Colgate-Palmolive Company (CL)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover	4.00	3.91	4.19	4.23	4.20	4.24	3.95	3.77	3.72	3.62	3.67	3.72	4.16	4.12	3.94	3.90	3.86	4.04	4.18	4.92
Receivables turnover	13.22	11.74	10.95	10.89	12.27	12.13	11.28	11.53	11.95	12.45	11.88	11.41	13.43	12.18	11.84	11.92	13.03	12.51	12.95	10.26
Payables turnover	4.40	4.91	5.17	4.92	4.79	5.52	5.22	4.94	4.98	4.87	4.91	4.53	4.76	5.47	5.27	5.00	4.63	5.20	5.36	5.27
Working capital turnover	—	83.43	67.53	60.59	36.17	25.35	23.20	17.89	16.20	22.57	23.14	41.31	50.35	44.58	38.04	696.58	—	—	—	—

Inventory Turnover Ratio Analysis:
- The inventory turnover ratio for Colgate-Palmolive shows a general decrease trend from March 31, 2020, to December 31, 2024, fluctuating between 3.62 and 4.24.
- A decreasing trend in inventory turnover ratio could indicate that the company is taking longer to sell its products, which may lead to excess inventory and increased holding costs.

Receivables Turnover Ratio Analysis:
- The receivables turnover ratio for Colgate-Palmolive exhibits fluctuations but generally maintains a range between 10.26 and 13.43 from March 31, 2020, to December 31, 2024.
- The variations in the receivables turnover ratio may indicate changes in the company's credit policies or the efficiency of its collection process.

Payables Turnover Ratio Analysis:
- The payables turnover ratio for Colgate-Palmolive demonstrates inconsistency but remains relatively stable between 4.40 and 5.52 from March 31, 2020, to December 31, 2024.
- The stability in the payables turnover ratio suggests that the company manages its accounts payable efficiently without significant variations in its payment practices.

Working Capital Turnover Ratio Analysis:
- Colgate-Palmolive had negative working capital turnover ratios in the earlier periods, which turned positive and fluctuated between 16.20 and 83.43 from March 31, 2022, to December 31, 2024.
- The positive working capital turnover ratios indicate the company's ability to generate revenue relative to its working capital, with higher ratios implying better efficiency in utilizing working capital resources.

In conclusion, analyzing these activity ratios provides insights into Colgate-Palmolive's management of inventory, receivables, payables, and working capital, highlighting areas where the company may need to focus on improving operational efficiency.

Average number of days

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	91.34	93.39	87.08	86.26	86.82	86.10	92.39	96.87	98.07	100.78	99.35	98.00	87.65	88.56	92.54	93.70	94.61	90.36	87.28	74.16
Days of sales outstanding (DSO)	days	27.62	31.08	33.33	33.50	29.75	30.08	32.36	31.65	30.55	29.32	30.73	32.00	27.17	29.97	30.84	30.61	28.01	29.18	28.19	35.59
Number of days of payables	days	82.98	74.35	70.54	74.18	76.22	66.08	69.96	73.87	73.34	74.92	74.41	80.58	76.62	66.71	69.24	73.01	78.78	70.15	68.10	69.32

Based on the provided data for Colgate-Palmolive Company, let's analyze the activity ratios:

1. Days of Inventory on Hand (DOH): This ratio measures how many days on average it takes for the company to sell its inventory. From March 31, 2020, to December 31, 2024, the DOH for Colgate-Palmolive ranged from a low of 74.16 days to a high of 100.78 days. A lower DOH indicates the company is selling inventory faster, which is generally more favorable as it signifies efficient inventory management. Over the period, Colgate-Palmolive showed fluctuations in its DOH, but generally, it remained within a reasonable range.

2. Days of Sales Outstanding (DSO): DSO indicates how many days on average it takes for the company to collect revenue after making a sale. Between March 31, 2020, and December 31, 2024, Colgate-Palmolive's DSO fluctuated from 27.17 days to 33.50 days. A lower DSO is preferable as it indicates faster cash collection. Colgate-Palmolive's DSO remained relatively stable over the period, with minor fluctuations observed, suggesting efficient management in collecting receivables.

3. Number of Days of Payables: This ratio reflects the number of days it takes for a company to pay its suppliers. Colgate-Palmolive's days of payables ranged from 66.08 days to 82.98 days between March 31, 2020, and December 31, 2024. A longer period indicates the company takes more time to pay its suppliers, which could imply favorable cash flow management. The company showed some variation in its payables period, but overall, it maintained a relatively stable range over the years.

In conclusion, analyzing the activity ratios of Colgate-Palmolive Company over the specified period indicates varying levels of efficiency in managing inventory, collecting sales, and paying suppliers. Overall, the company demonstrated reasonable control over its activity ratios, with minor fluctuations observed over the years.

Long-term

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Fixed asset turnover	4.55	4.55	4.55	4.39	4.25	4.34	4.21	4.20	4.17	4.30	4.70	4.66	4.67	4.77	4.66	4.63	4.43	4.61	4.58	4.56
Total asset turnover	1.25	1.20	1.21	1.19	1.19	1.19	1.15	1.13	1.14	1.09	1.13	1.11	1.16	1.09	1.07	1.06	1.03	1.05	1.05	1.06

The Fixed Asset Turnover ratio for Colgate-Palmolive Company has shown fluctuations over the years, ranging from 4.17 to 4.77. This ratio indicates that the company generates between $4.17 to $4.77 in sales for every dollar invested in fixed assets. The ratio has generally been stable within a narrow range, with some slight variations noted over time.

The Total Asset Turnover ratio has also exhibited variability, with values ranging from 1.03 to 1.25. This ratio signifies that Colgate-Palmolive generates sales amounting to between $1.03 to $1.25 for each dollar of total assets. The ratio trended upwards over the years, indicating improved efficiency in asset utilization to generate revenue.

Overall, both the Fixed Asset Turnover and Total Asset Turnover ratios suggest that Colgate-Palmolive has been effectively utilizing its assets to generate sales, with the Total Asset Turnover ratio showing a particularly positive trend of improvement over the years. These ratios reflect the company's efficiency in generating revenue relative to its investment in assets, highlighting its ability to maximize asset utilization for sales generation.