The Clorox Company (CLX)
Cash conversion cycle
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 44.03 | 40.85 | 49.60 | 49.81 | 35.66 |
| Days of sales outstanding (DSO) | days | 35.89 | 34.47 | 35.52 | 30.48 | 35.76 |
| Number of days of payables | days | 65.66 | 59.92 | 63.07 | 61.59 | 45.16 |
| Cash conversion cycle | days | 14.26 | 15.39 | 22.05 | 18.69 | 26.25 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 44.03 + 35.89 – 65.66
= 14.26
The cash conversion cycle for The Clorox Company has shown a fluctuating trend over the past five years. In 2024, the cash conversion cycle improved to 14.26 days compared to 15.39 days in 2023. This indicates that the company is efficiently managing its working capital and converting inventory to cash faster.
In comparison to 2022, where the cash conversion cycle was 22.05 days, there has been a significant improvement in 2024, reflecting better liquidity management and operational efficiency.
Similarly, when looking at 2021 and 2020, where the cash conversion cycle was 18.69 days and 26.25 days respectively, it is evident that The Clorox Company has made noticeable progress in optimizing its cash conversion cycle over the years.
Overall, the decreasing trend in the cash conversion cycle indicates that the company is effectively managing its inventory, accounts receivable, and accounts payable, leading to quicker cash generation and improved operational performance.