Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Procter & Gamble Co., liquidity ratios
Based on: 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 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).
- Current Ratio
- The current ratio exhibited a declining trend from 0.85 in mid-2020 to a low of 0.63 in mid-2023, indicating a decreasing short-term liquidity position during this period. However, a modest recovery occurred thereafter, reaching 0.73 in mid-2024 before slightly declining again to 0.70 in mid-2025. Overall, the ratio remained below 1.0 throughout, signaling potential challenges in covering short-term liabilities fully with current assets.
- Quick Ratio
- The quick ratio showed a consistent downward movement from 0.62 in mid-2020 to a trough of 0.37 in mid-2022. Following this, the ratio stabilized somewhat, inching up to 0.46 in mid-2024 before slightly decreasing to 0.44 in mid-2025. This pattern suggests a persistent tightening of highly liquid assets relative to current liabilities, with only minor improvements in recent years.
- Cash Ratio
- The cash ratio declined markedly over the analyzed timeframe, starting at 0.49 in mid-2020 and hitting its lowest point at 0.22 in mid-2022. Post-2022 saw a gradual increase to 0.28 by mid-2024, followed by a slight reduction to 0.27 in mid-2025. This indicates a reduction in the proportion of cash and cash equivalents available to cover current liabilities, with some recovery attempts but overall weaker cash liquidity.
Current Ratio
Procter & Gamble Co., current ratio calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 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).
1 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= 25,392 ÷ 36,058 = 0.70
- Current Assets
- Current assets demonstrated a general decline from 27,987 million USD in 2020 to a low of 21,653 million USD in 2022. Subsequently, there was a recovery with consistent increases, reaching 25,392 million USD by 2025. This indicates an improvement in short-term asset holdings after a period of contraction.
- Current Liabilities
- Current liabilities remained relatively stable from 2020 to 2022, fluctuating slightly around the 33,000 million USD mark. In 2023, there was a noticeable increase to 35,756 million USD, followed by a reduction in 2024 to 33,627 million USD, and then an increase again to 36,058 million USD in 2025. These movements suggest volatility in short-term obligations, with liabilities generally remaining high relative to assets.
- Current Ratio
- The current ratio consistently stayed below 1.0 throughout the period, indicating that current liabilities exceeded current assets at all points. The ratio declined from 0.85 in 2020 to a trough of 0.63 in 2023, reflecting worsening liquidity. A partial recovery occurred in 2024 to 0.73, followed by a slight decrease to 0.70 in 2025. Overall, the company’s liquidity position showed some improvement but remained below optimal levels, implying potential challenges in meeting short-term obligations.
- Summary
- The data reflects a period of tightening liquidity from 2020 through 2023, marked by decreasing current assets and stable to slightly increasing current liabilities, resulting in a declining current ratio. The subsequent period saw a rebound in current assets and fluctuating liabilities, leading to a marginal improvement in liquidity. Nevertheless, the current ratio remaining under 1.0 suggests ongoing liquidity constraints that may warrant attention.
Quick Ratio
Procter & Gamble Co., quick ratio calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 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).
1 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 15,741 ÷ 36,058 = 0.44
- Quick Assets and Current Liabilities
- The total quick assets demonstrated a declining trend from 20,359 million US dollars in mid-2020 to a low of 12,357 million in mid-2022. Following this, there was a recovery phase with an increase to 15,741 million by mid-2025. In contrast, current liabilities showed a fluctuating but generally increasing pattern, starting at 32,976 million in mid-2020, peaking at 35,756 million in mid-2023, then oscillating slightly to reach 36,058 million by mid-2025.
- Quick Ratio Analysis
- The quick ratio declined sharply from 0.62 in mid-2020 to a trough of 0.37 in mid-2022, indicative of a weakened immediate liquidity position during this period. Subsequently, the ratio improved moderately, rising to 0.46 by mid-2024 before slightly decreasing to 0.44 in mid-2025. This suggests a partial recovery in the company's ability to cover short-term obligations with liquid assets, though it remained below the initial 2020 level.
- Overall Insights
- The period under review shows initial liquidity tightening with a reduction in quick assets and a drop in the quick ratio, coupled with relatively stable to increasing current liabilities, reflecting potential short-term financial strain. Yet, from mid-2022 onwards, an upward adjustment in quick assets and an improving quick ratio indicate efforts toward strengthening liquidity. Despite these improvements, the quick ratio's lower levels compared to 2020 suggest cautious monitoring may be necessary to ensure sound short-term financial health.
Cash Ratio
Procter & Gamble Co., cash ratio calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 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).
1 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 9,556 ÷ 36,058 = 0.27
- Cash Assets Trend
- The total cash assets exhibited a declining trend from 16,181 million USD in June 2020 to 7,214 million USD in June 2022, marking a significant reduction over two years. Following this, cash assets showed a recovery, increasing moderately to 9,556 million USD by June 2025. This rebound indicates a stabilization and slight improvement in liquidity reserves after a period of depletion.
- Current Liabilities Pattern
- Current liabilities remained relatively stable from June 2020 through June 2022, hovering around 33,000 million USD. Starting in June 2023, they fluctuated moderately, rising to 35,756 million USD and then slightly decreasing to 33,627 million USD by June 2024, before again increasing to 36,058 million USD in June 2025. This suggests some variability in short-term obligations without a clear directional trend.
- Cash Ratio Analysis
- The cash ratio, reflecting the company's ability to cover current liabilities with cash assets, demonstrated a declining trend from 0.49 in June 2020 to a low of 0.22 in June 2022. Despite subsequent marginal improvements to 0.28 in June 2024, it decreased slightly to 0.27 by June 2025. Overall, the ratio remains below the initial level, indicating relatively tighter liquidity conditions in more recent periods compared to 2020.
- Summary Insight
- Over the analyzed period, the company experienced significant decreases in cash assets accompanied by relatively stable but fluctuating current liabilities, resulting in a lowered cash ratio. Although cash assets improved somewhat after 2022, the cash ratio did not fully recover, reflecting ongoing constraints in immediate liquidity. This pattern suggests a cautious approach to managing cash reserves against short-term obligations, possibly influenced by broader operational or market conditions.