The Clorox Company (CLX)

Short-term

Turnover ratios

The activity ratios of The Clorox Company reveal patterns and insights into the company's operational efficiency over the analyzed period.

Inventory Turnover: The inventory turnover ratio indicates the company's ability to manage and sell inventory efficiently. The ratio declined from 7.14 times as of September 30, 2020, reaching a low of approximately 5.45 in September 2021, suggesting a slowdown in inventory movement during that period. Subsequently, the ratio gradually increased, reaching 6.99 as of September 30, 2024. This upward trend signifies an improvement in inventory management and sales efficiency, although the ratio remains below the initial level observed in late 2020.

Receivables Turnover: The receivables turnover ratio demonstrates how effectively the company collects its accounts receivable. Initially, the ratio fluctuated around 10.41 to 12.44 times from September 2020 through the end of 2021, indicating consistent collection periods. After a slight decline, the ratio generally increased, peaking at 12.55 in September 2024. This suggests enhanced collection efficiency over time, with shorter average collection periods subsequently.

Payables Turnover: The payables turnover ratio measures how quickly the company pays its suppliers. The ratio varied significantly during the period, with lows around 2.52 times in September 2023 and peaks above 4.75 in June 2022. Periodic fluctuations imply variable payment strategies or changes in supplier credit terms. The ratio appears to be relatively higher mid-period, indicating faster payment cycles, especially notable in 2022, with a subsequent decrease around late 2023.

Working Capital Turnover: Data on working capital turnover is limited, with detailed figures available for select dates. Notably, an exceptionally high ratio of 147.77 was recorded in June 2024, following a period of sparse data. Prior to that, the ratio peaked at 52.60 in March 2021. The elevated ratios suggest periods of heightened efficiency in using working capital to generate sales or cash flow. The presence of a very high ratio in mid-2024 may indicate a period of optimized operational leverage or a change in working capital management.

Overall, The Clorox Company has demonstrated a trend of improving inventory and receivables management over time, with incremental increases in activity ratios suggesting heightened operational efficiency. Variations in payables and sporadic data on working capital turnover highlight operational adjustments and strategic shifts in supplier and inventory management practices.

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Average number of days

The provided data on The Clorox Company’s activity ratios—specifically Days of Inventory on Hand (DOH), Days Sales Outstanding (DSO), and Days of Payables (DPO)—illustrates trends and shifts in operational efficiency over the period from September 2020 through June 2025.

Days of Inventory on Hand (DOH):
Initially, the company maintained an inventory period of approximately 51 days as of September 2020, with a rising trend that reached a peak of nearly 67 days by December 2021. This suggests a gradual accumulation of inventory, possibly reflecting strategic stockpiling or supply chain adjustments during that period. Following this peak, there is a general downward trend in inventory days, falling to around 56 days by December 2023, indicating efforts to improve inventory turnover. From early 2024 onward, the DOH further decreased to approximately 49 days by June 2025, reflecting enhanced inventory management and possibly improved demand forecasting or supply chain efficiencies.

Days of Sales Outstanding (DSO):
The receivables collection period exhibited modest fluctuations. In early periods, DSO was around 35 days, decreasing slightly to approximately 29-33 days through 2021 and early 2022, which signals relatively efficient receivables management. From 2023 onwards, DSO stabilized around 30-34 days, with a notable increase to roughly 42 days observed in mid-2025. The upward movement near the end of the period could indicate a relaxation in receivables collection efforts or changes in customer credit terms, potentially impacting cash flow timing.

Number of Days of Payables (DPO):
Clorox maintained a relatively long payable period, with DPO fluctuating significantly. Initially, the company extended payables for over 125 days, peaking at approximately 145 days in September 2023. These extended periods suggest a strategic approach in managing working capital by stretching payable commitments. There is a noticeable decline after this peak, with DPO reducing to around 78 days by June 2025. The excessive duration of payables during much of the period, particularly over 130 days, indicates reliance on supplier credit as part of working capital strategies; however, the subsequent reduction implies a possible tightening of payment terms or improved liquidity management.

Summary:
Overall, Clorox’s activity ratios demonstrate an evolving operational environment. The inventory turnover metric improved markedly after a peak in late 2021, reflecting efforts in inventory management. Receivables collection remained reasonably efficient but showed signs of slight slackening in mid-2025. The payables pattern reveals a strategic extension of payment periods during much of the period, with notable reductions toward the end, suggesting a shift toward more conservative or balanced payables management.

This analysis suggests that Clorox has been actively managing its working capital components—inventory, receivables, and payables—with efforts apparent to optimize operational efficiency and cash flow, especially in the latter part of the period observed.

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Long-term

The analysis of The Clorox Company's long-term activity ratios reveals insights into the efficiency with which the company utilizes its fixed assets and total assets over the observed period.

Fixed Asset Turnover:
- The fixed asset turnover ratio demonstrates variability across the periods examined. Starting at 6.06 times as of September 30, 2020, it increased marginally to 6.16 times by December 31, 2020, indicative of effective deployment of fixed assets during that period.
- A notable decline occurred thereafter, with the ratio decreasing to 4.76 by March 31, 2021, and further diminishing to 4.49 for the subsequent periods through September 30, 2021. This decline suggests a reduction in fixed asset efficiency, possibly due to increased fixed assets not immediately translating into revenue.
- The ratio experienced some recovery, rising to 5.45 by March 31, 2022, before decreasing again to levels around 4.24 to 4.37 in most of the subsequent quarters, ending at 4.28 as of September 30, 2023. The fluctuations may reflect changes in asset management strategies, investment levels, or operational efficiencies.
- Notably, the data for December 31, 2023, to June 30, 2024, are unavailable, but future values indicate a slight recovery with ratios at 4.72 and 4.47, respectively. The ratio slightly declined again to 4.40 by March 31, 2025, indicating a relatively stable but lower efficiency compared to the earlier high points.

Total Asset Turnover:
- The total asset turnover ratio shows a generally increasing trend over the period. Starting at 1.05 times in September 2020, it progressively rose to a peak of 1.24 in March and June of 2023.
- Temporary fluctuations occur, but the overall trend indicates improved utilization of total assets to generate sales, reflecting potentially better operational effectiveness or asset management.
- A notable dip occurs at 1.17 as of September 30, 2023, but the ratio rebounded to 1.24 at the end of 2023 and remained stable into the first half of 2024.
- By June 30, 2024, the ratio stabilizes at 1.23, and in the latest period (June 30, 2025), it remains consistent at 1.28, suggesting ongoing efficiency in converting total assets into sales.

Summary:
The company's fixed asset turnover has exhibited significant fluctuation with periods of decline that may suggest challenges in asset utilization efficiency, possibly due to investments in new fixed assets or operational adjustments. In contrast, the total asset turnover has shown a positive, gradually improving trend over time, indicating better overall asset utilization in generating revenue. This divergence hints at the company's strategic focus possibly shifting toward more efficient use of its total assets, even if fixed asset utilization has faced periodic setbacks.