Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Short-term Activity Ratios (Summary)
Colgate-Palmolive Co., short-term (operating) activity 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).
The analysis of the quarterly financial ratios and operating cycle metrics reveals several trends and fluctuations over the reviewed periods.
- Inventory Turnover
-
The inventory turnover ratio shows a gradual decline from 5.05 in March 2019 to a low of approximately 3.62 by September 2022, indicating slower inventory movement. A slight improvement is observed towards mid-2023, reaching 3.95.
- Receivables Turnover
-
This ratio fluctuates within the range of about 9.69 to 13.43 during the period. Initially, there is a decline from 11.1 in March 2019 to around 9.69 in September 2019, followed by a peak of 13.43 in March 2022. A moderate reduction is then noticed leading into 2023.
- Payables Turnover
-
Payables turnover remains relatively stable with minor fluctuations between 4.53 and 5.47. The figure does not exhibit any strong trend but indicates consistent supplier payment behavior across the periods.
- Working Capital Turnover
-
Significant volatility is apparent in working capital turnover. Early periods show figures ranging broadly from mid-thirties to over 130, with an extreme peak of 696.58 in September 2021, suggesting an outlier or irregularity. The subsequent quarters demonstrate a declining trend from about 50 down to 16.2 before partially recovering to 23.2 by mid-2023.
- Average Inventory Processing Period
-
A consistent lengthening is observed in inventory holding periods starting from 72 days in March 2019, increasing steadily to around 101 days by September 2022. A modest reduction occurs towards mid-2023, ending near 92 days, which indicates some easing in inventory accumulation.
- Average Receivable Collection Period
-
This metric remains fairly stable with minor oscillations between 27 and 38 days. There is no significant upward or downward trend, indicating steady efficiency in receivables collection over the quarters.
- Operating Cycle
-
The operating cycle lengthens slightly from 105 days in March 2019 to a peak of approximately 130 days between March 2022 and December 2022 before decreasing marginally to around 124 days by mid-2023. This signals a gradual increase in the total time period from inventory purchase to cash collection within this interval, with some improvement in the latest periods.
- Average Payables Payment Period
-
Payables payment periods vary moderately between approximately 67 and 81 days, without a definitive long-term trend. Peaks near 81 days are followed by decreases, suggesting some variations in payment timing to suppliers but no persistent change in policy or practice.
- Cash Conversion Cycle
-
The cash conversion cycle exhibits fluctuations from the mid-thirties up to about 56 days, with intermittent peaks around late 2021 and into 2022. The cycle length tends to stay elevated in recent years, ending near 54 days by mid-2023, indicating a relatively protracted period between cash outflows and inflows compared to earlier periods.
Overall, the data reveals a general trend of slower inventory turnover coupled with longer holding periods, causing an extended operating and cash conversion cycle. Receivables collection remains relatively consistent, while working capital turnover shows high variability with some extreme values suggesting episodic changes in asset or liability management. Payables turnover and payment periods are stable with minor fluctuations, maintaining steady supplier relationships across the time span analyzed.
Turnover Ratios
Average No. Days
Inventory Turnover
Colgate-Palmolive Co., inventory turnover 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) | |||||||||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||
| Inventories | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Inventory turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Inventory Turnover, 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
Inventory turnover
= (Cost of salesQ2 2023
+ Cost of salesQ1 2023
+ Cost of salesQ4 2022
+ Cost of salesQ3 2022)
÷ Inventories
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals important trends in cost of sales, inventories, and inventory turnover for the company over the period from March 2018 to June 2023.
- Cost of Sales
- The cost of sales exhibited a generally upward trajectory across the observed quarters. Starting at 1,594 million USD in March 2018, the value showed moderate fluctuations through 2018 and 2019, mostly maintaining a range between 1,550 and 1,850 million USD. A notable increase is observed from early 2020, where despite some variability, the cost of sales rose from approximately 1,600 million USD to over 2,000 million USD by June 2023. This indicates rising expenses related to producing goods or services, possibly reflecting increased sales volume, inflationary pressures, or changes in product mix.
- Inventories
- Inventories demonstrated a trend of consistent growth throughout the entire period. From around 1,312 million USD in March 2018, inventories decreased slightly in the first half of 2018 but then steadily increased, reaching a peak of around 2,110 million USD by March 2023 before a small decline to about 2,039 million USD in June 2023. This accumulation suggests either stockpiling in expectation of higher demand, increased production, or perhaps slower inventory turnover towards the later periods.
- Inventory Turnover
- The inventory turnover ratio, available from March 2019 onwards, illustrates a declining trend over time. Starting at 5.05 in March 2019, it gradually decreased through subsequent quarters to reach around 3.72 by March 2023, before a slight recovery to 3.95 in June 2023. This decline in turnover ratio implies that inventory was being sold or used less frequently over the examined interval, which could signal slower sales relative to inventory levels or increased inventory holdings.
Combining these observations, the trends suggest that the company experienced increasing costs of goods sold alongside a buildup of inventory levels and slower turnover rates. The rising cost of sales alongside growing inventories indicates growing operational scale or higher input costs. However, the reduced inventory turnover ratio could point to less efficient inventory management or weakening sales velocity relative to inventory growth. These insights may prompt further review of inventory management policies and cost control strategies to optimize working capital and operational efficiency.
Receivables Turnover
Colgate-Palmolive Co., receivables turnover 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) | |||||||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||
| Receivables, net of allowances | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Receivables turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Receivables Turnover, 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
Receivables turnover
= (Net salesQ2 2023
+ Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022)
÷ Receivables, net of allowances
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The quarterly financial data over the observed period reveals several notable patterns and trends across net sales, receivables, and receivables turnover. These insights can support an understanding of operational performance and working capital management.
- Net Sales
-
Net sales demonstrate a general upward trend from March 31, 2018 through June 30, 2023. Starting at approximately $4,002 million in early 2018, sales fluctuated slightly within a narrow range before experiencing consistent growth from late 2019 onwards.
The period following the first quarter of 2020 shows a notable acceleration in sales figures, increasing from $4,097 million in March 2020 to $4,822 million by June 2023. This suggests improved market demand or successful sales initiatives during this timeframe.
Seasonal variations appear present but less pronounced as the quarters progress, with fourth quarter values generally higher than their immediate preceding quarters, indicating possible seasonality in consumer purchasing behaviors.
- Receivables, net of allowances
-
Receivables exhibit more variability compared to sales. Initial values decrease from $1,644 million in March 2018 to a low near $1,231 million in June 2020, perhaps reflecting tightened credit policies or improved collections during that period.
Following mid-2020, receivables generally increase again, reaching $1,656 million by June 2023. This rise could be aligned with the growth in sales volume, implying expanded credit sales or extended payment terms.
Episodes of decline and recovery in receivables suggest active management of accounts receivable and responsiveness to changing market or economic conditions.
- Receivables Turnover Ratio
-
The receivables turnover ratio indicates how efficiently the company collects its receivables. The ratio is missing in early periods but available from September 2018 onward, ranging between approximately 9.69 and 13.43 times per year.
There is an observable improvement in turnover from late 2019 through 2021, peaking near 13.43 in September 2021, suggesting enhanced collection effectiveness or shorter receivables cycles during this time frame.
Subsequent fluctuations show turnover decreasing somewhat but remaining relatively stable around 11 to 12 times towards mid-2023. This stability may indicate a consistent credit collection process despite the increase in receivables balances.
Overall, the data reveals that net sales growth has been steady, particularly after early 2020, coinciding with an eventual increase in receivables. Meanwhile, the receivables turnover ratio suggests effective management of credit and collections, with periods of efficiency gains followed by stable maintenance. This combination points to balanced growth with attention to working capital optimization.
Payables Turnover
Colgate-Palmolive Co., payables turnover 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) | |||||||||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||
| Accounts payable | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Payables turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Payables Turnover, 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
Payables turnover
= (Cost of salesQ2 2023
+ Cost of salesQ1 2023
+ Cost of salesQ4 2022
+ Cost of salesQ3 2022)
÷ Accounts payable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data indicates several notable trends in the cost of sales, accounts payable, and payables turnover ratio over the period examined.
- Cost of Sales
- The cost of sales figures exhibit a generally increasing trend from March 31, 2018, through June 30, 2023. Starting at approximately 1,594 million US dollars in early 2018, the cost fluctuates modestly within a range until 2020. Beginning in 2020, there is a more consistent upward movement, reaching over 2,000 million US dollars in early 2023. This upward trend suggests rising expenses associated with the production or procurement of goods over time.
- Accounts Payable
- Accounts payable values demonstrate variability but also show an overall upward bias across the reported quarters. From about 1,209 million US dollars in early 2018, values fluctuate with some periods of decline and increase, notably rising to approximately 1,609 million US dollars by mid-2023. This pattern suggests that the company is maintaining or increasing its short-term obligations to suppliers, which may be aligned with the growth in cost of sales.
- Payables Turnover Ratio
- The payables turnover ratio remains relatively stable, fluctuating in a narrow range between approximately 4.5 and 5.5 throughout the available data. Initial values around 5.17 in early 2019 show minor oscillations without a clear upward or downward trend by mid-2023, with the ratio near 5.22. This stability implies consistent payment behavior to suppliers relative to the cost of sales, indicating the company is maintaining its payment cycles over the periods analyzed.
Overall, the pattern of growing cost of sales coincides with an increase in accounts payable, reflecting expanded business operations or rising input costs. The steady payables turnover ratio signifies that despite these changes, supplier payment efficiency and credit terms have remained largely consistent.
Working Capital Turnover
Colgate-Palmolive Co., working capital turnover 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 | |||||||||||||||||||||||||||||
| Less: Current liabilities | |||||||||||||||||||||||||||||
| Working capital | |||||||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Working capital turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Working Capital Turnover, 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
Working capital turnover
= (Net salesQ2 2023
+ Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable fluctuations and trends across key metrics over the observed periods.
- Working Capital
- The working capital demonstrates considerable volatility throughout the periods. Starting from a positive value of 312 million USD in March 2018, it experiences several decreases and increases, with a marked decline into negative territory beginning in March 2020 (-195 million USD), reaching its lowest in June 2020 (-368 million USD). Subsequently, a recovery trend is observable, with working capital returning to positive figures by March 2021 and further increasing to a peak of 1109 million USD by December 2022. The latest quarters show a slight reduction but remain robust above 800 million USD.
- Net Sales
- Net sales display a general upward trajectory with minor fluctuations. Initial sales were around 4,002 million USD in March 2018, maintaining relative stability throughout 2018 and 2019, fluctuating between approximately 3,800 and 4,000 million USD. From 2020 onwards, despite an initial dip likely influenced by external factors, there is a consistent increase in net sales, culminating in 4,822 million USD by June 2023. This suggests positive sales momentum and potential market growth or improved operational efficiency over the recent years.
- Working Capital Turnover
- The working capital turnover ratio exhibits highly erratic behavior. Recorded values vary from as low as 16.2 in September 2022 to an exceptionally high figure of 696.58 in March 2021. The ratio lacks continuity in some quarters due to missing data, limiting detailed longitudinal analysis. However, spikes in turnover correspond with periods where working capital was low or recovering from negative values, indicating a relationship between turnover efficiency and working capital levels. The fluctuations suggest variable efficiency in utilizing working capital relative to net sales over time.
Overall, the data reflects a company navigating through periods of financial strain, particularly evidenced by negative working capital values around early 2020, followed by a strong recovery phase. Net sales have steadily improved, reinforcing revenue growth despite temporary volatility. The working capital turnover ratio’s inconsistency indicates potential challenges in working capital management or temporary efficiencies during recovery periods. Continuous monitoring and strategic management of working capital could enhance operational performance in the future.
Average Inventory Processing Period
Colgate-Palmolive Co., average inventory processing period 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 | |||||||||||||||||||||||||||||
| Inventory turnover | |||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average inventory processing period1 | |||||||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Inventory Processing Period, 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
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Inventory turnover
- The inventory turnover ratio demonstrates a declining trend over the examined periods. Beginning at 5.05 in the first quarter of 2019, the ratio gradually decreases, reaching its lowest point around 3.62 by the third quarter of 2022. Subsequently, a modest recovery is observed, with the ratio rising to 3.95 by the second quarter of 2023. This pattern suggests a reduction in the frequency of inventory cycles over time, indicating slower inventory movement or increased inventory levels relative to sales.
- Average inventory processing period
- The average inventory processing period, expressed in days, exhibits an increasing trend, inversely related to the inventory turnover ratio. Starting near 72 days in the first quarter of 2019, the period lengthens steadily to a peak of 101 days in the third quarter of 2022. Following this peak, a slight contraction occurs, reducing the processing period to 92 days by the second quarter of 2023. This elongation of the inventory processing period is consistent with slower inventory turnover, implying that inventory remains on hand for longer durations before being sold or used.
- Overall insights
- The inverse relationship between the inventory turnover ratio and the average inventory processing period is evident and aligns with expected inventory dynamics. The trends suggest that inventory management faced challenges in maintaining efficient turnover through the period from early 2019 to late 2022, possibly reflecting shifts in demand, supply chain constraints, or strategic decisions to hold increased inventory levels. The slight improvement in the latest quarters indicates potential efforts to enhance inventory management and operational efficiency.
Average Receivable Collection Period
Colgate-Palmolive Co., average receivable collection period 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 | |||||||||||||||||||||||||||||
| Receivables turnover | |||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average receivable collection period1 | |||||||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Receivable Collection Period, 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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The analysis of the receivables turnover ratio over the period from March 31, 2018, through June 30, 2023, reveals fluctuations within a range of approximately 9.7 to 13.4 times. Initially, the ratio shows a slight decline from 11.1 in March 2018 through September 2019, reaching a low near 9.7, followed by a notable increase peaking at 13.43 by September 2021. Subsequent periods demonstrate moderate variability, with the ratio stabilizing near the 11 to 12 range in recent quarters.
Concurrently, the average receivable collection period, expressed in days, exhibits an inverse relationship with the receivables turnover ratio as expected. The collection period starts around 33 days in early 2018, increases to a peak of 38 days by September 2018, then decreases to approximately 27 days by September 2021. Post-2021, the collection period shows some variability but remains mostly between 29 and 32 days.
- Receivables Turnover Ratio Trend
- After an early decline, the ratio improved significantly through 2021, indicating a faster turnover of receivables. The subsequent slight decrease and stabilization suggest a return to a more moderate pace in collection efficiency.
- Average Receivable Collection Period Trend
- The number of days required to collect receivables increased initially, signaling slower collections, but then consistently decreased to its lowest in late 2021. Since then, it has remained relatively stable with minor fluctuations, indicating maintained efficiency in receivables management.
- Relationship Between Metrics
- As anticipated, the collection period and turnover ratio show an inverse relationship, with periods of higher turnover corresponding to shorter collection days and vice versa.
- Recent Periods
- In the most recent quarters ending in 2023, the turnover ratio slightly declined, and the collection period increased marginally, indicating a slight easing in collection efficiency compared to the peak in 2021 but still within a reasonably efficient range.
Operating Cycle
Colgate-Palmolive Co., operating cycle calculation (quarterly data)
No. days
| 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 | |||||||||||||||||||||||||||||
| Average inventory processing period | |||||||||||||||||||||||||||||
| Average receivable collection period | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Operating cycle1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Operating Cycle, 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
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period demonstrates a generally increasing trend over the analysis period. Starting at 72 days in March 2019, it gradually rises each quarter, reaching a peak of 101 days in September 2022. After this peak, a slight decline occurs, bringing the period down to 92 days by June 2023. The lengthening inventory processing time suggests a slower turnover rate, which could indicate either growing inventory levels or slower sales fulfillment during this timeframe.
- Average Receivable Collection Period
- The average receivable collection period shows moderate fluctuations but remains relatively stable around the low 30-day range. Initially, in March 2019, the period stands at 33 days, experiences some minor variations with a temporary dip to a low of 27 days in December 2021, and then settles again around 31-32 days towards the middle of 2023. This consistency indicates steady credit management and efficient collection practices throughout the periods observed.
- Operating Cycle
- The operating cycle, which combines inventory processing and receivable collection periods, mirrors the pattern seen in inventory holding times, with a general upward trend across the timeframe. Starting from 105 days in March 2019, it rises steadily to approximately 130 days by the end of 2022, indicating an overall lengthening of the time required to convert inventory and receivables into cash. This lengthening suggests that the company's cash conversion process has slowed, primarily influenced by the extended inventory processing period rather than changes in receivable collection.
Average Payables Payment Period
Colgate-Palmolive Co., average payables payment period 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 | |||||||||||||||||||||||||||||
| Payables turnover | |||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average payables payment period1 | |||||||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Payables Payment Period, 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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover Ratio
- The payables turnover ratio exhibits some fluctuations over the observed periods, generally ranging between approximately 4.5 and 5.5. Initially, it increased slightly from 5.17 in March 2019 to 5.32 in December 2019, reflecting a marginal improvement in the frequency of payables settlement. During 2020, the ratio remained relatively stable around the low 5 range but experienced a notable decline to 4.63 in March 2021, suggesting a slower turnover of payables at that time. Afterward, it rebounded gradually, climbing back to approximately 5.47 by December 2021. The ratio experienced a mild decline throughout 2022, hovering near 4.9 to 5.0, before rising again to 5.22 by June 2023. Overall, while showing some short-term volatility, the payables turnover ratio maintains a consistent moderate level, indicating a generally stable but slightly varying frequency in settling payables over the years.
- Average Payables Payment Period (Days)
- The average payables payment period tends to move inversely to the payables turnover ratio, as expected. In early 2019, the period stayed close to 69-71 days, implying that the company took approximately 70 days on average to settle its payables. This metric saw an increase in early 2021, reaching a peak of 79 days in March 2021, indicating a longer duration for payments relative to earlier periods. Post this peak, there was a decline in the payment period down to a minimum of 67 days in December 2021, suggesting a faster payment cycle. The period increased again in 2022, oscillating between 74 and 81 days, before reducing slightly towards mid-2023, where it reached 70 days, aligning closely with the earlier levels seen in 2019. These variations reflect periodic adjustments in the company's payment policies or cash flow management practices over time.
- Summary of Trends
- The data indicates cyclical fluctuations in both the payables turnover ratio and the average payment period, which maintain a generally inverse relationship. Periods of increased payables turnover correspond to shorter payment days and vice versa. Notably, there is a significant elongation in payment periods around early 2021 followed by a return to more moderate levels by mid-2023, suggesting that payment practices or external factors affecting payables management underwent temporary changes during this timeframe. Despite these fluctuations, the overall trends suggest that payables management remains within a relatively stable operational range over the five-year horizon.
Cash Conversion Cycle
Colgate-Palmolive Co., cash conversion cycle calculation (quarterly data)
No. days
| 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 | |||||||||||||||||||||||||||||
| Average inventory processing period | |||||||||||||||||||||||||||||
| Average receivable collection period | |||||||||||||||||||||||||||||
| Average payables payment period | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Cash conversion cycle1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Cash Conversion Cycle, 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 conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data indicates distinct trends and fluctuations in the company's working capital management metrics over the observed periods.
- Average Inventory Processing Period
- This metric shows a generally increasing trend from the initial available data point in March 2019, where it stands at 72 days, rising to a peak of 101 days by the third quarter of 2022. After this peak, a slight decline is observed toward the second quarter of 2023, ending at 92 days. This upward movement suggests a lengthening in the time taken to process inventory, which might point to slower inventory turnover or extended holding periods.
- Average Receivable Collection Period
- The receivable collection period exhibits relatively stable behavior with minor fluctuations. Beginning at 33 days in March 2019, it experiences some variation, dropping to as low as 27 days in the fourth quarter of 2021, and fluctuating around the low 30s in subsequent quarters. This stability indicates that the company's efficiency in collecting receivables has remained consistent, without significant deterioration or improvement.
- Average Payables Payment Period
- This metric reflects a moderate variation throughout the period. Starting near 71 days in March 2019, it declines gradually to around 67 days by the fourth quarter of 2021, then increases again to a peak of 81 days in the second quarter of 2022, before decreasing to approximately 70 days by mid-2023. These oscillations imply changes in payment policies or supplier negotiations, with periods of extended payment terms followed by tightening.
- Cash Conversion Cycle
- The cash conversion cycle demonstrates a fluctuating pattern with several peaks and troughs. It starts at 34 days in March 2019, climbing steadily to a high of 56 days between the third quarter of 2022 and the first quarter of 2023, before showing a slight decrease to 54 days by mid-2023. The overall increase in the conversion cycle suggests a lengthening in the time between cash outflows and inflows, potentially affecting liquidity and requiring careful management.
In summary, the data reveals a trend toward extended inventory processing times and a longer cash conversion cycle over the observed quarters, while receivable collection remains steady and the payables payment period experiences variability. These patterns could reflect operational adjustments, supply chain dynamics, or strategic changes impacting working capital efficiency.