Procter & Gamble Co. (NYSE:PG)

Inventory Turnover

The inventory turnover ratio shows a gradual declining trend from 6.41 in September 2020 to 5.45 by June 2025. There are intermittent minor fluctuations, but the overall pattern indicates a decrease in how frequently inventory is sold and replaced during the periods analyzed.

Receivables Turnover

Receivables turnover exhibits variability, starting at 16.98 in September 2020 and declining overall to approximately 13.63 by June 2025. Periodic rises and falls are observed, but the general trend points to a slower collection of receivables over time, reflecting extended credit terms or slower customer payments.

Payables Turnover

The payables turnover ratio fluctuates modestly between 2.66 and 3.11 across the analyzed quarters. There is no consistent upward or downward trend, indicating relative stability in the frequency of payments made to suppliers, although some temporary deviations suggest occasional changes in payment pacing.

Average Inventory Processing Period

This metric generally increases from 57 days in September 2020 to a peak of 67 days by June 2025. The steady growth in the average number of days inventory is held reflects slower inventory movement or longer storage periods.

Average Receivable Collection Period

The average receivable collection period increases from 21 days in September 2020 to around 27 days by June 2025. This reflects a trend toward longer times to collect outstanding customer payments, aligning with the declining receivables turnover.

Operating Cycle

The operating cycle lengthens from 78 days to about 94 days over the observed timeframe. This indicates the combined duration of inventory processing and receivable collection is extending, suggesting a slower conversion of resources into cash, potentially impacting liquidity.

Average Payables Payment Period

This period shows fluctuations between 117 and 137 days, without a clear directional trend. The variance suggests adjustments in the firm's payment terms or strategies to manage cash outflows, with occasional extensions or contractions in the time taken to settle payables.

Cash Conversion Cycle

The cash conversion cycle remains negative throughout, ranging from -47 to -28 days. This consistent negativity indicates the company generally receives cash from sales before it pays its suppliers, which positively affects liquidity. Although the cycle shortens slightly at some points (e.g., moving from -47 to -28 days), it reverts to around -40 days by June 2025, maintaining efficient cash flow management.

Cost of Products Sold

The cost of products sold exhibits a fluctuating but generally increasing trend from September 2019 through June 2025. Starting at approximately $8.7 billion in September 2019, the cost rises to over $10.6 billion by late 2021. Afterwards, there are periods of moderate decreases and increases, but the values consistently hover around the $10 billion mark. Notably, there is a peak near the end of 2021 followed by some volatility, with costs ranging from approximately $9.7 billion to $10.6 billion during 2024 and 2025. This pattern suggests ongoing changes in production costs or sales volume, with no sustained period of decline over the timeframe.

Inventories

Inventories show an overall upward trajectory from about $5.5 billion in late 2019 to roughly $7.5 billion by mid-2025. There is steady growth with some minor fluctuations; for example, inventories increased consistently through 2021 and early 2022, peaking above $7.5 billion. Mid-2023 sees a slight dip but levels remain elevated compared to the starting point. By mid-2025, inventories again approach $7.5 billion, indicating increased stock levels over the medium term, which could reflect greater production scale or slower inventory turnover.

Inventory Turnover Ratio

The inventory turnover ratio, reported intermittently from March 2020 onwards, generally ranges between 5.45 and 6.41. Initially, the ratio is higher near 6.4 but demonstrates a gradual decline over time. There are fluctuations with occasional rebounds (around 6.05–6.2) in 2021 and mid-2023, but the longer-term trend shows a gradual reduction in turnover efficiency. Toward mid-2025, the ratio settles closer to the lower end near 5.45. This decreasing turnover ratio, despite rising inventory levels, indicates inventory is moving more slowly relative to sales, which could suggest inefficiencies or changes in sales velocity and inventory management strategies.

Overall Analysis

The company experiences an increasing cost base and larger inventories over the analyzed periods, with a concurrent slight decrease in the efficiency of inventory turnover. These trends may imply pressures on cost control and inventory management. Maintaining elevated inventory levels in combination with a decreasing turnover ratio can impact liquidity and operational flexibility. Monitoring and optimizing inventory and production costs could be important areas for management focus going forward to sustain operational efficiency and profitability.

The financial data exhibits notable fluctuations in key performance indicators over the analyzed periods. Net sales show a general upward trend with periodic variations. After a decline during the first half of 2020, net sales rebounded and reached a peak around mid-2023, followed by slight decreases and recoveries through to mid-2025. This pattern suggests resilience and a capacity to regain market momentum after temporary disruptions.

Accounts receivable display a cyclical pattern over time, generally increasing in periods of higher sales and decreasing when sales momentum slows. The values demonstrate increases particularly from late 2021 through 2024, indicating possibly extended credit terms or slower collection periods during these intervals. Such trends merit attention to cash flow management to mitigate potential liquidity risks.

Receivables Turnover Ratio

This ratio, available beginning in mid-2020, reflects the efficiency of the company in collecting receivables. It peaked at 16.98 in March 2020 before generally declining to the range of 13.25 to 14.99 in subsequent periods. The gradual decrease in turnover ratio indicates a tendency toward longer collection cycles or increased credit sales, suggesting a potential deterioration in receivables management efficiency.

Collectively, the interplay between net sales, accounts receivable, and receivables turnover portrays a scenario where sales growth is periodically accompanied by an accumulation of receivables and a reduction in collection efficiency. This may highlight challenges in working capital optimization and the need for strategic focus on credit policies to sustain financial health.

Cost of Products Sold

The cost of products sold displays a generally fluctuating pattern over the examined periods. Beginning at 8,723 million USD for September 2019, it experienced slight increases and decreases through early 2020, with some troughs and peaks such as a slight dip in March 2020 (8,716 million) and a rise in September 2021 (10,365 million). The cost reaches its highest point around December 2021 and mid-2022 with values near 10,800 million USD. From early 2023 onwards, the cost slightly decreases and stabilizes, ranging mostly between 9,855 million and 10,613 million USD, before witnessing a notable decrease again in March 2025 to 9,694 million followed by a rise to 10,631 million in June 2025. The pattern suggests variability potentially linked to seasonal factors or changes in production scale, but overall the cost remains within a broad range of approximately 8,700 to 10,800 million USD.

Accounts Payable

Accounts payable values show an overall upward trend throughout the period with some fluctuations. Starting at 10,951 million USD in September 2019, the value modestly declines till early 2020 but then rises sharply towards mid-2020, attaining a peak around 14,882 million USD in June 2022. Following this peak, a declining trend is visible through late 2022 and into early 2023, fluctuating between approximately 13,700 million and 14,500 million USD. The second half of the timeline sees another increase, with accounts payable reaching a local high near 15,364 million USD by September 2024, followed by minor fluctuations in subsequent quarters. Such behavior might be associated with changes in supplier payment terms, procurement volume, or strategic cash management.

Payables Turnover Ratio

The payables turnover ratio data is only available starting from March 2020 and presents some variability. The ratio begins at 2.92 in March 2020, experiencing slight increases and decreases over the years. The highest observed values occur in December 2022 (3.11) and around March 2023 (3.03), indicating relatively faster payments to suppliers during those periods. The ratio trends downward near the end of 2023 and into 2024, dipping as low as 2.66 in September and December 2024, suggesting slower payments or increasing accounts payable relative to cost of products sold. By March and June 2025, the ratio recovers slightly to about 2.83 and 2.7, respectively. Overall, the ratio oscillates around an approximate mean of 2.8 to 3.0, reflecting moderate consistency in the company's payment cycles with some periods of extended payment durations.

Working Capital

The working capital values display a predominantly negative balance across the entire period from September 2019 to June 2025, indicating a consistent situation where current liabilities exceed current assets. Initially, the deficit deepened from -8,328 million in September 2019 to a low close to -16,880 million by December 2022, showing a general trend of increasing negative working capital.

From early 2023 onwards, the negative working capital balance exhibits some recovery, fluctuating between -15,725 million and -8,155 million, suggesting attempts to improve liquidity or changes in operational management. However, the latter part of the series toward June 2025 still reflects significant negative working capital, specifically around -9,813 to -10,666 million, indicating ongoing challenges in current asset management relative to current liabilities.

Net Sales

Net sales show cyclical variations with some upward trends interspersed by fluctuations typical of quarterly business cycles. The starting quarterly net sales figure was 17,798 million in September 2019, increasing to a peak around 20,612 million by September 2022.

Despite some quarterly declines, net sales generally oscillated in the range of approximately 17,000 to 22,000 million throughout the period, reaching a maximum observed value of 21,882 million in December 2024. Sales figures fell to a low of 17,214 million in March 2020, which may reflect external disruptions around that time, before recovering and stabilizing above 20,000 million for most subsequent quarters.

The trend suggests resilience and growth in sales volume over the five-year horizon, although there is no steady linear increase but rather a series of short-term declines and rebounds, in line with typical business seasonality and market fluctuations.

Working Capital Turnover

No data is available concerning working capital turnover ratios for any of the quarters presented, preventing analysis on efficiency in using working capital to generate sales.

Overall Insights

The company faces significant and persistent negative working capital positions that have somewhat stabilized but remain substantial. This condition highlights potential liquidity management concerns or strategic operational structures reliant on extended payables or lean current assets.

Net sales have generally trended positively despite periodic fluctuations, indicating robust revenue generation capabilities. The lack of working capital turnover data limits deeper insights into operational efficiency and asset utilization.

Given the dataset, the financial pattern suggests strong sales performance coexisting with ongoing working capital challenges, underscoring a focus area for improving short-term financial stability and operational liquidity management.

Inventory Turnover

The inventory turnover ratio exhibits a general declining trend over the analyzed periods. Starting from a higher point near 6.41 in mid-2020, it gradually decreased to levels around 5.45 by mid-2025. This decline suggests that the frequency with which inventory is sold and replaced has slowed down slightly over time. Fluctuations occur throughout the periods, but the overall pattern points to a reduction in turnover efficiency.

Average Inventory Processing Period (number of days)

Corresponding to the inventory turnover trend, the average inventory processing period shows an increasing pattern. Initially near 57 days in mid-2020, this metric generally fluctuates but tends to rise, reaching approximately 67 days by mid-2025. This indicates that inventory is remaining in stock longer before being processed or sold, consistent with the reduced inventory turnover observed.

Overall Insight

The inverse relationship between inventory turnover and the average inventory processing period is evident, reflecting typical inventory dynamics. The slowing turnover combined with lengthening processing times might imply challenges in inventory management or changing demand patterns. These trends could warrant attention to optimize stock levels and improve operational efficiency.

Receivables Turnover

The receivables turnover ratio shows a fluctuating trend over the observed periods, with values mostly ranging between 13.25 and 16.98. It reached its peak of 16.98 in the quarter ending March 31, 2020, followed by a general decline and some volatility thereafter. From 2021 onwards, the turnover ratio mostly stayed within the 13 to 15 range, demonstrating some stability but at a lower turnover level than the peak in early 2020. The ratio slightly decreased in the most recent quarters, reaching around 13.6 by June 30, 2025.

Average Receivable Collection Period

The average collection period in days inversely mirrors the receivables turnover pattern, with values ranging from 21 to 28 days. The period increased from 21 days at the quarter ending June 30, 2020, peaking at 28 days around March 31, 2024. Since then, it fluctuated slightly but generally remained stable at around 27 days toward the latest periods. This indicates that the company’s collection efficiency marginally declined post-2020 and stabilized at a longer collection period than the initial quarters shown.

Combined Insights

Overall, the data suggests a decline in receivables management efficiency since early 2020, as shown by a decreasing turnover ratio and an increasing average collection period. After the initial peak and subsequent drop in turnover, the company experienced a more consistent but somewhat slower receivables turnover process. The average collection period settling near high twenties indicates that the company now requires a longer time to collect receivables compared to prior periods. This may warrant attention to credit policies or collection practices going forward.

Average Inventory Processing Period

The average inventory processing period shows a general upward trend over the observed quarters. Starting at 57 days in the earliest available quarter, it increases steadily, reaching peaks of 65 and 67 days towards the later quarters. Intermittent small declines are present but the overall pattern suggests an elongation in the time inventory remains in process, potentially indicating slower inventory turnover or increased stock levels.

Average Receivable Collection Period

The average receivable collection period fluctuates moderately throughout the periods. Beginning at 21 days, it rises and falls between 23 and 28 days without a clear long-term upward or downward trend. This indicates relatively stable accounts receivable management with some variability, possibly influenced by changes in credit terms or customer payment behaviors, but no significant deterioration or improvement overall.

Operating Cycle

The operating cycle, representing the combined duration of inventory processing and receivable collection, demonstrates a gradual increase from 78 days initially to levels around 93-94 days in the latest periods. This trend reflects the cumulative effect of a longer inventory processing period and relatively stable receivable collection times. The extending operating cycle might suggest a slowing of the company's cash conversion efficiency, potentially impacting working capital management.

The payables turnover ratio shows a moderate degree of fluctuation over the observed periods. Starting at 2.92 in June 2020, the ratio experienced a slight increase and reached a peak of 3.11 during December 2022. Following that, it slightly declined, with values hovering close to 2.9 before dipping to around 2.7 in the latest recorded quarters. This indicates variations in the company's efficiency in managing its payables, with occasional improvements in turnover but recent signs of deceleration.

Correspondingly, the average payables payment period, measured in days, mirrors the inverse pattern of the turnover ratio. Initially at 125 days in June 2020, it slightly decreased to around 120 days by early 2023, signaling a quicker payment cycle. However, from March 2024 onward, there is a noticeable increase, peaking at 137 days in late 2024, implying a longer duration taken to settle payables in the most recent periods.

Payables Turnover

Displayed variability with a peak in late 2022 (3.11) and a general decline to approximately 2.7 by mid-2025.

Average Payables Payment Period

Initial reduction in days until early 2023, suggesting improved payment speed, followed by a steady increase reaching 137 days in late 2024, indicating slower payments.

Overall Insight

The inverse relationship between turnover ratio and payment period is consistent, reflecting changes in payment practices. The recent trend towards lengthening payment periods may suggest cash flow management strategies or shifts in supplier negotiations.

Average inventory processing period

The average inventory processing period demonstrates a generally stable trend with slight fluctuations over the analyzed timeline. Starting at 57 days in September 2020, it shows a gradual increase to a peak of 67 days by March 2025. Although there are periodic minor decreases, the overall tendency suggests a lengthening of the inventory holding period, which may imply slower turnover or increased stock levels.

Average receivable collection period

This metric remains relatively steady, oscillating between 21 and 28 days throughout the entire period. The receivable collection period increased slightly from 21 days in September 2020 to around 27-28 days from late 2022 onwards, indicating a mild lengthening in the time taken to collect receivables. Despite these changes, the collection period remains consistent, highlighting stable credit and collection policies.

Average payables payment period

The average payables payment period exhibits more pronounced variability compared to the other metrics. Initially around 125 days in September 2020, it fluctuates downwards to approximately 117 days in mid-2022, then increases again, reaching a peak of 137 days by March 2024 and December 2024. This fluctuation suggests changes in supplier payment terms or cash management strategies, potentially reflecting efforts to optimize working capital.

Cash conversion cycle

The cash conversion cycle remains negative throughout the observed quarters, ranging roughly between -53 and -28 days, indicating that the company is able to convert its investments in inventory and receivables into cash quickly, likely before it needs to pay its suppliers. The cycle shows some fluctuations, with the most negative value, -53 days, occurring in September 2020, and a gradual reduction in negativity thereafter, reaching about -28 days in early 2023. This trend reflects a moderate decrease in the efficiency of cash flow conversion over time but still points to a strong position in managing operational cash flows.