Church & Dwight Company Inc (CHD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.35 | 4.83 | 5.47 | 5.41 | 5.69 |
| Receivables turnover | 11.14 | 12.74 | 12.80 | 12.28 | 12.23 |
| Payables turnover | 5.20 | 4.69 | 4.41 | 4.56 | 5.02 |
| Working capital turnover | 54.48 | 25.34 | — | — | — |
Church & Dwight Co., Inc.'s activity ratios provide insights into the efficiency of the company's operational processes.
1. Inventory turnover:
- Church & Dwight Co., Inc.'s inventory turnover has shown a fluctuating trend over the past five years, ranging from 4.83 to 5.69. In 2023, the inventory turnover ratio improved to 5.35, indicating that the company is managing its inventory more efficiently compared to the previous year. This signifies that the company is selling and replenishing its inventory at a faster rate.
2. Receivables turnover:
- The receivables turnover ratio has also exhibited variability over the years, with values ranging from 11.14 to 12.80. A higher receivables turnover ratio indicates that the company is collecting its outstanding receivables more rapidly. In 2023, the ratio decreased to 11.14, suggesting a longer collection period compared to the previous year.
3. Payables turnover:
- Church & Dwight Co., Inc.'s payables turnover ratio has fluctuated between 4.41 and 5.20 over the past five years. An increasing payables turnover ratio implies that the company is taking longer to pay its suppliers. In 2023, the ratio increased to 5.20, reflecting a lengthening payables period compared to the prior year.
4. Working capital turnover:
- The working capital turnover ratio reveals how efficiently the company utilizes its working capital to generate revenue. In 2023, Church & Dwight Co., Inc. saw a significant improvement in this ratio, increasing to 54.48 from 25.34 in 2022. This spike suggests that the company has been able to generate more revenue from its working capital in the current year.
Overall, the trends in these activity ratios provide valuable insights into how effectively Church & Dwight Co., Inc. is managing its inventory, receivables, payables, and working capital to support its operational activities and financial performance.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 68.26 | 75.51 | 66.77 | 67.43 | 64.18 |
| Days of sales outstanding (DSO) | days | 32.77 | 28.65 | 28.52 | 29.73 | 29.85 |
| Number of days of payables | days | 70.19 | 77.86 | 82.79 | 80.05 | 72.78 |
Activity ratios provide insights into how efficiently a company is managing its assets and operations. Let's analyze Church & Dwight Co., Inc.'s activity ratios based on the data provided.
1. Days of Inventory on Hand (DOH):
- Church & Dwight Co., Inc. has shown fluctuating trends in its inventory management over the past five years.
- The company has improved its inventory turnover efficiency in 2021 and 2023, with fewer days of inventory on hand compared to previous years.
- However, the slight increase in DOH in 2023 compared to 2022 may indicate a potential slowdown in inventory management efficiency.
2. Days of Sales Outstanding (DSO):
- Church & Dwight Co., Inc. has maintained relatively stable DSO figures over the past five years, indicating consistent collection of accounts receivable.
- The company's ability to collect revenue from customers within around one month is a positive sign of its effective credit and collection policies.
3. Number of Days of Payables:
- Church & Dwight Co., Inc. has shown a downward trend in the number of days of payables over the last five years.
- A decreasing trend in days of payables could suggest that the company is paying its suppliers faster, which may impact its working capital management and cash flow.
Overall, while Church & Dwight Co., Inc. demonstrates effective management of accounts receivable, there are opportunities for improvement in inventory and payables management to optimize working capital and enhance overall operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 6.33 | 7.06 | 7.95 | 7.99 | 7.28 |
| Total asset turnover | 0.68 | 0.64 | 0.65 | 0.66 | 0.65 |
Church & Dwight Co., Inc.'s long-term activity ratios indicate how efficiently the company is utilizing its fixed assets and total assets to generate revenue.
The fixed asset turnover ratio has shown a declining trend over the past five years, indicating that the company is generating less revenue per dollar of fixed assets invested. This suggests that Church & Dwight Co., Inc. may not be effectively utilizing its fixed assets to drive sales growth.
On the other hand, the total asset turnover ratio has been relatively stable, hovering around 0.65 to 0.68. This suggests that the company is efficiently generating revenue relative to its total assets over the years.
Overall, Church & Dwight Co., Inc. needs to assess its utilization of fixed assets to improve efficiency and potentially boost revenue generation. However, the stability in the total asset turnover ratio indicates that the company is maintaining a consistent level of revenue generation relative to its total asset base.