The Clorox Company (CLX)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 44.14 | 45.13 | 39.83 | 43.65 | 40.95 | 44.02 | 48.40 | 49.38 | 49.60 | 55.58 | 54.67 | 53.45 | 52.55 | 48.83 | 46.47 | 43.04 | 38.10 | 39.83 | 46.20 | 47.52 |
| Days of sales outstanding (DSO) | days | 35.85 | 34.65 | 34.47 | 30.59 | 34.47 | 35.04 | 31.47 | 32.21 | 35.52 | 34.22 | 29.64 | 33.35 | 30.34 | 31.51 | 30.18 | 35.43 | 35.58 | 42.12 | 32.77 | 33.23 |
| Number of days of payables | days | 65.83 | — | — | — | 60.07 | — | — | — | 63.07 | — | — | — | 64.99 | — | — | — | 48.26 | — | — | — |
| Cash conversion cycle | days | 14.16 | 79.78 | 74.30 | 74.24 | 15.35 | 79.06 | 79.87 | 81.59 | 22.05 | 89.81 | 84.31 | 86.80 | 17.90 | 80.34 | 76.65 | 78.47 | 25.43 | 81.95 | 78.97 | 80.75 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 44.14 + 35.85 – 65.83
= 14.16
The cash conversion cycle of The Clorox Company fluctuated over the past few quarters, indicating variations in efficiency in managing its cash flow and working capital. The company's cash conversion cycle measures the time it takes for Clorox to convert its resources invested in inventory and accounts receivable into cash.
Looking at the data, we can see that the company's cash conversion cycle has ranged from as low as 14.16 days to as high as 89.81 days over the analyzed period. A lower cash conversion cycle is generally considered favorable as it suggests that the company is efficiently managing its working capital and converting its inventory and receivables into cash quickly.
In the most recent quarter, the cash conversion cycle was 14.16 days, indicating improved efficiency compared to the previous quarter. However, in some quarters, such as March 2022 and September 2022, the cash conversion cycle exceeded 80 days, signaling potential issues with working capital management.
Overall, The Clorox Company should aim to continue monitoring and improving its cash conversion cycle to ensure the efficient management of its working capital, optimize cash flow, and enhance overall financial performance.