Procter & Gamble Company (PG)

Activity ratios

Short-term

Turnover ratios

	Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Inventory turnover	5.45	5.82	6.05	6.09	6.20
Receivables turnover	13.63	13.74	14.99	15.59	16.11
Payables turnover	2.70	2.66	2.93	2.83	2.70
Working capital turnover	—	—	—	—	—

The activity ratios for Procter & Gamble over the period from June 30, 2021, to June 30, 2025, indicate the company's efficiency in managing its working capital components.

Inventory turnover has exhibited a gradual decline over the observed period, decreasing from 6.20 in 2021 to 5.45 in 2025. This trend suggests that the company is holding inventory slightly longer before selling, which could reflect changes in sales cycles, inventory management strategies, or product mix.

Receivables turnover has also shown a downward trend, moving from 16.11 in 2021 to 13.63 in 2025. This indicates that the company is taking more time, on average, to collect receivables, potentially impacting cash flow and liquidity.

Payables turnover has experienced minor fluctuations, going from 2.70 in 2021 to 2.83 in 2022, then slightly up to 2.93 in 2023, followed by decreases to 2.66 in 2024, and returning to 2.70 in 2025. These changes suggest a relatively stable approach to managing payables, with slight increases indicating longer payment periods at times, possibly to optimize cash flow.

The absence of data for working capital turnover over the analyzed years prevents a comprehensive assessment of how effectively the company is employed in generating sales from its working capital.

Overall, the declining trends in inventory and receivables turnovers indicate a slight decrease in operational efficiency, with longer average durations in inventory holding and receivable collection. The stability in payables turnover suggests consistent management of supplier payments, balancing cash flow needs with vendor relationships.

Average number of days

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Days of inventory on hand (DOH)	days	66.95	62.69	60.38	59.95	58.85
Days of sales outstanding (DSO)	days	26.78	26.57	24.35	23.41	22.66
Number of days of payables	days	135.02	137.29	124.61	128.85	134.95

The analysis of Procter & Gamble Company's activity ratios over the period from June 30, 2021, to June 30, 2025, reveals a pattern of gradual changes in inventory management, receivables collection, and supplier payment practices.

Days of Inventory on Hand (DOH):
The DOH has exhibited a consistent upward trend, increasing from approximately 58.85 days in 2021 to 66.95 days in 2025. This gradual increase suggests that the company has been holding inventory for a longer duration each year. The longer inventory holding period could indicate a strategic shift towards building higher inventory levels for anticipated sales or could reflect challenges in inventory turnover efficiency.

Days of Sales Outstanding (DSO):
The DSO figures have also maintained an upward trajectory, rising from 22.66 days in 2021 to approximately 26.78 days in 2025. This indicates a marginal extension in the time taken to collect receivables. The increase may point to either a deliberate extension of credit terms provided to customers or a slowdown in collection efforts, impacting overall cash conversion cycles.

Number of Days of Payables:
The days payable data shows some fluctuation, with a decrease from 134.95 days in 2021 to 124.61 days in 2023, followed by an increase back to around 137.29 days in 2024 before a slight decrease to 135.02 days in 2025. The overall trend suggests that the company has been extending its payment periods to suppliers over time, especially notable in 2024. Extended payable days can improve short-term cash flows but may impact supplier relationships if not managed carefully.

Overall Synthesis:
The combined trend indicates a lengthening of the company's operating cycle—from inventory accumulation and receivables collection to the extension of payables. This pattern often correlates with efforts to optimize working capital or adapt to changes in market conditions. However, such elongation can also pose risks of increased working capital requirements and potential strains on supplier relationships if credit terms are extended excessively.

In summary, Procter & Gamble's activity ratios depict a gradual build-up in the durations it holds inventory and receivables, paired with fluctuating but generally extended credit periods given to suppliers. These strategies could influence liquidity and operational flexibility, necessitating careful management to sustain efficiency and supplier relations.

Long-term

	Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Fixed asset turnover	—	3.65	3.74	3.78	3.51
Total asset turnover	0.67	0.69	0.68	0.68	0.64

The analysis of Procter & Gamble Company's long-term activity ratios, based on the provided data, reveals certain trends and stability in the company's utilization of its assets over the specified periods.

Fixed Asset Turnover Ratio:
- The fixed asset turnover ratio indicates how effectively the company utilizes its fixed assets (property, plant, and equipment) to generate sales.
- The ratio increased from 3.51 times on June 30, 2021, to 3.78 times on June 30, 2022, reflecting an improvement in asset efficiency.
- Subsequently, it experienced a slight decline to 3.74 times on June 30, 2023, and further decreased to 3.65 times on June 30, 2024.
- The trend suggests that while the company initially enhanced its fixed asset utilization, there has been a minor reduction in efficiency in the most recent year. This may be attributable to increased investments in fixed assets that have not yet translated into proportionate sales growth or operational adjustments.

Total Asset Turnover Ratio:
- The total asset turnover ratio measures overall efficiency in using all assets to generate sales.
- From June 30, 2021, to June 30, 2022, it increased from 0.64 to 0.68, indicating improved asset utilization.
- It remained stable at 0.68 in June 2023 and showed a slight positive shift to 0.69 in June 2024.
- A slight decrease is observed in the June 2025 figure, dropping to 0.67, but overall, the ratio remains relatively stable.
- The pattern suggests consistent overall asset efficiency, with minor fluctuations implying steady operational performance and asset management.

In conclusion, Procter & Gamble's long-term activity ratios demonstrate a generally stable asset utilization profile with recent slight declines in fixed asset efficiency. The company has maintained consistent overall asset turnover, reflecting ongoing effective management of its asset base over the analyzed periods.