The review of Net Profit Margin witnessed a declining trend. The Net Profit Margin declined from 6.35% in 2020 to 3.98% in 2023.
The average EBIT Margin for the period under analysis was 5.44%, with 2022 and 2021 performing the worst and best, respectively.
The Inventory turnover stood at 5.18 times in 2023 from 6.79 in 2019, implying a high performance on Assets of the business in relation to revenue.
The Asset turnover stood at 1.70 times in 2023 from 0.79 in 2019, implying a high performance on Assets of the business in relation to revenue.
Profitability
The revenue of Kellogg’s has fluctuated year on year. The revenue decreased by a negative 14.20% between 2020 and 2021 and a further 9.55% increase was recorded between 2021 and 2022. There also occurred an increase of 2.52% between 2022 and 2023 (the current period).
Kellogg’s performance in profitability looks good as the return on capital employed also recorded good performance during the period of analysis.
Liquidity
The company’s result in liquidity looks poor, as current ratio/acid test decreased from 0.64:1/0.66:1 to 0.84:1/0.38:1 on the last year. Which implies that the company does not have enough assets to settle its current liabilities.
Capital Structure
Kellogg’s is both equity and debt financed.
The debt-to-equity (D/E) ratio has been falling year on year. The gearing position of the company appears to be low as it stood at 1.66% in the current year.
