Coty Inc (COTY)

Short-term

Turnover ratios

The analysis of Coty Inc.'s activity ratios reveals several significant trends and patterns over the specified period.

Inventory Turnover: The inventory turnover ratio fluctuated between 2.86 in June 2021 and 2.35 in June 2023, indicating a decrease in inventory efficiency during this interval. However, a recovery is observed with the ratio rising back to 2.85 in June 2024 before declining slightly to 2.61 in June 2025. This pattern suggests periods of inventory disposal efficiency, with some slowing or acceleration in inventory turnover likely influenced by inventory management strategies or sales dynamics.

Receivables Turnover: The receivables turnover reflects a decline from 13.30 in June 2021 to 9.07 in June 2023, indicating a lengthening of the receivables collection period over this timeframe. A subsequent improvement occurs with the ratio increasing to 12.70 in June 2024, followed by a slight decrease to 11.19 in June 2025. These changes suggest variability in credit policies and collection efficiency, affecting receivables management.

Payables Turnover: The payables turnover decreased from 1.60 in June 2021 to 1.39 in June 2023, then slightly increased to 1.55 in June 2024 before dropping significantly to 1.10 in June 2025. This decline indicates a lengthening in the time Coty Inc. takes to pay its suppliers, potentially reflecting changes in payment terms, cash flow management, or supplier negotiations.

Working Capital Turnover: Data for working capital turnover is not available across the examined periods, thereby precluding a comprehensive analysis in this regard.

Overall, the ratios depict a period of fluctuating operational efficiency, with inventory and receivables management experiencing certain challenges and subsequent adjustments. The payables turnover trend indicates a strategic shift toward extended supplier payment periods, which could impact liquidity and supplier relationships. The absence of working capital turnover data limits the ability to assess the company's overall operational cycle efficiency comprehensively.

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Average number of days

The activity ratios for Coty Inc., specifically Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, exhibit notable fluctuations over the analyzed period from June 30, 2021, to June 30, 2025.

Days of Inventory on Hand (DOH):
The DOH was 127.59 days as of June 30, 2021, slightly decreasing to 124.77 days by June 30, 2022. However, a significant increase occurred in the subsequent year, reaching 155.22 days on June 30, 2023, indicating a considerable accumulation of inventory. Following this peak, the DOH declined to approximately 128 days in June 2024 and showed a moderate rise to nearly 140 days by June 2025. The fluctuations suggest periods of inventory buildup, particularly in 2023, possibly reflecting changes in inventory management strategies or shifts in demand.

Days of Sales Outstanding (DSO):
The DSO increased from 27.43 days in June 2021 to 29.92 days in June 2022, and then experienced a notable rise to 40.25 days in June 2023, indicating a slowdown in collections or extended credit terms during that period. Subsequently, the DSO decreased to around 28.73 days in June 2024 before increasing again to 32.60 days in June 2025. These patterns illustrate periods of longer receivable collections, which may impact cash flow management.

Number of Days of Payables:
The number of days of payables rose from 228.62 days in June 2021 to 239.22 days in June 2022, and further increased to 262.76 days in June 2023. This indicates that the company delayed payments to suppliers over this period, possibly leveraging extended credit terms. However, in June 2024, the payables decreased to 235.47 days, before sharply increasing to 332.94 days in June 2025, representing an extensive extension in payable periods. The dramatic increase in 2025 suggests a significant shift in the company's payment policies or negotiation strategies with suppliers.

Summary:
Over the analyzed period, Coty Inc. experienced variability in its operational efficiency as reflected in these activity ratios. The inventory levels peaked notably in 2023, and receivables management saw periods of extension. Payables schedules also shifted markedly, especially in 2025, which could impact liquidity and supplier relationships. These ratio trends highlight strategic adjustments and operational challenges that may influence overall working capital management and cash flow dynamics.

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Long-term

The analysis of Coty Inc.'s long-term activity ratios reveals noteworthy trends over the specified periods.

The fixed asset turnover ratio demonstrates a significant improvement from June 30, 2021, to June 30, 2023. Specifically, it increased from 3.74 in 2021 to 7.41 in 2022, and further to 7.79 in 2023. This upward trajectory indicates a heightened efficiency in utilizing fixed assets to generate sales, suggesting that the company has optimized its fixed asset base or has experienced a favorable sales increase relative to its fixed assets during this period. The absence of data for 2024 and 2025 precludes any analysis of subsequent performance but points to a substantial enhancement in fixed asset utilization in the earlier years.

Conversely, the total asset turnover ratio exhibits a more modest but consistent improvement over the same period. It rose from 0.34 in 2021 to 0.44 in 2022 and remained steady at 0.44 in 2023. Projections indicate a slight increase to 0.51 in 2024, followed by a marginal decline to 0.49 in 2025. This ratio measures the efficiency of the total asset base in generating sales, and its upward trend suggests that Coty has gradually enhanced its overall asset utilization efficiency, with a notable jump between 2021 and 2022. The stabilization in 2023 and the projected slight fluctuations suggest a period of relative operational steadiness with ongoing efforts to optimize asset use.

In summary, Coty Inc. demonstrates a marked improvement in the efficiency of fixed asset utilization between 2021 and 2023, indicative of strategic asset management or sales growth relative to fixed assets. The total asset turnover ratio corroborates this trend with a steady increase, reflecting broader improvements in overall asset productivity. These trends collectively suggest positive operational efficiencies, although with some stabilization in the most recent period.