Analysis of Short-term (Operating) Activity Ratios
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)
Colgate-Palmolive Co., short-term (operating) activity ratios
Based on: 10-K (filing date: 2021-02-18), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Colgate-Palmolive Co.’s inventory turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Colgate-Palmolive Co.’s receivables turnover ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Colgate-Palmolive Co.’s payables turnover ratio decreased from 2018 to 2019 and from 2019 to 2020. |
| 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. | Colgate-Palmolive Co.’s number of days of inventory outstanding deteriorated from 2018 to 2019 and from 2019 to 2020. |
| 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. | Colgate-Palmolive Co.’s operating cycle deteriorated from 2018 to 2019 and from 2019 to 2020. |
| 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. | |
| 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 deteriorated from 2018 to 2019 and from 2019 to 2020. |
Inventory Turnover
Colgate-Palmolive Co., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of sales | 6,454 | 6,368 | 6,313 | 6,174 | 6,072 | |
| Inventories | 1,673 | 1,400 | 1,250 | 1,221 | 1,171 | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 3.86 | 4.55 | 5.05 | 5.06 | 5.19 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Estée Lauder Cos. Inc. | 1.72 | 1.69 | 1.76 | 1.65 | 1.73 | |
| Procter & Gamble Co. | 6.41 | 6.93 | 7.23 | 7.04 | 6.98 | |
| Inventory Turnover, Sector | ||||||
| Household & Personal Products | 4.90 | 5.29 | 5.71 | 5.62 | 5.76 | |
| Inventory Turnover, Industry | ||||||
| Consumer Staples | 7.58 | 7.55 | 7.49 | 7.43 | 7.33 | |
Based on: 10-K (filing date: 2021-02-18), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).
1 2020 Calculation
Inventory turnover = Cost of sales ÷ Inventories
= 6,454 ÷ 1,673 = 3.86
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Colgate-Palmolive Co.’s inventory turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
Receivables Turnover
Colgate-Palmolive Co., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 16,471 | 15,693 | 15,544 | 15,454 | 15,195 | |
| Receivables, net of allowances | 1,264 | 1,440 | 1,400 | 1,480 | 1,411 | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 13.03 | 10.90 | 11.10 | 10.44 | 10.77 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Estée Lauder Cos. Inc. | 11.97 | 8.12 | 9.20 | 8.48 | 8.95 | |
| Procter & Gamble Co. | 16.98 | 13.67 | 14.26 | 14.16 | 14.93 | |
| Receivables Turnover, Sector | ||||||
| Household & Personal Products | 15.33 | 11.95 | 12.68 | 12.36 | 13.03 | |
| Receivables Turnover, Industry | ||||||
| Consumer Staples | 32.43 | 29.79 | 31.15 | 29.51 | 29.86 | |
Based on: 10-K (filing date: 2021-02-18), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).
1 2020 Calculation
Receivables turnover = Net sales ÷ Receivables, net of allowances
= 16,471 ÷ 1,264 = 13.03
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Colgate-Palmolive Co.’s receivables turnover ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level. |
Payables Turnover
Colgate-Palmolive Co., payables turnover calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of sales | 6,454 | 6,368 | 6,313 | 6,174 | 6,072 | |
| Accounts payable | 1,393 | 1,237 | 1,222 | 1,212 | 1,124 | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 4.63 | 5.15 | 5.17 | 5.09 | 5.40 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Estée Lauder Cos. Inc. | 3.02 | 2.27 | 2.41 | 2.92 | 3.04 | |
| Procter & Gamble Co. | 2.92 | 3.09 | 3.31 | 3.38 | 3.53 | |
| Payables Turnover, Sector | ||||||
| Household & Personal Products | 3.09 | 3.18 | 3.41 | 3.52 | 3.69 | |
| Payables Turnover, Industry | ||||||
| Consumer Staples | 6.80 | 6.89 | 6.98 | 7.37 | 7.93 | |
Based on: 10-K (filing date: 2021-02-18), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).
1 2020 Calculation
Payables turnover = Cost of sales ÷ Accounts payable
= 6,454 ÷ 1,393 = 4.63
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Colgate-Palmolive Co.’s payables turnover ratio decreased from 2018 to 2019 and from 2019 to 2020. |
Working Capital Turnover
Colgate-Palmolive Co., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 4,338 | 4,179 | 3,793 | 4,639 | 4,338 | |
| Less: Current liabilities | 4,404 | 4,038 | 3,341 | 3,408 | 3,305 | |
| Working capital | (66) | 141 | 452 | 1,231 | 1,033 | |
| Net sales | 16,471 | 15,693 | 15,544 | 15,454 | 15,195 | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | — | 111.30 | 34.39 | 12.55 | 14.71 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Estée Lauder Cos. Inc. | 3.85 | 5.70 | 4.79 | 5.52 | 7.29 | |
| Procter & Gamble Co. | — | — | — | — | 21.68 | |
| Working Capital Turnover, Sector | ||||||
| Household & Personal Products | — | — | — | — | 16.42 | |
| Working Capital Turnover, Industry | ||||||
| Consumer Staples | — | — | — | 184.71 | 97.91 | |
Based on: 10-K (filing date: 2021-02-18), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).
1 2020 Calculation
Working capital turnover = Net sales ÷ Working capital
= 16,471 ÷ -66 = —
2 Click competitor name to see calculations.
Average Inventory Processing Period
Colgate-Palmolive Co., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 3.86 | 4.55 | 5.05 | 5.06 | 5.19 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 95 | 80 | 72 | 72 | 70 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Estée Lauder Cos. Inc. | 212 | 216 | 208 | 222 | 211 | |
| Procter & Gamble Co. | 57 | 53 | 50 | 52 | 52 | |
| Average Inventory Processing Period, Sector | ||||||
| Household & Personal Products | 74 | 69 | 64 | 65 | 63 | |
| Average Inventory Processing Period, Industry | ||||||
| Consumer Staples | 48 | 48 | 49 | 49 | 50 | |
Based on: 10-K (filing date: 2021-02-18), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).
1 2020 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.86 = 95
2 Click competitor name to see calculations.
| 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. | Colgate-Palmolive Co.’s number of days of inventory outstanding deteriorated from 2018 to 2019 and from 2019 to 2020. |
Average Receivable Collection Period
Colgate-Palmolive Co., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 13.03 | 10.90 | 11.10 | 10.44 | 10.77 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 28 | 33 | 33 | 35 | 34 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Estée Lauder Cos. Inc. | 30 | 45 | 40 | 43 | 41 | |
| Procter & Gamble Co. | 21 | 27 | 26 | 26 | 24 | |
| Average Receivable Collection Period, Sector | ||||||
| Household & Personal Products | 24 | 31 | 29 | 30 | 28 | |
| Average Receivable Collection Period, Industry | ||||||
| Consumer Staples | 11 | 12 | 12 | 12 | 12 | |
Based on: 10-K (filing date: 2021-02-18), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).
1 2020 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 13.03 = 28
2 Click competitor name to see calculations.
| 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
Colgate-Palmolive Co., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 95 | 80 | 72 | 72 | 70 | |
| Average receivable collection period | 28 | 33 | 33 | 35 | 34 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 123 | 113 | 105 | 107 | 104 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Estée Lauder Cos. Inc. | 242 | 261 | 248 | 265 | 252 | |
| Procter & Gamble Co. | 78 | 80 | 76 | 78 | 76 | |
| Operating Cycle, Sector | ||||||
| Household & Personal Products | 98 | 100 | 93 | 95 | 91 | |
| Operating Cycle, Industry | ||||||
| Consumer Staples | 59 | 60 | 61 | 61 | 62 | |
Based on: 10-K (filing date: 2021-02-18), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).
1 2020 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 95 + 28 = 123
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Colgate-Palmolive Co.’s operating cycle deteriorated from 2018 to 2019 and from 2019 to 2020. |
Average Payables Payment Period
Colgate-Palmolive Co., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 4.63 | 5.15 | 5.17 | 5.09 | 5.40 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 79 | 71 | 71 | 72 | 68 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Estée Lauder Cos. Inc. | 121 | 161 | 152 | 125 | 120 | |
| Procter & Gamble Co. | 125 | 118 | 110 | 108 | 103 | |
| Average Payables Payment Period, Sector | ||||||
| Household & Personal Products | 118 | 115 | 107 | 104 | 99 | |
| Average Payables Payment Period, Industry | ||||||
| Consumer Staples | 54 | 53 | 52 | 50 | 46 | |
Based on: 10-K (filing date: 2021-02-18), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).
1 2020 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 4.63 = 79
2 Click competitor name to see calculations.
| 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. |
Cash Conversion Cycle
Colgate-Palmolive Co., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 95 | 80 | 72 | 72 | 70 | |
| Average receivable collection period | 28 | 33 | 33 | 35 | 34 | |
| Average payables payment period | 79 | 71 | 71 | 72 | 68 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 44 | 42 | 34 | 35 | 36 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Estée Lauder Cos. Inc. | 121 | 100 | 96 | 140 | 132 | |
| Procter & Gamble Co. | -47 | -38 | -34 | -30 | -27 | |
| Cash Conversion Cycle, Sector | ||||||
| Household & Personal Products | -20 | -15 | -14 | -9 | -8 | |
| Cash Conversion Cycle, Industry | ||||||
| Consumer Staples | 5 | 7 | 9 | 11 | 16 | |
Based on: 10-K (filing date: 2021-02-18), 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23).
1 2020 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 95 + 28 – 79 = 44
2 Click competitor name to see calculations.
| 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. | Colgate-Palmolive Co.’s cash conversion cycle deteriorated from 2018 to 2019 and from 2019 to 2020. |