The Clorox Company (CLX)
Cash conversion cycle
| Mar 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 60.19 | 54.36 | 52.23 | 57.41 | 58.81 | 56.25 | 61.40 | 56.69 | 60.19 | 60.08 | 60.70 | 60.41 | 64.23 | 67.70 | 66.91 | 66.27 | 61.82 | 55.49 | 51.14 | 45.30 |
| Days of sales outstanding (DSO) | days | 31.05 | 30.72 | 29.08 | 35.76 | 34.07 | 33.90 | 30.14 | 33.99 | 34.51 | 31.00 | 31.73 | 34.97 | 33.89 | 29.33 | 33.01 | 30.03 | 31.20 | 29.88 | 35.06 | 35.19 |
| Number of days of payables | days | 191.08 | 134.06 | 129.43 | 85.62 | 144.24 | 141.62 | 145.10 | 83.17 | 141.02 | 128.75 | 127.27 | 76.81 | 125.99 | 127.46 | 134.85 | 81.95 | 129.84 | 125.46 | 133.61 | 57.37 |
| Cash conversion cycle | days | -99.85 | -48.99 | -48.13 | 7.56 | -51.35 | -51.46 | -53.56 | 7.51 | -46.32 | -37.67 | -34.84 | 18.57 | -27.86 | -30.42 | -34.92 | 14.35 | -36.82 | -40.09 | -47.40 | 23.12 |
March 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 60.19 + 31.05 – 191.08
= -99.85
The Clorox Company’s cash conversion cycle (CCC) from June 30, 2020, through March 31, 2025, demonstrates significant fluctuations with notable periods of negative values, indicating the company’s operational efficiency in managing its working capital and receivables versus payables and inventory.
Initially, the CCC was positive at 23.12 days as of June 30, 2020, suggesting that the company took more time in converting inventory into cash relative to its payables and receivables. However, by September 30, 2020, the cycle sharply shifted to a negative -47.40 days, indicating that the company was able to generate cash from operations more quickly than it paid its suppliers or managed inventory, thus operating with an extended cash benefit period.
Throughout the subsequent periods, the CCC predominantly remained negative, often significantly so, with values such as -40.09 days (December 31, 2020), -36.82 days (March 31, 2021), and continuing into negative territory with declining magnitude, such as -37.67 days (December 31, 2022) and reaching as low as -99.85 days on March 31, 2025. This persistent negativity implies that Clorox consistently maintains a highly efficient working capital cycle, likely driven by prompt receivables collection, optimized inventory management, and favorable terms with suppliers.
The periods of positive CCC observed, such as 14.35 days on June 30, 2021, and 18.57 days on June 30, 2022, appear as brief deviations amidst a broader trend of negative cycles. These brief positive periods could reflect temporary operational adjustments or seasonal inventory build-ups.
The pattern of increasing negativity, especially in the later periods, suggests either improved operational efficiencies, strategic management of payables to extend payment periods, or accelerated receivables and inventory turnover. As of March 31, 2025, the CCC reaches -99.85 days, indicating that Clorox is simultaneously collecting cash from customers, managing inventory, and paying suppliers in such a manner that cash converts into usable capital exceedingly rapidly.
In summary, The Clorox Company has demonstrated robust and sustained operational efficiency characterized by a predominantly negative cash conversion cycle over the analyzed period. This configuration signifies the company's ability to generate cash faster than it disburses for inventory and payables, reflecting effective liquidity and working capital management.