Short-term (Operating) Activity Analysis


Ratios (Summary)

Colgate-Palmolive Co., short-term (operating) activity ratios

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Turnover Ratios
Inventory turnover 5.07 5.24 5.38 5.20 5.23
Receivables turnover 10.65 10.24 9.99 9.67 9.43
Payables turnover 5.38 5.54 5.74 5.46 5.39
Working capital turnover 49.49 20.84 24.39 7,782.00 72.64
Average No. of Days
Average inventory processing period 72 70 68 70 70
Add: Average receivable collection period 34 36 37 38 39
Operating cycle 106 106 105 108 109
Less: Average payables payment period 68 66 64 67 68
Cash conversion cycle 38 40 41 41 41

Source: Based on data from Colgate-Palmolive Co. Annual Reports

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Colgate-Palmolive Co.'s inventory turnover deteriorated from 2011 to 2012 and from 2012 to 2013.
Receivables turnover An activity ratio equal to revenue divided by receivables. Colgate-Palmolive Co.'s receivables turnover improved from 2011 to 2012 and from 2012 to 2013.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Colgate-Palmolive Co.'s payables turnover declined from 2011 to 2012 and from 2012 to 2013.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Colgate-Palmolive Co.'s working capital turnover deteriorated from 2011 to 2012 but then improved from 2012 to 2013 exceeding 2011 level.
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Colgate-Palmolive Co.'s average inventory processing period deteriorated from 2011 to 2012 and from 2012 to 2013.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnoverd. Colgate-Palmolive Co.'s average receivable collection period improved from 2011 to 2012 and from 2012 to 2013.
Operating cycle Equal to average inventory processing period plus average receivables collection period.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Colgate-Palmolive Co.'s average payables payment period increased from 2011 to 2012 and from 2012 to 2013.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Colgate-Palmolive Co.'s cash conversion cycle improved from 2011 to 2012 and from 2012 to 2013.

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Inventory Turnover

Colgate-Palmolive Co., inventory turnover calculation, comparison to benchmarks

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Selected Financial Data (USD $ in millions)
Cost of sales 7,219  7,153  7,144  6,360  6,319 
Inventories 1,425  1,365  1,327  1,222  1,209 
Ratio
Inventory turnover1 5.07 5.24 5.38 5.20 5.23
Benchmarks
Inventory Turnover, Competitors
Kimberly-Clark Corp. 6.23 6.10 6.24 5.56 6.24
Inventory Turnover, Sector
Personal Products 5.78 5.78 5.93 5.44 5.86
Inventory Turnover, Industry
Consumer Goods 7.61 7.46 8.10 7.81 7.30

Source: Based on data from Colgate-Palmolive Co. Annual Reports

2013 Calculations

1 Inventory turnover = Cost of sales ÷ Inventories
= 7,219 ÷ 1,425 = 5.07

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Colgate-Palmolive Co.'s inventory turnover deteriorated from 2011 to 2012 and from 2012 to 2013.

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Receivables Turnover

Colgate-Palmolive Co., receivables turnover calculation, comparison to benchmarks

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Selected Financial Data (USD $ in millions)
Net sales 17,420  17,085  16,734  15,564  15,327 
Receivables, net of allowances 1,636  1,668  1,675  1,610  1,626 
Ratio
Receivables turnover1 10.65 10.24 9.99 9.67 9.43
Benchmarks
Receivables Turnover, Competitors
Kimberly-Clark Corp. 8.31 7.97 8.01 7.99 7.45
Receivables Turnover, Sector
Personal Products 9.23 8.85 8.79 8.65 8.22
Receivables Turnover, Industry
Consumer Goods 13.25 11.91 13.58 12.51 13.86

Source: Based on data from Colgate-Palmolive Co. Annual Reports

2013 Calculations

1 Receivables turnover = Net sales ÷ Receivables, net of allowances
= 17,420 ÷ 1,636 = 10.65

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Colgate-Palmolive Co.'s receivables turnover improved from 2011 to 2012 and from 2012 to 2013.

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Payables Turnover

Colgate-Palmolive Co., payables turnover calculation, comparison to benchmarks

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Selected Financial Data (USD $ in millions)
Cost of sales 7,219  7,153  7,144  6,360  6,319 
Accounts payable 1,343  1,290  1,244  1,165  1,172 
Ratio
Payables turnover1 5.38 5.54 5.74 5.46 5.39
Benchmarks
Payables Turnover, Competitors
Kimberly-Clark Corp. 5.35 5.86 6.15 5.98 6.61
Payables Turnover, Sector
Personal Products 5.36 5.75 6.01 5.80 6.15
Payables Turnover, Industry
Consumer Goods 6.75 6.31 7.28 6.79 9.25

Source: Based on data from Colgate-Palmolive Co. Annual Reports

2013 Calculations

1 Payables turnover = Cost of sales ÷ Accounts payable
= 7,219 ÷ 1,343 = 5.38

Ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Colgate-Palmolive Co.'s payables turnover declined from 2011 to 2012 and from 2012 to 2013.

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Working Capital Turnover

Colgate-Palmolive Co., working capital turnover calculation, comparison to benchmarks

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Selected Financial Data (USD $ in millions)
Current assets 4,822  4,556  4,402  3,730  3,810 
Less: Current liabilities 4,470  3,736  3,716  3,728  3,599 
Working capital 352  820  686  211 
Net sales 17,420  17,085  16,734  15,564  15,327 
Ratio
Working capital turnover1 49.49 20.84 24.39 7,782.00 72.64
Benchmarks
Working Capital Turnover, Competitors
Kimberly-Clark Corp. 30.13 42.30 23.53 19.95 20.31
Working Capital Turnover, Sector
Personal Products 36.60 28.94 23.91 35.59 29.90
Working Capital Turnover, Industry
Consumer Goods 16.25 16.91 21.02 16.16 27.28

Source: Based on data from Colgate-Palmolive Co. Annual Reports

2013 Calculations

1 Working capital turnover = Net sales ÷ Working capital
= 17,420 ÷ 352 = 49.49

Ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Colgate-Palmolive Co.'s working capital turnover deteriorated from 2011 to 2012 but then improved from 2012 to 2013 exceeding 2011 level.

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Average Inventory Processing Period

Colgate-Palmolive Co., average inventory processing period calculation, comparison to benchmarks

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Selected Financial Data
Inventory turnover 5.07 5.24 5.38 5.20 5.23
Ratio (no. of days)
Average inventory processing period1 72 70 68 70 70
Benchmarks (no. of days)
Average Inventory Processing Period, Competitors
Kimberly-Clark Corp. 59 60 59 66 58
Average Inventory Processing Period, Sector
Personal Products 63 63 62 67 62
Average Inventory Processing Period, Industry
Consumer Goods 48 49 45 47 50

Source: Based on data from Colgate-Palmolive Co. Annual Reports

2013 Calculations

1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 5.07 = 72

Ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Colgate-Palmolive Co.'s average inventory processing period deteriorated from 2011 to 2012 and from 2012 to 2013.

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Average Receivable Collection Period

Colgate-Palmolive Co., average receivable collection period calculation, comparison to benchmarks

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Selected Financial Data
Receivables turnover 10.65 10.24 9.99 9.67 9.43
Ratio (no. of days)
Average receivable collection period1 34 36 37 38 39
Benchmarks (no. of days)
Average Receivable Collection Period, Competitors
Kimberly-Clark Corp. 44 46 46 46 49
Average Receivable Collection Period, Sector
Personal Products 40 41 42 42 44
Average Receivable Collection Period, Industry
Consumer Goods 28 31 27 29 26

Source: Based on data from Colgate-Palmolive Co. Annual Reports

2013 Calculations

1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 10.65 = 34

Ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnoverd. Colgate-Palmolive Co.'s average receivable collection period improved from 2011 to 2012 and from 2012 to 2013.

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Operating Cycle

Colgate-Palmolive Co., operating cycle calculation, comparison to benchmarks

No. of days

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Selected Financial Data
Average inventory processing period 72 70 68 70 70
Average receivable collection period 34 36 37 38 39
Ratio
Operating cycle1 106 106 105 108 109
Benchmarks
Operating Cycle, Competitors
Kimberly-Clark Corp. 103 106 105 112 107
Operating Cycle, Sector
Personal Products 103 104 104 109 106
Operating Cycle, Industry
Consumer Goods 76 80 72 76 76

Source: Based on data from Colgate-Palmolive Co. Annual Reports

2013 Calculations

1 Operating cycle = Average inventory processing period + Average receivable collection period
= 72 + 34 = 106

Ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period.

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Average Payables Payment Period

Colgate-Palmolive Co., average payables payment period calculation, comparison to benchmarks

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Selected Financial Data
Payables turnover 5.38 5.54 5.74 5.46 5.39
Ratio (no. of days)
Average payables payment period1 68 66 64 67 68
Benchmarks (no. of days)
Average Payables Payment Period, Competitors
Kimberly-Clark Corp. 68 62 59 61 55
Average Payables Payment Period, Sector
Personal Products 68 63 61 63 59
Average Payables Payment Period, Industry
Consumer Goods 54 58 50 54 39

Source: Based on data from Colgate-Palmolive Co. Annual Reports

2013 Calculations

1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 5.38 = 68

Ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Colgate-Palmolive Co.'s average payables payment period increased from 2011 to 2012 and from 2012 to 2013.

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Cash Conversion Cycle

Colgate-Palmolive Co., cash conversion cycle calculation, comparison to benchmarks

No. of days

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Selected Financial Data
Average inventory processing period 72 70 68 70 70
Average receivable collection period 34 36 37 38 39
Average payables payment period 68 66 64 67 68
Ratio
Cash conversion cycle1 38 40 41 41 41
Benchmarks
Cash Conversion Cycle, Competitors
Kimberly-Clark Corp. 35 44 46 51 52
Cash Conversion Cycle, Sector
Personal Products 35 41 43 46 47
Cash Conversion Cycle, Industry
Consumer Goods 22 22 22 22 37

Source: Based on data from Colgate-Palmolive Co. Annual Reports

2013 Calculations

1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 72 + 34 – 68 = 38

Ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Colgate-Palmolive Co.'s cash conversion cycle improved from 2011 to 2012 and from 2012 to 2013.

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