The Clorox Company (CLX)
Cash conversion cycle
| Jun 30, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 49.06 | 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 |
| Days of sales outstanding (DSO) | days | 42.18 | 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 |
| Number of days of payables | days | 78.61 | 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 |
| Cash conversion cycle | days | 12.63 | -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 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 49.06 + 42.18 – 78.61
= 12.63
The Clorox Company's cash conversion cycle (CCC) over the period from September 2020 through June 2025 exhibits notable fluctuations, reflecting variations in the company's operational efficiency in managing its working capital components.
Between September 2020 and March 2021, the CCC remained negative, averaging approximately -36 days, indicating that the company's cash inflows from receivables and inventory liquidation were generally received before the payment of its payables, thus suggesting a favorable cash flow position. During this period, the negative CCC was relatively stable, with slight improvements, reaching as low as -47.40 days in September 2020.
Starting from June 2021, the CCC experienced a significant shift toward positive territory, reaching a peak of approximately 18.57 days in June 2022. This shift indicates that during this interval, the company's payables period lengthened relative to its receivables and inventory cycles, or receivables and inventory cycles shortened, leading to a period where cash outflows slightly preceded inflows. This transition suggests potential extended credit terms given by suppliers or changes in inventory management practices.
Subsequent periods showed a return to negative CCC values, though generally less negative than the initial period, with values oscillating between approximately -30 days to -37 days. Notably, during September 2021 through December 2023, the CCC remained predominantly negative, hinting at improved working capital efficiency, where the company recovered cash from operations before settling payables.
However, a marked deviation occurred in June 2024 and March 2025, where the CCC shifted to positive values, reaching as high as 12.63 days in June 2025. The most substantial fluctuation is observed in March 2025, with a positive CCC of approximately -99.85 days, suggesting an extended period where payables exceeded receivables and inventory cycles, possibly due to strategic changes in payment terms, inventory build-up, or receivables collection.
Overall, the longer-term trend indicates periods of enhanced cash flow efficiency as reflected by negative CCC values, interspersed with intervals where the cycle lengthened or briefly became positive, potentially impacting liquidity and working capital management. These fluctuations underscore the dynamic nature of Clorox’s operational cycles and warrant close monitoring for implications on cash flow stability and operational flexibility.