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)
Procter & Gamble Co., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30).
- Inventory Turnover
- The inventory turnover ratio exhibits a general declining trend over the observed periods. Starting from a higher level around 6.93 in late 2018, it gradually reduces to approximately 5.52 by early 2025. This suggests that inventory is being sold more slowly over time, indicating a potential decrease in inventory management efficiency or slower sales relative to inventory levels.
- Receivables Turnover
- Receivables turnover fluctuates modestly throughout the periods. Initial values are near 13.67 in late 2018, rising to a peak around 16.98 in late 2019, followed by some variability averaging around 13.5 to 15 in subsequent years. This reflects variability in how quickly receivables are collected, with some periods showing improved collections and others indicating slower conversion of receivables into cash.
- Payables Turnover
- The payables turnover ratio remains relatively stable, fluctuating slightly between approximately 2.66 and 3.37. There is a minor downward trend toward the latter periods, suggesting the company is taking slightly longer to pay its suppliers, which may influence cash flow management.
- Average Inventory Processing Period
- The average inventory processing period, measured in days, generally increases over time. From about 53 days in late 2018, it rises to approximately 66 days by early 2025. This trend aligns with the declining inventory turnover and indicates that inventory is held longer before being sold, potentially increasing holding costs.
- Average Receivable Collection Period
- The receivable collection period remains relatively stable, fluctuating narrowly between 21 and 28 days. This indicates consistent management of receivables with neither significant acceleration nor delays in customer payment collections.
- Operating Cycle
- The operating cycle, which combines inventory processing and receivable collection periods, shows moderate variability. Starting around 80 days, it increases to a peak near 93 days by early 2025. The gradual lengthening of the cycle reflects the extended period inventory is held, slightly offset by stable receivable collection.
- Average Payables Payment Period
- This metric reveals significant fluctuation from 108 days to about 137 days over the period. The upward shifts suggest that the company is extending the time taken to pay its suppliers, which might be a strategic decision to manage working capital, but could also affect supplier relationships.
- Cash Conversion Cycle
- The cash conversion cycle is consistently negative throughout the observed period, starting near -38 days and reaching around -37 days by early 2025, with variations between -28 and -53 days at different points. This negative value indicates that the company generally receives cash from customers before it needs to pay suppliers, which is a favorable liquidity position and suggests effective working capital management.
Turnover Ratios
Average No. Days
Inventory Turnover
Procter & Gamble Co., inventory turnover calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30).
1 Q3 2025 Calculation
Inventory turnover
= (Cost of products soldQ3 2025
+ Cost of products soldQ2 2025
+ Cost of products soldQ1 2025
+ Cost of products soldQ4 2024)
÷ Inventories
= ( + + + )
÷ =
The analysis of the quarterly financial data reveals several key trends related to the cost of products sold, inventories, and inventory turnover for the periods from late 2018 through early 2025.
- Cost of Products Sold
-
The cost of products sold demonstrates a generally upward trend over the analyzed period, beginning at approximately 8,484 million US dollars in September 2018 and showing fluctuations with intermittent increases and decreases. There is a notable rise towards the end of 2021, peaking in the range of approximately 10,365 to 10,664 million US dollars. Subsequently, the cost stabilizes around the 10,000 million US dollar range with some slight variation before slightly declining around 2024 and early 2025 to values below 10,000 million US dollars.
- Inventories
-
Inventories exhibit a steady increase from 5,182 million US dollars in September 2018 to a peak of approximately 7,590 million US dollars in late 2022. After reaching this peak, inventory levels fluctuate moderately but remain elevated relative to the earlier periods, generally maintaining a range between 7,000 and 7,400 million US dollars up to early 2025. This gradual increase suggests an accumulation in inventory holdings over time, possibly reflecting changes in operational or market conditions.
- Inventory Turnover Ratio
-
The inventory turnover ratio, available from March 2019 onwards, shows a decreasing trend from about 6.93 in early 2019 to values around 5.5 to 5.8 by early 2025. This decline in turnover ratio over time indicates that the company is turning over its inventory less frequently, which may suggest slower sales velocity or increasing inventory levels not matched by proportional increases in cost of products sold. The gradual reduction in inventory turnover could point to potential inefficiencies in inventory management or shifts in demand patterns.
In summary, over the examined period, the cost of products sold generally increased until 2021 and then showed signs of stabilization and slight decline. Inventories increased steadily, reaching higher levels from 2022 onwards, while the inventory turnover ratio experienced a gradual decline, indicating slower inventory movement relative to sales. These combined trends may warrant further analysis into inventory management practices and sales performance to optimize working capital and operational efficiency.
Receivables Turnover
Procter & Gamble Co., receivables turnover calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30).
1 Q3 2025 Calculation
Receivables turnover
= (Net salesQ3 2025
+ Net salesQ2 2025
+ Net salesQ1 2025
+ Net salesQ4 2024)
÷ Accounts receivable
= ( + + + )
÷ =
The analysis of the financial data reveals notable patterns and fluctuations across key metrics over the reported quarters.
- Net Sales
- Net sales exhibit a generally upward trend with pronounced seasonal variations, peaking frequently in the fourth quarter of each year. Beginning at 16,690 million US dollars in September 2018, sales increase to a high of 21,953 million US dollars by December 2024 before showing a slight decline in the subsequent quarter. The data indicate occasional dips during the first quarters, for instance in March 2020 and March 2024, suggesting potential periodic challenges or cyclical demand factors.
- Accounts Receivable
- The accounts receivable values fluctuate considerably, with some quarters showing sharp increases or decreases. Starting at 5,035 million US dollars in September 2018, the figure rises and falls over the years, reaching peaks such as 6,334 million US dollars in December 2023. There is evidence of occasional declines, for example, between June 2019 and June 2020, indicating potential variations in credit policies, collection efficiencies, or customer payment behaviors. The general trend points to an increase in receivables over time, consistent with rising net sales but with less smooth progression.
- Receivables Turnover Ratio
- The receivables turnover ratio data, though incomplete in the early periods, shows a range typically between approximately 13 and 16 over the reported quarters. This ratio experiences periodic fluctuations but generally remains stable, with values such as 13.67 in September 2018, rising to peaks like 16.98 in June 2020, and maintaining around 13.29 to 13.74 towards the end of the dataset. The pattern suggests consistent efficiency in converting receivables into cash, despite variable sales and receivable balances.
In summary, net sales have demonstrated consistent growth with typical seasonal influences, while accounts receivable have increased in nominal terms with variability that may reflect shifts in working capital management or market conditions. The receivables turnover ratio maintains relative stability, indicating relatively steady operational performance in credit and collection processes throughout the periods analyzed.
Payables Turnover
Procter & Gamble Co., payables turnover calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30).
1 Q3 2025 Calculation
Payables turnover
= (Cost of products soldQ3 2025
+ Cost of products soldQ2 2025
+ Cost of products soldQ1 2025
+ Cost of products soldQ4 2024)
÷ Accounts payable
= ( + + + )
÷ =
The analysis of the quarterly financial data reveals several notable trends in cost of products sold, accounts payable, and payables turnover ratios over the observed period.
- Cost of products sold
- This item exhibits fluctuations within a range approximately between 8,400 and 10,900 million US dollars. Starting at 8,484 million in September 2018, the cost increases slightly and shows periodic rises and falls. A general upward trend is identifiable from mid-2020 to late 2022, peaking at 10,897 million in the third quarter of 2022. Subsequently, there is a gradual decline toward the end of 2024, with values falling back to approximately 9,694 million by the last recorded quarter.
- Accounts payable
- Accounts payable values show a progressive increase over the entire period. Starting from 10,243 million in September 2018, there is an observable rising trajectory with some periods of stabilization or minor decline. The highest recorded level appears around 15,364 million in the fourth quarter of 2024, marking an overall increasing trend in short-term liabilities related to payables.
- Payables turnover ratio
- Payables turnover demonstrates relative stability with some minor oscillations. Initially, data is unavailable, but beginning from March 2019, the ratio fluctuates mostly between 2.7 and 3.3. Notable peaks occur in mid-2019 with a turnover near 3.37, followed by a dip to around 2.7 in late 2020 and 2021. The trend reflects some variability in how quickly the company pays off its suppliers, with turnover dropping slightly in the latest quarters to values near 2.66 before a modest recovery.
Overall, the increase in accounts payable alongside moderately fluctuating cost of products sold may suggest changes in payment policies or supplier credit terms. The relatively stable but slightly declining payables turnover at times indicates varying efficiency in managing obligations to suppliers. The data points to a complex interplay between cost management and working capital dynamics over the evaluated quarters.
Working Capital Turnover
Procter & Gamble Co., working capital turnover calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30).
1 Q3 2025 Calculation
Working capital turnover
= (Net salesQ3 2025
+ Net salesQ2 2025
+ Net salesQ1 2025
+ Net salesQ4 2024)
÷ Working capital
= ( + + + )
÷ =
The financial data over the quarterly periods reveals several notable trends in working capital and net sales performance.
- Working Capital
- The working capital figures show considerable volatility and a generally negative trajectory throughout the period. Starting at -5,874 million USD in September 2018, the value moved further into negative territory, reaching a low of -16,880 million USD in December 2022. This indicates an increasing gap between current assets and current liabilities, suggesting that the company may have faced growing short-term liquidity constraints or invested significantly in current liabilities relative to current assets. Although fluctuations are evident, the working capital remains largely negative, with some partial recoveries observed in 2023, rising from -15,725 million USD in September 2022 to -9,818 million USD in December 2023, before dipping again in 2024.
- Net Sales
- Net sales demonstrate a more stable and generally positive trend. Beginning at 16,690 million USD in September 2018, net sales increased steadily, peaking at 21,882 million USD in December 2024. Despite some quarterly fluctuations, the overall trend is upward, which indicates sustained revenue growth. Periods such as late 2019 and late 2022 show particularly strong sales figures, highlighting possible seasonal or market-driven spikes. A slight dip is noted in the first quarter of 2025, with sales dropping to 19,776 million USD, potentially signaling changes in demand or market conditions.
- Relationship and Insights
- The divergence between the worsening working capital and the improving net sales suggests differing dynamics in operational efficiency and liquidity management. The increasing sales figures imply successful revenue generation, while the persistently negative and declining working capital could point to challenges in managing short-term obligations or inventory. This disparity may necessitate a closer examination of cash flow management, receivables, payables, and inventory turnover to ensure sustainable operations.
- Missing Data
- The working capital turnover ratio is not provided, precluding direct analysis of how efficiently the company utilizes working capital to generate sales. This ratio would have offered added insight into operational performance relative to working capital management.
Average Inventory Processing Period
Procter & Gamble Co., average inventory processing period calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30).
1 Q3 2025 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
- Inventory turnover ratio
- The inventory turnover ratio shows a general declining trend over the observed periods. Starting at 6.93 in September 2018, it decreases gradually and fluctuates between approximately 5.52 and 6.61 thereafter. The ratio indicates a mild deterioration in inventory efficiency, with turnover ratios mostly remaining below 6 in the latter part of the timeline. This decline suggests that inventory is being turned over less frequently relative to the earlier period.
- Average inventory processing period (number of days)
- The average inventory processing period exhibits an increasing trend over time, moving from 53 days in September 2018 to peaks around 65 days in multiple later quarters. The period fluctuates but generally remains around or above 60 days following mid-2019. This indicates that inventory is being held longer on average before it is processed or sold, which aligns inversely with the declining inventory turnover ratio. The lengthening of the processing period could signal reduced demand velocity or changes in inventory management strategies.
Average Receivable Collection Period
Procter & Gamble Co., average receivable collection period calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30).
1 Q3 2025 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
The receivables turnover ratio demonstrates some variability over the observed periods, without a uniform upward or downward trend. Initial data entries are absent until the quarter ending in March 2019, after which the ratio ranges mostly between approximately 13 and 16. The ratio peaked at around 16.98 in September 2020, indicating a higher frequency of receivables being collected during this period. Following this peak, the ratio experienced fluctuations but generally remained near the lower to mid-teens, with a slight declining tendency toward the later quarters, dipping to approximately 13.29 in December 2024 before a modest increase again by March 2025.
The average receivable collection period mirrors the turnover ratio inversely, as expected, indicating the number of days it takes on average to collect receivables. This metric stabilizes around 27 days in the earlier recorded quarters (starting from March 2019), decreases to a low of about 21 days in September 2020, which corresponds to the turnover peak, and then fluctuates mostly within the range of 23 to 27 days thereafter. In the most recent periods, the collection period has consistently remained near 27 days, indicating a stable collection efficiency over the latter quarters.
- Receivables Turnover Ratio
- Varied between approximately 13 and 17, with the highest turnover seen in September 2020, suggesting quicker collections during that time.
- Exhibited slight decline trends towards the end of the period with values around 13.29 to 13.67.
- The turnover reflects moderate fluctuations without a decisive long-term increase or decrease.
- Average Receivable Collection Period
- Generally maintained around 27 days, with a shortened collection period of around 21 days during the peak turnover period in late 2020.
- Subsequently fluctuated between 23 and 27 days but has shown consistency in recent quarters near 27 days.
- The stable collection period indicates a consistent cash conversion performance after late 2020.
Overall, the data suggests a period of enhanced receivables management in late 2020, as evidenced by the higher turnover and reduced collection days, followed by a return to more normalized and stable levels. The company appears to maintain a consistent collection efficiency within a range of about three to four weeks over the latest periods assessed.
Operating Cycle
Procter & Gamble Co., operating cycle calculation (quarterly data)
No. days
Based on: 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30).
1 Q3 2025 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
The analysis of the quarterly financial indicators reveals several noteworthy trends over the observed period. The average inventory processing period has generally exhibited an upward trajectory with some fluctuations. Starting from approximately 53 days in the earlier quarters, this metric increased steadily to reach around 65 days in the later quarters. This suggests a gradual lengthening in the time inventory remains on hand before being processed or sold, indicating potential changes in inventory management or demand patterns.
Conversely, the average receivable collection period shows less pronounced variability, maintaining a range mostly between 21 and 28 days. This relative stability suggests consistent performance in the company's credit and collections processes, with only minor fluctuations, indicating effective management of accounts receivable without significant deterioration in collection efficiency.
The operating cycle, which encompasses both inventory processing and receivable collection periods, reflects combined effects of the above trends. It has exhibited an overall increasing pattern from approximately 80 days to around 90 days or more, with some short-term fluctuations. The upward trend in the operating cycle signals a lengthening of the total time taken from acquiring inventory to collecting cash from sales, which may impact cash flow dynamics.
In summary, the elongation of the inventory period appears to be the primary driver behind the extended operating cycle. The relatively stable receivable collection period indicates no significant issues in credit management. The overall increase in operating cycle duration may warrant attention to inventory turnover efficiency and working capital management to optimize liquidity and operational effectiveness.
Average Payables Payment Period
Procter & Gamble Co., average payables payment period calculation (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30).
1 Q3 2025 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
The data reveals trends in the payables turnover ratio and the average payables payment period over multiple quarters. Analysis of these two metrics provides insights into the company's payment behavior and accounts payable management.
- Payables Turnover Ratio
-
The payables turnover ratio demonstrates fluctuations over the observed periods. Starting at a ratio of 3.09 in the second quarter of 2019, it increased slightly to 3.37 by the third quarter of 2019, indicating a faster rate of payment to suppliers during that time.
Subsequently, the ratio exhibited a declining trend, reaching a low of 2.7 during both the fourth quarter of 2020 and the first quarter of 2021. This suggests a slowdown in payment frequency during this timeframe.
Thereafter, the ratio oscillated moderately between approximately 2.7 and 3.11 from 2021 through mid-2023, displaying some variability but maintaining a general stability around a value of 3.0.
Beginning in late 2023, the ratio recorded a noticeable decrease to approximately 2.66 and remained at this lower level through the first quarter of 2025, signaling a deceleration in payables turnover and potentially longer payment durations to suppliers in this recent period.
- Average Payables Payment Period
-
The average number of days to pay payables exhibits an inverse pattern relative to the turnover ratio, consistent with typical financial relationships between these metrics.
Initially, the payment period decreased from 118 days in the second quarter of 2019 to 108 days in the third quarter of 2019, aligning with the rise in the turnover ratio observed during the same intervals.
Following this, there was a steady increase in the payment period, peaking at 135 days during both the fourth quarter of 2020 and the first quarter of 2021, which corresponds with the earlier noted dip in the turnover ratio.
Between 2021 and mid-2023, the payment period remained relatively stable with moderate fluctuations between approximately 120 and 130 days.
Towards the end of 2024 and into early 2025, the payment period increased to over 130 days, reaching 137 days in two instances. This lengthening of the payment period coincides with the recent decline in payables turnover, indicating a tendency toward slower payments.
Overall, the data suggests that the company experienced a phase of accelerated payments in mid-2019, followed by a period of slower payments and extended payment durations from late 2020 onward. While fluctuations exist, the recent trend points to a lengthening of the payment period and a decrease in payables turnover, potentially reflecting changes in cash management strategies or supplier payment terms.
Cash Conversion Cycle
Procter & Gamble Co., cash conversion cycle calculation (quarterly data)
No. days
Based on: 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30).
1 Q3 2025 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
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The analysis of the financial data over the observed periods reveals distinct trends in the company's operational efficiency, particularly reflected in the inventory processing, receivable collection, payable payment periods, and the overall cash conversion cycle.
- Average Inventory Processing Period
- This metric shows a generally increasing trend with some fluctuations. Starting at 53 days in September 2018, it rises gradually to peak values around 65 days by late 2024, indicating a lengthening in the time inventory remains before processing. Such an increase could suggest a buildup of stock or slower turnover which may impact liquidity.
- Average Receivable Collection Period
- The receivables collection period remains relatively stable throughout the timeline. Initially fluctuating narrowly between 21 and 27 days, it stays within this range consistently. This stability suggests effective management of accounts receivable with no significant deterioration in the speed of cash inflows from customers.
- Average Payables Payment Period
- The payables payment period exhibits notable variability but generally trends downward from 118 days in late 2018 to lower values around 120-130 days in subsequent years with occasional peaks at 135 and 137 days. This indicates some fluctuations in payment practices, possibly reflecting strategic shifts in managing supplier payments or responses to cash flow conditions.
- Cash Conversion Cycle
- The cash conversion cycle remains negative throughout the periods, which is indicative of a business model that receives cash from customers before obligations to suppliers are due. The cycle shows some volatility but trends towards a longer negative cycle over time, moving from around -38 days to peaks near -53 days and settling closer to -37 days by the latest periods. This suggests an efficient working capital cycle, though the increasing negative cycle implies the company might be extending the time between outflows and inflows to optimize liquidity.
Overall, the data illustrate that while the company is maintaining relatively stable receivable collection times and actively managing payables, it experiences a gradual increase in inventory processing duration. The consistently negative and fluctuating cash conversion cycle underscores an effective but dynamic management of operational cash flows. These patterns together may warrant closer monitoring of inventory strategies and payment terms to sustain liquidity and operational efficiency.