Colgate-Palmolive Company (CL)

Cash conversion cycle

		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
Cash conversion cycle	days	35.99	50.11	49.86	45.58	40.35	50.10	54.79	54.65	55.28	55.18	55.66	49.42	38.21	51.82	54.13	51.29	43.85	49.39	47.38	40.44

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 91.34 + 27.62 – 82.98
= 35.99

The cash conversion cycle for Colgate-Palmolive Company has displayed some fluctuations over the past few years. It measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

From March 2020 to December 2024, the cash conversion cycle ranged from a low of 35.99 days to a high of 55.66 days. A shorter cash conversion cycle is generally favorable as it indicates that the company is efficiently managing its working capital.

It is worth noting that the trend fluctuated over the period analyzed, with some periods showing an increase in the number of days required to convert investments into cash (e.g., from June 2022 to September 2024), and others showing a decrease (e.g., from September 2023 to December 2024).

Overall, the management of the cash conversion cycle is crucial for the financial health of Colgate-Palmolive Company, as it impacts liquidity and operational efficiency. Monitoring and optimizing this cycle can help improve the company's cash flow management and overall financial performance.