Procter & Gamble Company (PG)

Short-term

Turnover ratios

The activity ratios of Procter & Gamble (P&G) over the period from September 2020 through June 2025 provide insights into the company's operational efficiency, liquidity management, and receivables and payables management.

Inventory Turnover:
The inventory turnover ratio fluctuated within a narrow range, typically between approximately 5.45 and 6.25. This indicates that the company generally replenished its inventory about 5.5 to 6.25 times annually. The slight downward trend from a high of 6.25 in September 2020 to around 5.45 in June 2025 suggests a marginally increased holding period for inventory, which may reflect adjustments in inventory management strategies or shifts in product mix. Overall, the stability denotes consistent inventory management practices.

Receivables Turnover:
P&G maintained a relatively stable receivables turnover ratio, generally ranging from approximately 13.25 to 16.11. The ratio saw fluctuations but remained in a narrow band, indicating the speed with which the company collected its accounts receivable remained consistent. A higher receivables turnover indicates efficient credit and collection processes, while a slight decline toward 13.25 in late 2023 could signal a marginal slowdown in receivables collection or changes in credit policies.

Payables Turnover:
The payables turnover ratio mostly ranged from approximately 2.66 to 3.11 during the period. A higher ratio signifies faster payment to suppliers, whereas a lower ratio could imply extended payment terms. The fluctuations within this range suggest a relatively stable approach to managing payables, with some variation potentially tied to strategic negotiations or seasonal factors. Notably, the ratio dipped temporarily in June 2024 to 2.66 before returning closer to previous levels.

Working Capital Turnover:
The working capital turnover data are not available across the period, indicating that this ratio was either not computed or not reported during the specified timeline.

Summary:
Overall, P&G’s activity ratios reflect a consistent operational efficiency profile. Inventory management displayed slight variability but remained steady within established bounds. Receivables collection efficiency remained relatively unchanged, indicative of stable credit policies. Payables management also remained stable, with minor fluctuations indicating disciplined supplier payments. The absence of data on working capital turnover precludes conclusions in that area. These ratios collectively portray a well-managed operational framework aimed at balancing inventory levels, receivables collections, and payables payments strategically.

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Average number of days

The activity ratios for Procter & Gamble, encompassing days of inventory on hand (DOH), days of sales outstanding (DSO), and days of payables, exhibit notable temporal variations over the analyzed period from September 2020 through June 2025.

Days of Inventory on Hand (DOH):
The data indicates a relatively stable inventory management approach, with DOH fluctuating within a range roughly between 58.40 days (September 2020) and 66.95 days (June 2025). During 2020 and early 2021, the DOH remained predominantly around the low to mid-60s days, reflecting efficient inventory turnover consistent with the company's operational practices. From mid-2021 onward, there is a gradual upward trend, culminating in approximately 66.95 days in June 2025; this suggests a slight increase in inventory holding periods, which could indicate strategic inventory buildup or slower inventory turnover possibly driven by supply chain adjustments or inventory management strategies.

Days of Sales Outstanding (DSO):
The DSO figures display a more consistent pattern, averaging approximately 23 to 28 days over the period. Initial values in late 2020 hovered around the mid-20s days, reflecting a swift collection cycle aligned with typical industry standards. Throughout 2021 and into 2022, DSO generally remained stable around 23 to 26 days, with occasional minor fluctuations. The increase to approximately 27.24 days (September 2023) indicates a slight elongation in receivables collection, with subsequent minor variations maintained around the mid-26 days. This stability suggests that the company has maintained effective receivables management but has experienced modest increases potentially related to customer credit policies or economic factors affecting customer payments.

Number of Days of Payables:
The payable period demonstrates significant fluctuations over time, with values ranging from approximately 117 days (March 2023) to as high as 137.43 days (September 2024). Early periods show payables exceeding 120 days, indicating prolonged credit terms with suppliers. Notably, in mid-2024, the figure peaks at over 137 days, suggesting an aggressive extension of payment cycles or strategic postponement of payouts to optimize cash flows. Conversely, in March 2023, the payables period decreased to roughly 117 days, reflecting potential negotiations favoring shorter payment terms or improved supplier agreements.

Overall Observations:
The ratios collectively illustrate a stable but slightly evolving operational activity profile. The moderate increase in DOH may imply a strategic decision to hold inventory longer, possibly to meet demand fluctuations or enhance supply chain resilience. The relatively stable DSO underscores disciplined receivables collection, while the noticeable variability in payables points to deliberate management of payment terms to enhance liquidity. The interplay of these ratios suggests that Procter & Gamble manages its working capital through balancing inventory levels, receivables, and payables, with recent trends indicating a strategic inclination toward extending payment periods while maintaining controlled inventory and receivables.

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See also:

Procter & Gamble Company Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

The analysis of Procter & Gamble Company's long-term activity ratios reveals insights into the utilization and efficiency of its fixed assets and overall asset base over the specified periods.

Fixed Asset Turnover Ratio:
This ratio measures the company's ability to generate sales from its fixed assets, reflecting asset efficiency. The data indicates a generally upward trend from 3.47 on September 30, 2020, to a peak of 3.91 on September 30, 2022. Thereafter, slight fluctuations are observed, with the ratio declining marginally to 3.85 as of September 2023 before rising again to 3.82 by December 2024. Notably, after reaching a high point, the ratio stabilizes within a narrow range, suggesting that the company has maintained a consistent level of fixed asset efficiency with minor variations.

Total Asset Turnover Ratio:
This ratio assesses the overall efficiency in using all assets to generate sales. The data reflects a consistent upward movement from 0.60 in September 2020 to 0.70 by December 2023, indicating improved overall asset utilization over this period. Small fluctuations are evident, such as a slight decrease to 0.66 in September 2024 and subsequent minor increases. The ratio remains relatively stable around the 0.68 to 0.70 range, implying steady efficiency in managing total assets.

Summary:
Procter & Gamble demonstrates a trend of improving efficiency in both fixed assets and total assets over the analyzed timeframe. The fixed asset turnover shows a gradual increase with peaks around late 2022, suggesting better utilization of fixed assets relative to sales. The total asset turnover exhibits a consistent upward trend, indicating enhanced overall asset efficiency. The minor fluctuations following peak periods may reflect operational adjustments or shifts in asset management practices, but the overall pattern signifies a relatively stable and improving long-term asset utilization profile for the company.

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See also:

Procter & Gamble Company Long-term (Investment) Activity Ratios (Quarterly Data)