imply variability in operational efficiency and market conditions over the examined timeline. The peak in sales during 2015 followed by a decline could reflect changing market demand or competitive pressures. The fluctuations in receivables and their turnover correspond with this, possibly indicating shifts in credit management policies or customer payment terms. Periods of high receivables turnover correspond to improved collection efficiency, which could positively impact cash flow. Monitoring these indicators closely remains essential to understand ongoing financial performance and optimize working capital management.
Payables Turnover
Reynolds American Inc., payables turnover calculation (quarterly data)
| Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Cost of products sold, excludes excise taxes | ||||||||||||||||||||||||||||
| Accounts payable | ||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Payables turnover1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Payables Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Mondelēz International Inc. | ||||||||||||||||||||||||||||
| Philip Morris International Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q1 2017 Calculation
Payables turnover
= (Cost of products sold, excludes excise taxesQ1 2017
+ Cost of products sold, excludes excise taxesQ4 2016
+ Cost of products sold, excludes excise taxesQ3 2016
+ Cost of products sold, excludes excise taxesQ2 2016)
÷ Accounts payable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Cost of products sold, excludes excise taxes
- The cost of products sold demonstrates a fluctuating pattern over the examined periods. Initially, from March 2012 to December 2012, costs range between 994 million and 1,133 million US dollars, with a slight increase toward the year-end. A notable decline occurs in March 2013, dropping to 694 million, which represents a significant decrease compared to preceding quarters. However, subsequent quarters show a recovery back to levels exceeding 1,000 million US dollars, peaking at 1,404 million in September 2015. After this peak, costs generally decrease but remain above 1,100 million until the end of 2015. Throughout 2016 and into the first quarter of 2017, costs exhibit moderate variability, hovering between approximately 1,165 million and 1,212 million US dollars, without a clear upward or downward trend.
- Accounts payable
- Accounts payable values do not exhibit a consistent trend but reflect some seasonality and volatility. Early 2012 figures start at 151 million US dollars, dip to a low of 123 million in June 2012, and then increase irregularly, reaching 187 million by the end of 2012. During 2013 and 2014, accounts payable remain within a moderate range of approximately 126 million to 179 million US dollars, showing periodic ups and downs without a steady direction. In 2015 and 2016, the account displays higher variability, with notable spikes such as 191 million in June 2016 and reaching a maximum of 221 million in September 2016. The first quarter of 2017 shows a slight reduction to 175 million, indicating some correction after peak values.
- Payables turnover ratio
- The payables turnover ratio indicates considerable fluctuations throughout the periods. Beginning with a value of 23.11 in March 2012, the ratio escalates to a peak of 31.57 in June 2015, implying faster turnover of payables during this time. Other notable high points include 36.25 in June 2016, suggesting very rapid payables processing in mid-2016. However, the ratio also shows declines, such as 19.88 in March 2014 and values around 21.9 in December 2016, indicating slower turnover in those quarters. Overall, the ratio varies between approximately 19.88 and 36.25, reflecting changing management or operational conditions affecting how quickly payables are settled.
- Summary of relationships and trends
- Analyzing these three financial metrics together reveals that periods of higher cost of products sold do not consistently align with higher accounts payable or faster payables turnover. The significant cost decline in early 2013 coincides with stable accounts payable levels and moderate turnover ratios. Peaks in accounts payable during 2016 correspond with the highest payables turnover ratio, suggesting periods of increased activity in payable settlements potentially related to operational or procurement cycles. The variability in payables turnover suggests changing payment terms or cash management strategies across these years. No steady upward or downward trends in liabilities or cost of goods sold are evident, implying a dynamic operational environment with periodic adjustments rather than continuous growth or reduction.
Working Capital Turnover
Reynolds American Inc., working capital turnover calculation (quarterly data)
| Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||
| Less: Current liabilities | ||||||||||||||||||||||||||||
| Working capital | ||||||||||||||||||||||||||||
| Net sales, includes excise taxes | ||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Working capital turnover1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Coca-Cola Co. | ||||||||||||||||||||||||||||
| Mondelēz International Inc. | ||||||||||||||||||||||||||||
| PepsiCo Inc. | ||||||||||||||||||||||||||||
| Philip Morris International Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q1 2017 Calculation
Working capital turnover
= (Net sales, includes excise taxesQ1 2017
+ Net sales, includes excise taxesQ4 2016
+ Net sales, includes excise taxesQ3 2016
+ Net sales, includes excise taxesQ2 2016)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The quarterly financial data reveals notable fluctuations and trends in both working capital and net sales over the observed periods. The working capital demonstrates considerable volatility, with values oscillating between negative and positive figures throughout the timeline. Starting with a negative working capital of -166 million US dollars on March 31, 2012, it sharply declined to -1234 million by September 30, 2012, followed by a significant positive spike to 1043 million at year-end 2012. Subsequent quarters show irregular behavior with working capital mostly staying positive in 2013 and early 2014 but dipping into negatives in certain quarters thereafter, particularly towards the end of the timeline, indicating potential challenges in managing short-term assets and liabilities consistently.
Net sales, including excise taxes, have generally ranged between approximately 2700 million and 4300 million US dollars per quarter. The data exhibits some seasonality and growth patterns; for example, net sales experienced minor fluctuations in 2012 and 2013, ranging from about 2700 million to 3200 million, but there is a noticeable increase during 2015 and 2016 where sales peaked near and above 4300 million US dollars before declining slightly towards the first quarter of 2017. This indicates periods of strengthened revenue performance, possibly driven by market demand or pricing strategies.
The working capital turnover ratio is available for select quarters and indicates efficiency in utilizing working capital to generate sales. Starting from 11.72 in the first quarter of 2013, the ratio showed an increasing trend through 2014, peaking dramatically at 88.41 and 70.77 during the third and fourth quarters, respectively. This suggests more effective turnover of working capital relative to sales during this period despite the erratic working capital values. Later, in 2015 and 2016, the turnover ratio stabilizes somewhat, with values ranging from about 12.4 to 18.38, except for an outlier of 132.75 in the third quarter of 2016. The inconsistency and high peaks could reflect the volatility in working capital balances more than sustained operational efficiency improvements.
In summary, the data portray a company experiencing mixed operational efficiency and working capital management challenges across the studied timeframe. While net sales show positive trends with growth in certain periods, working capital remains unstable, influencing the fluctuations observed in turnover ratios. Attention to balancing short-term asset and liability management could help support more stable financial operations and improved efficiency going forward.
- Working Capital
- Highly volatile, with swings between significant positives and negatives, reflecting inconsistent management of current assets and liabilities.
- Net Sales
- Generally robust with periods of growth, peaking around 2015-2016 before a slight decrease in early 2017; suggests overall resilience in revenue generation.
- Working Capital Turnover Ratio
- Marked by extreme values and fluctuations, indicating that the efficiency of working capital usage fluctuated and was sometimes influenced by irregular working capital balances.
- Overall Insight
- While revenue performance shows growth phases, unstable working capital levels have introduced volatility in operational efficiency, suggesting the need for refined short-term financial management.
Average Inventory Processing Period
Reynolds American Inc., average inventory processing period calculation (quarterly data)
| Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||
| Inventory turnover | ||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||
| Average inventory processing period1 | ||||||||||||||||||||||||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | ||||||||||||||||||||||||||||
| Coca-Cola Co. | ||||||||||||||||||||||||||||
| Mondelēz International Inc. | ||||||||||||||||||||||||||||
| PepsiCo Inc. | ||||||||||||||||||||||||||||
| Philip Morris International Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q1 2017 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Inventory Turnover Ratio
- The inventory turnover ratio shows a general declining trend from early 2012 through 2017. Starting around 4.39 in the first quarter of 2012, it gradually decreases, reaching its lowest point near 2.45 in the third quarter of 2015. After that, there is a moderate recovery to approximately 3.06 by the first quarter of 2017. This pattern indicates that the company was turning over its inventory less frequently over the earlier years, with some improvement in more recent periods.
- Average Inventory Processing Period (in days)
- The average inventory processing period inversely mirrors the inventory turnover ratio, increasing from about 83 days in early 2012 to a peak of approximately 149 days in the third quarter of 2015. This denotes a lengthening of the time inventory remains on hand before being sold. Following this peak, the period decreases somewhat, reaching around 119 days by the first quarter of 2017. This suggests that after a period of slower inventory movement, the company has improved inventory processing efficiency to some extent.
- Overall Insights
- The data illustrates a period of declining efficiency in inventory management through mid-2015, with slower turnover and longer processing times. However, from mid-2015 to early 2017, there is a noticeable effort to enhance inventory handling resulting in increased turnover and reduced processing days. This trend could reflect operational adjustments aimed at optimizing inventory levels or responding to market conditions affecting sales velocity.
Average Receivable Collection Period
Reynolds American Inc., average receivable collection period calculation (quarterly data)
| Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||
| Receivables turnover | ||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||
| Average receivable collection period1 | ||||||||||||||||||||||||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||||||
| Coca-Cola Co. | ||||||||||||||||||||||||||||
| Mondelēz International Inc. | ||||||||||||||||||||||||||||
| PepsiCo Inc. | ||||||||||||||||||||||||||||
| Philip Morris International Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q1 2017 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover Ratio
- The receivables turnover ratio data begins from the period ending March 31, 2012, with missing values prior to that. Starting at 140.54, the ratio exhibits some fluctuations but generally remains around the range of 100 to 150 through 2012 to early 2015. Notably, the ratio dips to a low of 86.3 in September 2015, before sharply increasing to a peak of 220.84 by December 2015. Subsequently, the ratio maintains high values throughout 2016, ranging approximately between 189 and 255, with an exceptional surge to 454.27 in the quarter ending September 2016, followed by a moderation to 306 by March 2017. This trend reflects a substantial improvement in receivables turnover efficiency over time, indicating quicker collection of receivables particularly in the latter periods.
- Average Receivable Collection Period (Number of Days)
- The average receivable collection period remains stable at around 3 days from March 2012 through December 2014. A slight increase to 4 days is observed during the first three quarters of 2015, signaling a minor delay in collection. However, starting from December 2015, the collection period sharply decreases to 2 days and further shortens to just 1 day for the final three reported quarters ending March 2017. This decrease corresponds inversely with the increased receivables turnover ratio, indicating more rapid conversion of receivables into cash as the time period progresses.
- Overall Analysis
- The data indicates an overall positive trend in the efficiency of accounts receivable management. The receivables turnover ratio shows significant volatility but an overall increasing trend after mid-2015, while the average collection period steadily declines, reaching a minimal one-day period towards the end of the timeframe. This suggests improved credit and collections policies or operational efficiencies that resulted in accelerated cash collection from receivables. The notable peak in turnover ratio and corresponding collection period drop around 2016 clearly mark a period of enhanced financial performance in receivables management.
Operating Cycle
Reynolds American Inc., operating cycle calculation (quarterly data)
No. days
| Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||
| Average inventory processing period | ||||||||||||||||||||||||||||
| Average receivable collection period | ||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Operating cycle1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Operating Cycle, Competitors2 | ||||||||||||||||||||||||||||
| Coca-Cola Co. | ||||||||||||||||||||||||||||
| Mondelēz International Inc. | ||||||||||||||||||||||||||||
| PepsiCo Inc. | ||||||||||||||||||||||||||||
| Philip Morris International Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q1 2017 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
- Inventory Processing Period
- The average inventory processing period has exhibited an overall increasing trend from 83 days in the first quarter of 2013 to a peak of 149 days in the third quarter of 2015. Following this peak, the period gradually decreased but remained significantly elevated compared to early 2013 levels, ending around 119 days by the first quarter of 2017. This suggests that inventory is being held longer over time, which could imply slower turnover or increased stock levels.
- Receivable Collection Period
- The average receivable collection period has remained remarkably stable and low throughout the analyzed quarters, ranging predominantly between 1 and 4 days. There is a slight decline from 4 days in early 2015 to just 1 day by early 2017. This indicates a strong and consistent efficiency in collecting receivables with marginal improvement in speed over the period.
- Operating Cycle
- The operating cycle has followed a pattern closely aligned with the inventory processing period, starting from 86 days in early 2013 and climbing steadily to a maximum of 153 days in the third quarter of 2015. After this peak, the operating cycle trends downward but remains elevated relative to its initial levels, stabilizing near 120 days by the first quarter of 2017. This pattern reflects the influence of the rising inventory days on the overall operating cycle, while the stable receivables period has a minimal impact on changes.
Average Payables Payment Period
Reynolds American Inc., average payables payment period calculation (quarterly data)
| Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||
| Payables turnover | ||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||||||
| Average payables payment period1 | ||||||||||||||||||||||||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | ||||||||||||||||||||||||||||
| Mondelēz International Inc. | ||||||||||||||||||||||||||||
| Philip Morris International Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q1 2017 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover Ratio
- The payables turnover ratio shows notable fluctuations throughout the observed periods. Starting in the earlier quarters of 2012 from March to June, data is absent; however, from September 2012 onward, the ratio demonstrates variability ranging between a low of 19.88 and a high of 36.25. Peaks are observed in quarters ending December 31, 2015 (36.25) and June 30, 2015 (31.57), indicating periods when the company paid its suppliers more frequently within the accounting period. Some dips occur in quarters such as March 31, 2014 (19.88) and March 31, 2017 (21.90), suggesting slower payment cycles during those times. Overall, the ratio does not follow a consistent upward or downward trend but fluctuates, suggesting varying payment behaviors across quarters.
- Average Payables Payment Period (Days)
- The average payables payment period in days inversely corresponds generally to the payables turnover ratio, moving between 10 and 18 days. Early in the dataset from March to June 2012, no data is provided. From September 2012 onwards, the number of days shows variation with lows around 10 days (notably December 31, 2016) and highs reaching 18 days (March 31, 2014). The metric shows no persistent trend but oscillates quarter to quarter, reflecting changing payment timing to suppliers. Periods with longer payment durations coincide with lower turnover ratios and vice versa, indicating that when the company takes more days to pay, the turnover ratio decreases accordingly.
- Overall Analysis
- The data reveals that the company's management of accounts payable experiences periodic fluctuations without a clear long-term improvement or deterioration trend. The inverse relationship between the payables turnover ratio and the average payment period is consistent, demonstrating typical financial behavior regarding supplier payments. These variations might be influenced by operational cycles, seasonal factors, or strategic payment management practices. Continuous monitoring would be advisable to discern whether these fluctuations impact the company’s liquidity or supplier relations over a longer timeframe.
Cash Conversion Cycle
Reynolds American Inc., cash conversion cycle calculation (quarterly data)
No. days
| Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||||||
| Average inventory processing period | ||||||||||||||||||||||||||||
| Average receivable collection period | ||||||||||||||||||||||||||||
| Average payables payment period | ||||||||||||||||||||||||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||||||
| Cash conversion cycle1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Cash Conversion Cycle, Competitors2 | ||||||||||||||||||||||||||||
| Mondelēz International Inc. | ||||||||||||||||||||||||||||
| Philip Morris International Inc. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q1 2017 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period demonstrates a general upward trend from March 2013 onwards, starting at 83 days and increasing to a peak of 149 days in September 2015. Following this peak, there is a decline to 130 days in December 2015. After a slight rebound to 135 days in March 2016, the period subsequently decreases, fluctuating between 108 and 124 days through to March 2017. This pattern suggests an initial lengthening of inventory turnover time, followed by a period of some stabilization and mild improvement.
- Average Receivable Collection Period
- The average receivable collection period remains remarkably stable, predominantly steady at 3 to 4 days from March 2013 to September 2015. Notably, starting in December 2015, it shows a consistent reduction, dropping to 2 days, and further to 1 day by December 2016, maintaining this shortest collection period through March 2017. This trend indicates improved efficiency in collecting receivables in the latter periods.
- Average Payables Payment Period
- The average payables payment period exhibits some volatility, initially decreasing from 16 days in March 2013 to a low of 10 days in December 2016. There are intermittent increases, such as the spike to 18 days in March 2014 and 17 days in June 2014, followed by a general decline. Towards the end of the period under review, it rises again to 15 days in December 2016 and settles at 13 days in March 2017. This variability suggests changes in payment timing practices, possibly influenced by cash flow or supplier negotiations.
- Cash Conversion Cycle
- The cash conversion cycle shows a clear upward movement initially, increasing from 70 days in March 2013 to a high of 137 days in September 2015. After reaching that peak, the cycle shortens noticeably, declining to 97 days by March 2017, though with some fluctuations in between. The overall trend corresponds closely with changes in inventory processing time, highlighting the impact of inventory management on the company's working capital cycle.