Stock Analysis on Net
Stock Analysis on Net

Procter & Gamble Co. (NYSE:PG)

Analysis of Short-term (Operating) Activity Ratios

Microsoft Excel

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

Short-term Activity Ratios (Summary)

Procter & Gamble Co., short-term (operating) activity ratios

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Turnover Ratios
Inventory turnover 6.05 6.09 6.20 6.41 6.93 7.23
Receivables turnover 14.99 15.59 16.11 16.98 13.67 14.26
Payables turnover 2.93 2.83 2.70 2.92 3.09 3.31
Working capital turnover — — — — — —
Average No. Days
Average inventory processing period 60 60 59 57 53 50
Add: Average receivable collection period 24 23 23 21 27 26
Operating cycle 84 83 82 78 80 76
Less: Average payables payment period 125 129 135 125 118 110
Cash conversion cycle -41 -46 -53 -47 -38 -34

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Procter & Gamble Co. inventory turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Receivables turnover An activity ratio equal to revenue divided by receivables. Procter & Gamble Co. receivables turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Procter & Gamble Co. payables turnover ratio increased from 2021 to 2022 and from 2022 to 2023.
Short-term activity 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.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Procter & Gamble Co. operating cycle deteriorated from 2021 to 2022 and from 2022 to 2023.
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. Procter & Gamble Co. number of days of payables outstanding decreased from 2021 to 2022 and from 2022 to 2023.
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. Procter & Gamble Co. cash conversion cycle deteriorated from 2021 to 2022 and from 2022 to 2023.

Inventory Turnover

Procter & Gamble Co., inventory turnover calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Selected Financial Data (US$ in millions)
Cost of products sold 42,760 42,157 37,108 35,250 34,768 34,268
Inventories 7,073 6,924 5,983 5,498 5,017 4,738
Short-term Activity Ratio
Inventory turnover1 6.05 6.09 6.20 6.41 6.93 7.23
Benchmarks
Inventory Turnover, Industry
Consumer Staples 8.21 7.60 8.82 8.40 8.24 —

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

1 2023 Calculation
Inventory turnover = Cost of products sold ÷ Inventories
= 42,760 ÷ 7,073 = 6.05

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Procter & Gamble Co. inventory turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Receivables Turnover

Procter & Gamble Co., receivables turnover calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Selected Financial Data (US$ in millions)
Net sales 82,006 80,187 76,118 70,950 67,684 66,832
Accounts receivable 5,471 5,143 4,725 4,178 4,951 4,686
Short-term Activity Ratio
Receivables turnover1 14.99 15.59 16.11 16.98 13.67 14.26
Benchmarks
Receivables Turnover, Industry
Consumer Staples 35.38 34.89 38.54 37.27 34.73 —

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

1 2023 Calculation
Receivables turnover = Net sales ÷ Accounts receivable
= 82,006 ÷ 5,471 = 14.99

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Procter & Gamble Co. receivables turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Payables Turnover

Procter & Gamble Co., payables turnover calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Selected Financial Data (US$ in millions)
Cost of products sold 42,760 42,157 37,108 35,250 34,768 34,268
Accounts payable 14,598 14,882 13,720 12,071 11,260 10,344
Short-term Activity Ratio
Payables turnover1 2.93 2.83 2.70 2.92 3.09 3.31
Benchmarks
Payables Turnover, Industry
Consumer Staples 7.10 6.51 6.79 6.85 6.89 —

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

1 2023 Calculation
Payables turnover = Cost of products sold ÷ Accounts payable
= 42,760 ÷ 14,598 = 2.93

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Procter & Gamble Co. payables turnover ratio increased from 2021 to 2022 and from 2022 to 2023.

Working Capital Turnover

Procter & Gamble Co., working capital turnover calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Selected Financial Data (US$ in millions)
Current assets 22,648 21,653 23,091 27,987 22,473 23,320
Less: Current liabilities 35,756 33,081 33,132 32,976 30,011 28,237
Working capital (13,108) (11,428) (10,041) (4,989) (7,538) (4,917)
 
Net sales 82,006 80,187 76,118 70,950 67,684 66,832
Short-term Activity Ratio
Working capital turnover1 — — — — — —
Benchmarks
Working Capital Turnover, Industry
Consumer Staples — — — — — —

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

1 2023 Calculation
Working capital turnover = Net sales ÷ Working capital
= 82,006 ÷ -13,108 = —

Average Inventory Processing Period

Procter & Gamble Co., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Selected Financial Data
Inventory turnover 6.05 6.09 6.20 6.41 6.93 7.23
Short-term Activity Ratio (no. days)
Average inventory processing period1 60 60 59 57 53 50
Benchmarks (no. days)
Average Inventory Processing Period, Industry
Consumer Staples 44 48 41 43 44 —

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

1 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 6.05 = 60

Short-term activity 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.

Average Receivable Collection Period

Procter & Gamble Co., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Selected Financial Data
Receivables turnover 14.99 15.59 16.11 16.98 13.67 14.26
Short-term Activity Ratio (no. days)
Average receivable collection period1 24 23 23 21 27 26
Benchmarks (no. days)
Average Receivable Collection Period, Industry
Consumer Staples 10 10 9 10 11 —

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

1 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 14.99 = 24

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover.

Operating Cycle

Procter & Gamble Co., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Selected Financial Data
Average inventory processing period 60 60 59 57 53 50
Average receivable collection period 24 23 23 21 27 26
Short-term Activity Ratio
Operating cycle1 84 83 82 78 80 76
Benchmarks
Operating Cycle, Industry
Consumer Staples 54 58 50 53 55 —

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

1 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 60 + 24 = 84

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Procter & Gamble Co. operating cycle deteriorated from 2021 to 2022 and from 2022 to 2023.

Average Payables Payment Period

Procter & Gamble Co., average payables payment period calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Selected Financial Data
Payables turnover 2.93 2.83 2.70 2.92 3.09 3.31
Short-term Activity Ratio (no. days)
Average payables payment period1 125 129 135 125 118 110
Benchmarks (no. days)
Average Payables Payment Period, Industry
Consumer Staples 51 56 54 53 53 —

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

1 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 2.93 = 125

Short-term activity 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. Procter & Gamble Co. number of days of payables outstanding decreased from 2021 to 2022 and from 2022 to 2023.

Cash Conversion Cycle

Procter & Gamble Co., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018
Selected Financial Data
Average inventory processing period 60 60 59 57 53 50
Average receivable collection period 24 23 23 21 27 26
Average payables payment period 125 129 135 125 118 110
Short-term Activity Ratio
Cash conversion cycle1 -41 -46 -53 -47 -38 -34
Benchmarks
Cash Conversion Cycle, Industry
Consumer Staples 3 2 -4 0 2 —

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

1 2023 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 60 + 24 – 125 = -41

Short-term activity 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. Procter & Gamble Co. cash conversion cycle deteriorated from 2021 to 2022 and from 2022 to 2023.