Colgate-Palmolive Company (CL)
Liquidity 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.92 | 1.04 | 1.06 | 1.06 | 1.11 | 1.16 | 1.17 | 1.23 | 1.28 | 1.17 | 1.17 | 1.09 | 1.09 | 1.09 | 1.11 | 1.01 | 0.99 | 0.97 | 0.92 | 0.96 |
| Quick ratio | 0.48 | 1.78 | 0.59 | 0.59 | 0.58 | 0.60 | 0.59 | 2.30 | 0.61 | 0.57 | 0.56 | 0.54 | 0.53 | 0.58 | 0.58 | 0.54 | 0.50 | 0.53 | 0.49 | 0.55 |
| Cash ratio | 0.22 | 1.47 | 0.25 | 0.25 | 0.24 | 0.26 | 0.23 | 1.94 | 0.24 | 0.26 | 0.22 | 0.20 | 0.21 | 0.25 | 0.24 | 0.23 | 0.21 | 0.24 | 0.22 | 0.20 |
Based on the provided data, we can analyze the liquidity ratios of Colgate-Palmolive Company as follows:
1. Current Ratio: The current ratio measures the ability of a company to meet its short-term obligations with its short-term assets. Colgate-Palmolive's current ratio has shown a generally increasing trend from March 31, 2020, to December 31, 2024, indicating an improvement in its short-term liquidity position. However, it experienced a slight decline in the last two quarters of 2024.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. Colgate-Palmolive's quick ratio fluctuated over the years, with some quarters showing a healthy ratio above 1, which suggests the company has an adequate level of highly liquid assets to cover its short-term liabilities.
3. Cash Ratio: The cash ratio reflects the company's ability to cover its short-term liabilities using only its cash and cash equivalents. Colgate-Palmolive's cash ratio has also shown variability over the years, with some quarters demonstrating a strong cash position relative to its current liabilities.
Overall, the trends in Colgate-Palmolive's liquidity ratios indicate that the company has managed its short-term financial obligations effectively, with improvements in certain quarters. However, periodic fluctuations in the ratios suggest a need for continued monitoring of the company's liquidity position to ensure it remains stable and sufficient to meet its upcoming obligations.
See also:
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle for Colgate-Palmolive Company has shown fluctuating trends over the past few years. In general, the cash conversion cycle indicates the time it takes for a company to convert its resources, such as inventory, into cash from sales.
From the data provided, we observe that the cash conversion cycle has ranged from a low of 35.99 days to a high of 55.66 days during the period from March 31, 2020, to June 30, 2024. A lower cash conversion cycle is generally favorable as it signifies that the company is efficiently managing its working capital.
The trend in the cash conversion cycle for Colgate-Palmolive Company shows some volatility, with fluctuations observed throughout the period. There are periods where the cycle lengthens, indicating potential challenges in managing inventory, accounts receivable, or payables. Conversely, there are also instances where the cycle shortens, highlighting improved efficiency in managing the company's cash conversion process.
Analyzing the cash conversion cycle alongside other performance indicators and industry benchmarks can provide a more comprehensive understanding of Colgate-Palmolive Company's operational efficiency and financial health. It is important for the company to continuously monitor and optimize its cash conversion cycle to ensure effective working capital management and sustainable growth.