Microsoft Excel LibreOffice Calc

Colgate-Palmolive Co. (CL)

Short-term (Operating) Activity Analysis

Difficulty: Beginner

  • Annual Data
  • Quarterly Data

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

    Ratios (Summary)

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

    Microsoft Excel LibreOffice Calc
    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Turnover Ratios
    Inventory turnover 5.06 5.19 5.62 5.19 5.07
    Receivables turnover 10.44 10.77 11.24 11.13 10.65
    Payables turnover 5.09 5.40 5.98 5.82 5.38
    Working capital turnover 12.55 14.71 18.86 18.84 49.49
    Average No. of Days
    Average inventory processing period 72 70 65 70 72
    Add: Average receivable collection period 35 34 32 33 34
    Operating cycle 107 104 97 103 106
    Less: Average payables payment period 72 68 61 63 68
    Cash conversion cycle 35 36 36 40 38

    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 2015 to 2016 and from 2016 to 2017.
    Receivables turnover An activity ratio equal to revenue divided by receivables. Colgate-Palmolive Co.'s receivables turnover deteriorated from 2015 to 2016 and from 2016 to 2017.
    Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Colgate-Palmolive Co.'s payables turnover declined from 2015 to 2016 and from 2016 to 2017.
    Working capital turnover An activity ratio calculated as revenue divided by working capital. Colgate-Palmolive Co.'s working capital turnover deteriorated from 2015 to 2016 and from 2016 to 2017.
    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 2015 to 2016 and from 2016 to 2017.
    Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Colgate-Palmolive Co.'s average receivable collection period deteriorated from 2015 to 2016 and from 2016 to 2017.
    Operating cycle Equal to average inventory processing period plus average receivables collection period. Colgate-Palmolive Co.'s operating cycle deteriorated from 2015 to 2016 and from 2016 to 2017.
    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 2015 to 2016 and from 2016 to 2017.
    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.

    Inventory Turnover

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

    Microsoft Excel LibreOffice Calc
    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Selected Financial Data (USD $ in millions)
    Cost of sales 6,174  6,072  6,635  7,168  7,219 
    Inventories 1,221  1,171  1,180  1,382  1,425 
    Ratio
    Inventory turnover1 5.06 5.19 5.62 5.19 5.07
    Benchmarks
    Inventory Turnover, Competitors
    Kimberly-Clark Corp. 6.54 6.88 6.27 6.89 6.23
    Nike Inc. 3.77 3.60 3.81 3.89 4.16
    Inventory Turnover, Sector
    Personal Goods 4.58 4.56 4.73 4.92 4.99
    Inventory Turnover, Industry
    Consumer Goods 7.39 7.55 7.60 7.66 7.38

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

    2017 Calculations

    1 Inventory turnover = Cost of sales ÷ Inventories
    = 6,174 ÷ 1,221 = 5.06

    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 2015 to 2016 and from 2016 to 2017.

    Receivables Turnover

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

    Microsoft Excel LibreOffice Calc
    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Selected Financial Data (USD $ in millions)
    Net sales 15,454  15,195  16,034  17,277  17,420 
    Receivables, net of allowances 1,480  1,411  1,427  1,552  1,636 
    Ratio
    Receivables turnover1 10.44 10.77 11.24 11.13 10.65
    Benchmarks
    Receivables Turnover, Competitors
    Kimberly-Clark Corp. 7.89 8.36 8.15 8.87 8.31
    Nike Inc. 9.34 9.99 9.11 8.10 8.12
    Receivables Turnover, Sector
    Personal Goods 9.11 9.63 9.23 8.99 8.75
    Receivables Turnover, Industry
    Consumer Goods 13.40 13.52 14.03 12.82 13.19

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

    2017 Calculations

    1 Receivables turnover = Net sales ÷ Receivables, net of allowances
    = 15,454 ÷ 1,480 = 10.44

    Ratio Description The company
    Receivables turnover An activity ratio equal to revenue divided by receivables. Colgate-Palmolive Co.'s receivables turnover deteriorated from 2015 to 2016 and from 2016 to 2017.

    Payables Turnover

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

    Microsoft Excel LibreOffice Calc
    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Selected Financial Data (USD $ in millions)
    Cost of sales 6,174  6,072  6,635  7,168  7,219 
    Accounts payable 1,212  1,124  1,110  1,231  1,343 
    Ratio
    Payables turnover1 5.09 5.40 5.98 5.82 5.38
    Benchmarks
    Payables Turnover, Competitors
    Kimberly-Clark Corp. 4.13 4.43 4.58 4.99 5.35
    Nike Inc. 9.30 7.94 7.76 7.95 8.67
    Payables Turnover, Sector
    Personal Goods 6.06 5.91 6.00 6.16 6.34
    Payables Turnover, Industry
    Consumer Goods 4.87 5.12 5.59 6.06 6.03

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

    2017 Calculations

    1 Payables turnover = Cost of sales ÷ Accounts payable
    = 6,174 ÷ 1,212 = 5.09

    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 2015 to 2016 and from 2016 to 2017.

    Working Capital Turnover

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

    Microsoft Excel LibreOffice Calc
    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Selected Financial Data (USD $ in millions)
    Current assets 4,639  4,338  4,384  4,863  4,822 
    Less: Current liabilities 3,408  3,305  3,534  3,946  4,470 
    Working capital 1,231  1,033  850  917  352 
    Net sales 15,454  15,195  16,034  17,277  17,420 
    Ratio
    Working capital turnover1 12.55 14.71 18.86 18.84 49.49
    Benchmarks
    Working Capital Turnover, Competitors
    Kimberly-Clark Corp. – – – – 30.13
    Nike Inc. 3.24 3.35 3.17 3.21 2.61
    Working Capital Turnover, Sector
    Personal Goods 6.09 6.60 6.82 7.27 5.94
    Working Capital Turnover, Industry
    Consumer Goods 19.23 22.86 15.33 – 72.46

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

    2017 Calculations

    1 Working capital turnover = Net sales ÷ Working capital
    = 15,454 ÷ 1,231 = 12.55

    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 2015 to 2016 and from 2016 to 2017.

    Average Inventory Processing Period

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

    Microsoft Excel LibreOffice Calc
    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Selected Financial Data
    Inventory turnover 5.06 5.19 5.62 5.19 5.07
    Ratio (no. of days)
    Average inventory processing period1 72 70 65 70 72
    Benchmarks (no. of days)
    Average Inventory Processing Period, Competitors
    Kimberly-Clark Corp. 56 53 58 53 59
    Nike Inc. 97 101 96 94 88
    Average Inventory Processing Period, Sector
    Personal Goods 80 80 77 74 73
    Average Inventory Processing Period, Industry
    Consumer Goods 49 48 48 48 49

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

    2017 Calculations

    1 Average inventory processing period = 365 ÷ Inventory turnover
    = 365 ÷ 5.06 = 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 2015 to 2016 and from 2016 to 2017.

    Average Receivable Collection Period

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

    Microsoft Excel LibreOffice Calc
    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Selected Financial Data
    Receivables turnover 10.44 10.77 11.24 11.13 10.65
    Ratio (no. of days)
    Average receivable collection period1 35 34 32 33 34
    Benchmarks (no. of days)
    Average Receivable Collection Period, Competitors
    Kimberly-Clark Corp. 46 44 45 41 44
    Nike Inc. 39 37 40 45 45
    Average Receivable Collection Period, Sector
    Personal Goods 40 38 40 41 42
    Average Receivable Collection Period, Industry
    Consumer Goods 27 27 26 28 28

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

    2017 Calculations

    1 Average receivable collection period = 365 ÷ Receivables turnover
    = 365 ÷ 10.44 = 35

    Ratio Description The company
    Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Colgate-Palmolive Co.'s average receivable collection period deteriorated from 2015 to 2016 and from 2016 to 2017.

    Operating Cycle

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

    No. of days

    Microsoft Excel LibreOffice Calc
    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Selected Financial Data
    Average inventory processing period 72 70 65 70 72
    Average receivable collection period 35 34 32 33 34
    Ratio
    Operating cycle1 107 104 97 103 106
    Benchmarks
    Operating Cycle, Competitors
    Kimberly-Clark Corp. 102 97 103 94 103
    Nike Inc. 136 138 136 139 133
    Operating Cycle, Sector
    Personal Goods 120 118 117 115 115
    Operating Cycle, Industry
    Consumer Goods 76 75 74 76 77

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

    2017 Calculations

    1 Operating cycle = Average inventory processing period + Average receivable collection period
    = 72 + 35 = 107

    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 2015 to 2016 and from 2016 to 2017.

    Average Payables Payment Period

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

    Microsoft Excel LibreOffice Calc
    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Selected Financial Data
    Payables turnover 5.09 5.40 5.98 5.82 5.38
    Ratio (no. of days)
    Average payables payment period1 72 68 61 63 68
    Benchmarks (no. of days)
    Average Payables Payment Period, Competitors
    Kimberly-Clark Corp. 88 82 80 73 68
    Nike Inc. 39 46 47 46 42
    Average Payables Payment Period, Sector
    Personal Goods 60 62 61 59 58
    Average Payables Payment Period, Industry
    Consumer Goods 75 71 65 60 61

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

    2017 Calculations

    1 Average payables payment period = 365 ÷ Payables turnover
    = 365 ÷ 5.09 = 72

    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 2015 to 2016 and from 2016 to 2017.

    Cash Conversion Cycle

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

    No. of days

    Microsoft Excel LibreOffice Calc
    Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
    Selected Financial Data
    Average inventory processing period 72 70 65 70 72
    Average receivable collection period 35 34 32 33 34
    Average payables payment period 72 68 61 63 68
    Ratio
    Cash conversion cycle1 35 36 36 40 38
    Benchmarks
    Cash Conversion Cycle, Competitors
    Kimberly-Clark Corp. 14 15 23 21 35
    Nike Inc. 97 92 89 93 91
    Cash Conversion Cycle, Sector
    Personal Goods 60 56 56 56 57
    Cash Conversion Cycle, Industry
    Consumer Goods 1 4 9 16 16

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

    2017 Calculations

    1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
    = 72 + 35 – 72 = 35

    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.