Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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Liquidity Ratios (Summary)
Colgate-Palmolive Co., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
- Current Ratio Analysis
- The current ratio demonstrates a generally stable to improving liquidity position over the observed periods. Starting at 1.08 in March 2018, the ratio experienced minor fluctuations around the 1.06 to 1.14 range until the end of 2019. Thereafter, a decline occurred through mid-2020, reaching a low of 0.92 in June 2020, indicating a temporary reduction in short-term liquidity. Following this dip, the ratio steadily increased, reaching a peak of 1.28 in December 2022 before slightly declining but maintaining levels above 1.17 through mid-2023. This trend suggests a strengthening ability to cover current liabilities with current assets in recent quarters.
- Quick Ratio Analysis
- The quick ratio displays a more constrained liquidity trend compared to the current ratio. Initially fluctuating modestly between 0.60 and 0.65 from March 2018 to June 2019, it then declined progressively, hitting a low of 0.49 in June and December 2020. Post-2020, the ratio shows limited improvement, mostly stabilizing around 0.53 to 0.57, with a slight downward trend in mid-2023. The relatively lower and more stable quick ratio values compared to the current ratio highlight reliance on inventory or other less liquid current assets, pointing to a more conservative quick asset base in meeting short-term obligations.
- Cash Ratio Analysis
- The cash ratio remains the lowest among the three liquidity measures and depicts a relatively consistent pattern with minor fluctuations. It started at 0.21 in early 2018 and oscillated mainly between 0.19 and 0.23 through the entire period. Notably, there was no significant upward or downward trend, indicating that the company maintained a stable level of cash and cash equivalents relative to its current liabilities. The slight dip to 0.18 in June 2023 marks the lowest point but does not represent a substantial deviation from historical levels.
- Overall Liquidity Trend Insights
- The combined analysis of the liquidity ratios suggests that the company’s short-term financial health has improved in terms of total current assets (as reflected by the current ratio) since mid-2020. However, the slower recovery and lower values in the quick and cash ratios imply a moderate liquidity cushion excluding inventory and other less liquid assets. This indicates careful management or possible conservatism in liquid asset holdings, while maintaining sufficient assets to cover immediate liabilities. The trends through 2023 show a cautious but positive liquidity environment.
Current Ratio
Colgate-Palmolive Co., current ratio calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Current ratio1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Procter & Gamble Co. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2023 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- The current assets display fluctuations over the analyzed periods. Starting at 4,292 million in March 2018, the values showed a slight decline reaching a low of 3,793 million by December 2018. Subsequently, a gradual upward trend is evident, with current assets increasing steadily to a peak of 5,466 million in March 2023. Minor short-term dips occurred, such as in December 2021 and December 2022, but overall, the trend from 2019 onward is one of growth, indicating improved liquidity or accumulation of short-term resources.
- Current Liabilities
- Current liabilities exhibited more variability. Beginning at 3,980 million in March 2018, liabilities declined to 3,341 million by December 2018, followed by a general increase to 4,443 million by March 2020. After March 2020, liabilities fluctuated but remained broadly within a 4,000 to 4,600 million range through mid-2023, with some volatility evident, particularly a notable decrease to 4,004 million in March 2023. This volatility could reflect changing obligations or short-term debt management strategies during the periods evaluated.
- Current Ratio
- The current ratio, representing the proportion of current assets to current liabilities, started slightly above 1 at 1.08 in March 2018. Over 2018 and 2019, this ratio hovered around 1 to 1.14, indicating relatively balanced liquid asset coverage of liabilities. A decline below 1 occurred during 2020, with the ratio hitting a low of 0.92 in June 2020, which implies that current liabilities briefly exceeded current assets, possibly due to liquidity pressures or increased short-term obligations during this period. From 2021 onwards, a recovery and upward trend in the current ratio is visible, reaching a high of 1.28 in December 2022, suggesting an improvement in liquidity and a stronger position to cover short-term liabilities. The ratio slightly declined but remained healthy above 1.17 by mid-2023.
- Summary of Trends
- The liquidity indicators demonstrate an initial contraction in both assets and liabilities towards the end of 2018, followed by growth in assets outpacing liabilities from 2019 onward. The dip below a current ratio of 1 in 2020 aligns with global economic disruptions and indicates a temporary liquidity strain. The subsequent recovery and steady improvement in the current ratio through 2022 and into 2023 suggest enhanced management of working capital and a more robust financial position regarding short-term obligations. Fluctuations in liabilities highlight active liability management, while the consistent asset growth underscores a potential buildup of working capital resources.
Quick Ratio
Colgate-Palmolive Co., quick ratio calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||||||||||||||
| Receivables, net of allowances | |||||||||||||||||||||||||||||
| Total quick assets | |||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Quick ratio1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Procter & Gamble Co. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2023 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Trend in Total Quick Assets
- Total quick assets have shown some fluctuation over the periods analyzed, ranging mostly between approximately 2,100 and 2,500 million US dollars. There is a noticeable pattern of slight declines toward the end of each year followed by rebounds at the start of the following year. The highest values occur near the first quarters of most years, with notable peaks around March 2023 and June 2023, where values reached 2,457 and 2,475 million respectively.
- Trend in Current Liabilities
- Current liabilities demonstrate a generally upward trajectory over the time frame, increasing from around 3,341 million US dollars at the lowest point (December 2018) to above 4,400 million in recent quarters. There is considerable volatility, with some quarters showing dips, but the overall tendency is an increase, reaching a high of 4,632 million in June 2023.
- Trend in Quick Ratio
- The quick ratio has remained below 1 throughout the periods, indicating current liabilities consistently exceed quick assets. It fluctuates mostly between 0.49 and 0.65, with a gradual decline observed from early 2020, hitting lows near 0.49 to 0.51, then slightly improving towards the mid-2021 period before stabilizing around 0.53 to 0.57 in the latest quarters. This suggests a moderate but persistent pressure on liquidity relative to current liabilities.
- Summary of Financial Position
- The data reveals a consistent challenge in maintaining a quick ratio above 1, which typically signals the ability to meet short-term obligations without selling inventory. Increasing current liabilities combined with relatively stable quick assets led to the quick ratio mostly staying in the mid-0.5 range. Although total quick assets and current liabilities both experience periodic fluctuations, the liabilities grow at a generally stronger pace, which could reflect increasing short-term obligations or operational financing needs.
- Implications
- The persistence of a quick ratio below 1 over the analyzed periods indicates ongoing liquidity management needs. While there is resilience in quick assets as they hold steady or improve slightly at times, rising current liabilities may warrant closer monitoring to avoid liquidity risks. The company’s ability to sustain or improve quick asset levels in conjunction with controlling near-term liabilities will be critical for short-term financial stability.
Cash Ratio
Colgate-Palmolive Co., cash ratio calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||||||||||||||
| Total cash assets | |||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||
| Liquidity Ratio | |||||||||||||||||||||||||||||
| Cash ratio1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | |||||||||||||||||||||||||||||
| Procter & Gamble Co. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2023 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibit a fluctuating pattern over the analyzed quarters. Initially, cash assets remained relatively stable around the 830 to 950 million USD range from early 2018 through 2019. Notably, there was a peak near the end of 2019, but this was followed by volatility throughout 2020 and 2021, with values oscillating between approximately 830 million and just under 1 billion USD. Into 2022 and early 2023, cash assets generally trended lower, with a dip to around 775 million in early 2023, followed by a moderate recovery to approximately 820 million USD by mid-2023.
- Current Liabilities
- Current liabilities show a distinct upward trend over the period studied. Starting at roughly 4 billion USD in early 2018, liabilities dipped slightly mid-2018 before increasing again. From 2019 onward, current liabilities remained consistently above 4 billion USD, with peaks exceeding 4.5 billion USD in several quarters during 2020, 2022, and mid-2023. This indicates a growth in short-term obligations relative to the earlier quarters.
- Cash Ratio
- The cash ratio, representing the proportion of cash assets to current liabilities, declined slightly over time. Early 2018 ratios hovered around 0.21 to 0.22, suggesting that cash assets covered about 21–22% of current liabilities. Despite some variation and transient increases to 0.23, the ratio deteriorated to lows around 0.18 by mid-2023. This downward movement implies a comparatively weaker liquidity position relative to short-term liabilities as cash has not kept pace with the growth in current liabilities.
- Summary of Insights
- Over the observed period, cash holdings have fluctuated without clear sustained growth, while current liabilities have steadily increased. This imbalance has led to a declining cash ratio, indicating a reduced buffer of readily available assets to cover short-term obligations. The trends suggest increasing pressure on liquidity, potentially necessitating attention to cash management and liability control to maintain financial stability.