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You are a financial analyst and are comparing financial ratios of two competing companies in the consumer packaged goods sector: Kelloggs company and General Mills.
- You are a financial analyst and are comparing financial ratios of two competing companies in the consumer packaged goods sector: Kelloggs company and General Mills. The 2018 turnover ratios for the two companies are summarized in the following table:
| K | G |
Days sales outstanding | 37.24 | 36.11 |
Days inventory outstanding | 52.72 | 55.32 |
Days payable outstanding | 97.16 | 86.11 |
By comparison, which company has better cash conversion cycle? What conclusions do you get regarding the two companies management in accounts receivable, inventory and accounts payable? What suggestions you would make to improve their management in these three aspects respectively?
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