The Clorox Company (CLX)

Short-term

Turnover ratios

The Clorox Company's activity ratios provide insights into its efficiency in managing inventory, receivables, payables, and working capital turnover.

1. Inventory Turnover:
The inventory turnover ratio has been relatively stable, ranging between 6.57 to 9.58 times over the analyzed periods. This indicates that on average, Clorox sells and replenishes its inventory multiple times throughout the year, with a current rate of 8.27 times. This suggests efficient management of inventory levels.

2. Receivables Turnover:
The receivables turnover ratio shows a fluctuating trend, varying between 8.67 and 12.31 times. Currently, the ratio stands at 10.18 times, suggesting that Clorox collects its receivables approximately 10 times a year. The trend indicates effective management of credit and collection policies.

3. Payables Turnover:
The payables turnover data is limited, with values provided for some periods only, ranging from 5.54 to 7.56 times. This indicates how many times Clorox pays its suppliers within a given period, with the latest data showing a turnover of 5.54 times. More consistent data would provide a clearer picture of the company's payment practices.

4. Working Capital Turnover:
The working capital turnover ratio, with data available for selected periods, shows significant fluctuations. The turnover ranges from 11.04 to 147.42 times. A higher ratio suggests that Clorox efficiently utilizes its working capital to generate sales revenue. The current turnover rate, at 147.42, indicates a high level of sales relative to the working capital invested.

In summary, The Clorox Company demonstrates efficiency in managing its inventory and receivables, with stable turnover ratios. While the payables turnover data is limited, the working capital turnover suggests effective utilization of resources to drive sales.

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Average number of days

The Days of Inventory on Hand (DOH) for The Clorox Company have shown fluctuations over the past several quarters. The company managed to reduce its inventory holding period from 55.58 days in March 2022 to 39.83 days in March 2020, indicating improved inventory management efficiency. However, the DOH increased to 49.60 days in June 2022 before declining to 39.83 days in December 2023.

In terms of Days of Sales Outstanding (DSO), the company has seen variability in collecting its receivables efficiently. The DSO decreased from 35.58 days in March 2020 to 29.64 days in December 2021, suggesting quicker collection of receivables. However, the DSO increased to 35.85 days in June 2024, indicating a decline in receivables collection efficiency compared to recent quarters.

The number of days of payables was only available for some quarters, showing a reduction in the payment period from 64.99 days in December 2020 to 48.26 days in March 2020. However, data for more recent quarters is missing, making it difficult to assess the company's payment practices accurately.

Overall, The Clorox Company has displayed mixed performance in managing its activity ratios, with some improvements in inventory turnover and receivables collection observed over different periods, while the payable days data gaps limit the full picture of the company's overall working capital management.

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Long-term

The Clorox Company's long-term activity ratios show how efficiently the company is utilizing its assets to generate sales over time.

Fixed asset turnover has been relatively stable, ranging between 5.25 and 5.58 over the past several quarters. This indicates that for every dollar invested in fixed assets, the company is generating between $5.25 and $5.58 in sales. The consistency in this ratio suggests that Clorox is effectively using its fixed assets to drive revenue.

Total asset turnover, on the other hand, has shown more variability, fluctuating between 1.04 and 1.23. This ratio measures how well the company is utilizing all of its assets to generate sales. A higher total asset turnover indicates better efficiency in asset utilization. Clorox's total asset turnover has generally been above 1.0, indicating that the company is efficiently generating sales relative to its total asset base.

Overall, The Clorox Company appears to be effectively managing its assets to drive sales based on the fixed asset turnover and total asset turnover ratios. The stability in the fixed asset turnover ratio and the generally above-1.0 total asset turnover ratio suggest efficient asset utilization and effective revenue generation.