Church & Dwight Company Inc (CHD)

Short-term

Turnover ratios

Based on the provided data for Church & Dwight Company Inc, let's analyze the activity ratios over the years:

1. Inventory Turnover:
- The company has maintained a relatively stable inventory turnover ratio over the years, ranging from 4.83 to 5.47.
- This indicates that the company is managing its inventory efficiently, with products being sold and restocked at a consistent rate annually.

2. Receivables Turnover:
- The receivables turnover ratio has shown a decreasing trend from 12.80 in 2021 to 10.16 in 2024.
- This may suggest that the company is taking longer to collect payments from its customers, which could potentially lead to cash flow challenges if not managed effectively.

3. Payables Turnover:
- The payables turnover ratio fluctuated over the years but remained relatively stable, ranging from 4.41 to 5.20.
- This indicates that the company is efficiently managing its accounts payable, balancing the timing of payments to suppliers with its cash flow needs.

4. Working Capital Turnover:
- The working capital turnover ratio shows significant fluctuations, with a notable increase from 2022 to 2023 and a decrease in 2024.
- A high working capital turnover ratio indicates that the company is generating revenue efficiently relative to its working capital. However, the ratio decrease in 2024 may raise concerns about the company's operational efficiency.

In summary, while Church & Dwight Company Inc has been managing its inventory and payables effectively, there are signs of potential challenges in managing receivables and working capital efficiency based on the trends observed in the receivables turnover and working capital turnover ratios.

---

Average number of days

Based on the provided data, we can analyze the activity ratios of Church & Dwight Company Inc as follows:

1. Days of Inventory on Hand (DOH):
- The company's DOH has shown some fluctuation over the years, ranging from 66.77 days to 75.51 days. In general, a lower DOH indicates more efficient management of inventory. In this case, the trend suggests that the company has been fairly effective in managing its inventory levels, with a slight increase in 2022 but a subsequent decrease in 2023.

2. Days of Sales Outstanding (DSO):
- The DSO measures the average number of days it takes for the company to collect revenue after a sale is made. Church & Dwight Company Inc has seen an increase in DSO from 28.52 days in 2021 to 35.91 days in 2024. A higher DSO indicates a longer collection period, which may impact the company's cash flow and liquidity.

3. Number of Days of Payables:
- The number of days of payables reflects how long it takes the company to pay its suppliers. The data shows some variability in this ratio, ranging from 70.19 days to 82.79 days. A longer period of payables may indicate favorable credit terms with suppliers, while a shorter period may suggest strong cash management practices.

In summary, Church & Dwight Company Inc's activity ratios reveal mixed trends in inventory management, revenue collection, and supplier payments over the years. It would be important for the company to closely monitor these ratios to ensure efficient working capital management and overall operational effectiveness.

---

Long-term

The fixed asset turnover ratio and total asset turnover ratio are important long-term activity metrics that provide insight into how efficiently Church & Dwight Company Inc is utilizing its fixed assets and total assets to generate revenue.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures the company's efficiency in generating sales revenue from its investments in fixed assets.
- The trend for Church & Dwight Company Inc's fixed asset turnover ratio shows a slight decline over the past five years, from 7.99 in 2020 to 6.55 in 2024.
- A higher fixed asset turnover ratio indicates better utilization of fixed assets, suggesting that the company is effectively using its assets to generate revenue.

2. Total Asset Turnover:
- The total asset turnover ratio evaluates how efficiently the company is using its total assets to generate sales.
- The trend for Church & Dwight Company Inc's total asset turnover ratio shows a relatively stable performance, ranging from 0.65 in 2021 to 0.69 in 2024.
- An increasing total asset turnover ratio indicates improved efficiency in generating sales revenue relative to the total assets employed.

Overall, the analysis of both fixed asset turnover and total asset turnover ratios suggests that Church & Dwight Company Inc has been relatively efficient in utilizing its assets to generate sales revenue. However, the decline in the fixed asset turnover ratio may indicate a need for the company to assess and possibly optimize its utilization of fixed assets to improve efficiency in the long term.