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Procter & Gamble Co. (PG)
Analysis of Short-term (Operating) Activity Ratios
Beginner level
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)
Procter & Gamble Co., short-term (operating) activity ratios
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
Short-term activity ratio | Description | The company |
---|---|---|
Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Procter & Gamble Co.’s inventory turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Receivables turnover | An activity ratio equal to revenue divided by receivables. | Procter & Gamble Co.’s receivables turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Procter & Gamble Co.’s payables turnover ratio decreased from 2017 to 2018 and from 2018 to 2019. |
Working capital turnover | An activity ratio calculated as revenue divided by working capital. |
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. | Procter & Gamble Co.’s number of days of inventory outstanding improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
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. | Procter & Gamble Co.’s operating cycle improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
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. | Procter & Gamble Co.’s number of days of payables outstanding increased from 2017 to 2018 and from 2018 to 2019. |
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. | Procter & Gamble Co.’s cash conversion cycle improved from 2017 to 2018 and from 2018 to 2019. |
Inventory Turnover
Procter & Gamble Co., inventory turnover calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
1 2019 Calculation
Inventory turnover = Cost of products sold ÷ Inventories
= ÷
=
Short-term activity ratio | Description | The company |
---|---|---|
Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Procter & Gamble Co.’s inventory turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Receivables Turnover
Procter & Gamble Co., receivables turnover calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
1 2019 Calculation
Receivables turnover = Net sales ÷ Accounts receivable
= ÷
=
Short-term activity ratio | Description | The company |
---|---|---|
Receivables turnover | An activity ratio equal to revenue divided by receivables. | Procter & Gamble Co.’s receivables turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Payables Turnover
Procter & Gamble Co., payables turnover calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
1 2019 Calculation
Payables turnover = Cost of products sold ÷ Accounts payable
= ÷
=
Short-term activity ratio | Description | The company |
---|---|---|
Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Procter & Gamble Co.’s payables turnover ratio decreased from 2017 to 2018 and from 2018 to 2019. |
Working Capital Turnover
Procter & Gamble Co., working capital turnover calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
1 2019 Calculation
Working capital turnover = Net sales ÷ Working capital
= ÷
=
Short-term activity ratio | Description | The company |
---|---|---|
Working capital turnover | An activity ratio calculated as revenue divided by working capital. |
Average Inventory Processing Period
Procter & Gamble Co., average inventory processing period calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
1 2019 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
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. | Procter & Gamble Co.’s number of days of inventory outstanding improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Average Receivable Collection Period
Procter & Gamble Co., average receivable collection period calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
1 2019 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
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
Procter & Gamble Co., operating cycle calculation, comparison to benchmarks
No. days
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
1 2019 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= +
=
Short-term activity ratio | Description | The company |
---|---|---|
Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Procter & Gamble Co.’s operating cycle improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019. |
Average Payables Payment Period
Procter & Gamble Co., average payables payment period calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
1 2019 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
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. | Procter & Gamble Co.’s number of days of payables outstanding increased from 2017 to 2018 and from 2018 to 2019. |
Cash Conversion Cycle
Procter & Gamble Co., cash conversion cycle calculation, comparison to benchmarks
No. days
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
1 2019 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= +
–
=
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. | Procter & Gamble Co.’s cash conversion cycle improved from 2017 to 2018 and from 2018 to 2019. |