Procter & Gamble Co. (NYSE:PG)

Inventory Turnover

Inventory turnover displayed a decreasing trend from 6.41 to 5.30 over the observed period. This indicates a gradual slowdown in the rate at which inventory is sold and replaced. Lower turnover ratios suggest that inventory is being held longer, which is confirmed by increasing average inventory processing periods.

Receivables Turnover

Receivables turnover showed variability but a general decline from 16.98 to approximately 13.09 by the end of the period. This decline implies that the company is collecting receivables more slowly, as evidenced by the corresponding increase in the average receivable collection period from 21 to 28 days.

Payables Turnover

Payables turnover remained relatively stable with some fluctuations, moving around the 2.7 to 3.11 range and trending slightly downward toward the end. This suggests that the company’s rate of paying suppliers has not changed drastically but may be slightly elongating, as the average payables payment period fluctuated but sometimes increased to above 135 days.

Average Inventory Processing Period

The average inventory processing period steadily increased from 57 days to 69 days, indicating inventory is retained longer before sale. This aligns with the declining inventory turnover ratio, suggesting potential inventory management challenges or shifts in sales dynamics.

Average Receivable Collection Period

The average receivable collection period increased from 21 to 28 days, implying a slower collection of accounts receivable. This could affect cash flow as more funds are tied up in receivables.

Operating Cycle

The operating cycle showed a generally increasing trend from 78 to 97 days. This reflects an elongation in the time taken to convert inventory and receivables into cash, likely due to longer inventory and receivables periods.

Average Payables Payment Period

The average payables payment period fluctuated between 117 and 137 days, with periods of elongation. This extended payment period may be a strategy to manage working capital by deferring cash outflows.

Cash Conversion Cycle

The cash conversion cycle remained negative throughout and showed considerable fluctuations, moving from around -47 days to -40 days. The negative values indicate that the company collects cash from sales and extends payables faster than it pays its suppliers, which is beneficial for liquidity. However, the cycle’s reduction in negativity toward the later periods hints at a possible tightening in this advantage.

The financial data reveals several trends in the cost of products sold, inventory levels, and inventory turnover over multiple quarters from 2019 through projected periods in 2025.

Cost of Products Sold

The cost of products sold exhibits a general upward trend from late 2019 through the end of 2022, with values increasing from approximately 8,723 million USD to peaks exceeding 10,800 million USD. Following this period, the cost demonstrates moderate fluctuations but tends to decline slightly towards the later years, showing some volatility in costs through 2025 with figures oscillating around the 10,000 million USD mark. This pattern suggests varying cost pressures possibly related to production, supply chain, or pricing strategies.

Inventories

Inventory balances also show a rising trend initially, growing from around 5,465 million USD in late 2019 to above 7,500 million USD in 2022, indicating accumulation of stock or strategic inventory buildup. After reaching this peak, inventory levels stabilize with some fluctuations but generally remain in the range of approximately 7,000 to 7,800 million USD through the forecasted years up to 2025. This steadiness could reflect improved inventory management or alignment with sales expectations.

Inventory Turnover

The inventory turnover ratio, which measures how efficiently inventory is sold and replaced, is available starting in early 2020 and shows a slight decreasing trend over the periods analyzed. The ratio starts around 6.41 and gradually decreases to approximately 5.30 by late 2025. This reduction may indicate a slower rate of inventory movement or a relative increase in inventory levels compared to cost of goods sold. A declining turnover ratio suggests caution, as it could imply excess inventory or lower sales velocity.

Net Sales

The net sales demonstrate fluctuations over the periods examined. Initially, there is an upward trend from 17,798 million to 19,745 million US$ between September 2019 and December 2020. This is followed by a decline to 18,109 million in March 2021. Subsequently, net sales generally recover with some volatility, reaching higher points such as 21,953 million in December 2021 and again peaking at 22,386 million in September 2025. However, intermittent decreases are observed, for example in March 2022 and March 2024, indicating variability in sales performance over time. Overall, the trend captures moderate growth with cyclical variations.

Accounts Receivable

Accounts receivable display a fluctuating but generally increasing pattern throughout the reported quarters. Starting at 5,143 million US$ in September 2019, there is a decrease to a low of 4,178 million by June 2020, followed by periodic rises and falls. Notably, receivables increase significantly after June 2021, consistently remaining above 5,000 million and reaching a peak of 6,487 million by September 2025. This trend may reflect changes in credit policies, sales terms, or collection efficiency.

Receivables Turnover Ratio

The receivables turnover ratio shows a general declining trend from 16.98 at March 2020 to about 13.09 by September 2025. This diminishing ratio suggests a gradual slowdown in the rate at which receivables are collected relative to sales. The initial higher ratios indicate faster collection earlier in the period, whereas the lower ratios toward the end could hint at increasing collection periods or changes in credit management practices. Despite some minor fluctuations, the ratio consistently trends downward.

Cost of Products Sold

The cost of products sold demonstrates a generally upward trend from September 2019 through December 2022, increasing from $8,723 million to a peak of approximately $10,897 million. Following this peak, there is a fluctuation with some periods showing declines and others showing increases, but overall the values remain elevated relative to the earlier periods. From December 2022 to September 2025, the cost remains around the $10,000 million mark, with a slight decrease observed in some interim quarters before rising again toward the end of the period analyzed.

Accounts Payable

Accounts payable shows a gradual increase over the entire timeframe from $10,951 million in September 2019 to $15,609 million by September 2025. There is a notable rise during mid-2020, where payables increase sharply and continue an upward trajectory with some fluctuations. Although some quarters record minor drops, the overall direction is an increase in payables, suggesting extended payment terms or greater procurement volume over the periods assessed.

Payables Turnover Ratio

The payables turnover ratio presents some variability but generally hovers around an average range between 2.7 and 3.1 throughout the period from March 2020 to September 2025. Early in the period, the ratio peaks near 3.11 but tends to decline modestly afterward, particularly evident from 2023 onward, with some quarters registering rates closer to 2.66. This trend implies a slight deceleration in how frequently the company is paying off its suppliers, indicating an extension of payment cycle lengths or shifts in working capital management.

Overall Assessment

The data reveals that while the cost of products sold has generally increased over the years, accounts payable has also escalated, reflecting either an increase in purchasing activities or extended payment terms. The relatively stable yet slightly declining payables turnover ratio supports the interpretation of lengthening payment periods. These trends together suggest that the company may be managing its supplier payments with more flexibility during recent years, possibly as a response to operating conditions or cash flow optimization strategies. The fluctuations in cost of products sold point to variations in production costs, sales volume, or pricing dynamics throughout the analyzed quarters.

Working Capital

Working capital demonstrates significant volatility over the observed periods, with negative values throughout, indicating a persistent current liabilities excess relative to current assets. The figure improved somewhat from -8,328 million in September 2019 to -3,982 million by September 2020, suggesting an enhancement in short-term liquidity during that timeframe. However, subsequent periods exhibited deterioration, reaching a peak negative value of -16,880 million in December 2022, followed by a gradual recovery to -8,155 million by June 2025. This pattern indicates fluctuating liquidity management possibly influenced by varying operational or financing activities.

Net Sales

Net sales follow a generally upward trajectory with some fluctuations. Initial sales figures rose from approximately 17,798 million in September 2019 to a peak of 20,953 million in December 2021. Despite a mild decline during early 2022, sales rebounded steadily, reaching 22,386 million by September 2025. This indicates overall revenue growth, reflecting potentially increasing market demand or successful sales strategies. Seasonal or market-related variations are apparent given occasional dips and rebounds throughout the dataset.

Working Capital Turnover

The absence of data for working capital turnover ratios prevents detailed trend analysis or insights in this area. Without this ratio, it is challenging to evaluate the efficiency of the company in utilizing working capital to generate sales, which limits understanding of operational efficiency relative to working capital management.

Summary of Trends and Insights

The working capital figures suggest ongoing challenges with liquidity management, marked by a consistent negative position and considerable fluctuations. The improvement phases may reflect better control of short-term obligations but the significant dips imply periods of financial strain or aggressive working capital investment.

Net sales exhibit a generally positive growth trend over the five-year span, indicating expanding business volume or pricing power. Such growth, despite the liquidity constraints suggested by working capital, could imply effective revenue generation and market penetration capabilities.

The lack of turnover ratio data limits deeper analysis of operational effectiveness in converting working capital into sales revenue, an important metric for assessing overall financial health.

Inventory Turnover Trend

The inventory turnover ratio demonstrates a gradual declining trend over the observed periods starting from a peak of 6.41 and decreasing to 5.30 by the end. Initial values around 6.4 declined steadily to approximately 5.5 in later periods, indicating a slower rate of inventory being sold and replaced. This suggests that the company's inventory management efficiency may have diminished slightly over time.

Average Inventory Processing Period Trend

The average inventory processing period, expressed in number of days, shows an inverse relationship to the inventory turnover ratio, increasing from 57 days initially to 69 days towards the end of the timeline. This indicates that it is taking longer for the company to process inventory on average, corroborating the declining inventory turnover ratio.

Overall Insights

The data reflects a consistent pattern where inventory is being held for longer periods, resulting in decreased turnover frequency. This trend might point to challenges in inventory management, possible overstocking, or changes in demand. While the changes are moderate, the shift towards longer inventory cycles warrants attention to improve operational efficiency and working capital utilization.

The receivables turnover ratio exhibits a noticeable decline over the analyzed periods. Starting from a high point around 16.98, it drops to the range of approximately 13 to 14 in the later periods. This trend suggests a gradual decrease in the frequency at which receivables are collected within a year, indicating an elongation of the credit collection cycle.

Correspondingly, the average receivable collection period, measured in days, demonstrates an increasing trend. Initially, this figure approximates 21 days but shows an upward movement to around 27 to 28 days in the later quarters. This increase aligns inversely with the decline in receivables turnover, reflecting that customers are taking longer to settle their receivables.

Receivables Turnover Ratio

The ratio decreases from approximately 17 to around 13, indicating a slowdown in the speed of receivable collections.

Average Receivable Collection Period

The collection period extends from about 21 days initially to near 28 days, implying customers are delaying payments compared to earlier periods.

Overall, these trends suggest a weakening in receivables efficiency, which may have implications for cash flow management. It is important to monitor whether the lengthening collection periods are due to market conditions, credit policy changes, or other operational factors affecting customer payment behavior.

Inventory Processing Period

The average inventory processing period showed an overall increasing trend from 57 days in September 2020 to 69 days in September 2025. There were fluctuations along the timeline, with periods of relative stability around 60 to 65 days between 2020 and 2023, followed by a gradual increase thereafter. This indicates that the time taken to turn inventory into sales has been lengthening over the years.

Receivable Collection Period

The average receivable collection period exhibited a moderate upward trend, rising from 21 days in September 2020 to 28 days by September 2025. Despite some minor fluctuations, the collection period generally increased, suggesting that on average it is taking longer for the company to collect payments from customers.

Operating Cycle

The operating cycle, defined as the sum of inventory processing and receivable collection periods, increased from 78 days in September 2020 to 97 days in September 2025. The upward trend reflects the combined effects of increased inventory holding and receivable collection durations. This lengthening operating cycle could imply a slower conversion of resources into cash over the analyzed timeframe.

The payables turnover ratio exhibits fluctuations over the observed periods, indicating variability in how efficiently the company manages its accounts payable. Initially, the ratio increases from 2.92 to a peak of around 3.11, demonstrating an improvement in the rate at which the company pays off its suppliers during certain quarters. However, subsequent quarters show a moderate decline and stabilization in the ratio, settling closer to values between 2.66 and 2.93.

Correspondingly, the average payables payment period, which reflects the number of days taken on average to pay suppliers, displays an inverse pattern relative to the payables turnover ratio as expected. The payment period initially decreases from 135 days to around 120 days, showing that the company started to pay its payables more promptly. Over the subsequent quarters, this metric sees some variation but generally remains within a range of approximately 117 to 137 days, suggesting relative stability with some periods of extension in payment days.

Payables Turnover Ratio

Shows an improving trend from approximately 2.92 to a peak near 3.11, followed by a modest decline and stabilization near the 2.7 to 2.93 range.

Average Payables Payment Period

Initially reduces from about 135 days to approximately 120 days, indicating quicker payments, then fluctuates slightly but remains relatively stable in the range of 117 to 137 days thereafter.

Overall, the data suggests that the company has achieved some improvements in the efficiency of managing payables in early periods, followed by a period of relative consistency. There is no evidence of extreme volatility, but the slight increase in payment periods in later quarters could warrant monitoring to ensure it does not negatively impact supplier relationships or indicate emerging liquidity issues.

The financial data reveals several noteworthy trends related to the company's operational efficiency and cash flow management over the analyzed periods.

Average Inventory Processing Period

This metric shows a general upward trend, starting at 57 days and increasing gradually to 69 days by the end of the observed timeline. The slight fluctuations within this range suggest some variability in inventory turnover speed, with a peak around the later periods, indicating a longer duration to process inventory on average.

Average Receivable Collection Period

The receivable collection period presents a somewhat stable yet slightly increasing trend overall. Beginning near 21 days, it fluctuates modestly, reaching around 28 days towards the end of the data. This indicates that the company has experienced a mild lengthening in the time taken to collect receivables from customers, which may impact short-term liquidity.

Average Payables Payment Period

This period shows a generally steady pattern with values oscillating between 117 and 137 days. Notably, there are intermittent spikes, such as rising to 135 days and beyond, which suggest periods during which the company extended payment terms with suppliers. This extended payables cycle may be a strategic approach to preserve cash.

Cash Conversion Cycle

The cash conversion cycle remains negative throughout the data, ranging roughly from -47 days to -28 days, with occasional movements towards a less negative position. A negative cash conversion cycle indicates that the company receives cash from customers before it needs to pay its suppliers, contributing positively to cash flow. The trend shows some improvement with the cycle becoming less negative in certain periods but generally maintaining a cash efficient operation.

Overall, the data reflects a company managing its working capital with increasing inventory holding periods and slightly longer receivable collections, balanced by extended payables. The persistently negative cash conversion cycle underlines effective cash flow management despite these lengthening periods in inventory and receivables.