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

 
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 
Inventory Turnover, Comparison to Industry
Colgate-Palmolive Co.1 5.07 5.24 5.38 5.20 5.23
Industry, Consumer Goods 7.17 7.03 7.59 7.33 6.85

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

 
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 
Receivables Turnover, Comparison to Industry
Colgate-Palmolive Co.1 10.65 10.24 9.99 9.67 9.43
Industry, Consumer Goods 13.22 12.06 13.55 12.61 13.79

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

 
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 
Payables Turnover, Comparison to Industry
Colgate-Palmolive Co.1 5.38 5.54 5.74 5.46 5.39
Industry, Consumer Goods 6.49 6.13 6.97 6.56 8.87

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

 
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 
Working Capital Turnover, Comparison to Industry
Colgate-Palmolive Co.1 49.49 20.84 24.39 7,782.00 72.64
Industry, Consumer Goods 18.38 18.73 23.30 16.63 27.61

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

 
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
Average Inventory Processing Period (no. of days), Comparison to Industry
Colgate-Palmolive Co.1 72 70 68 70 70
Industry, Consumer Goods 51 52 48 50 53

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

 
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
Average Receivable Collection Period (no. of days), Comparison to Industry
Colgate-Palmolive Co.1 34 36 37 38 39
Industry, Consumer Goods 28 30 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

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
Operating Cycle, Comparison to Industry
Colgate-Palmolive Co.1 106 106 105 108 109
Industry, Consumer Goods 79 82 75 79 79

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

 
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
Average Payables Payment Period (no. of days), Comparison to Industry
Colgate-Palmolive Co.1 68 66 64 67 68
Industry, Consumer Goods 56 60 52 56 41

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

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
Cash Conversion Cycle, Comparison to Industry
Colgate-Palmolive Co.1 38 40 41 41 41
Industry, Consumer Goods 23 22 23 23 38

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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