Procter & Gamble Company (PG)
Liquidity ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.73 | 0.63 | 0.65 | 0.70 | 0.85 |
| Quick ratio | 0.46 | 0.38 | 0.38 | 0.46 | 0.62 |
| Cash ratio | 0.28 | 0.23 | 0.22 | 0.32 | 0.49 |
Procter & Gamble Company's liquidity ratios have shown a declining trend over the past five years. The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, has decreased from 0.85 in 2020 to 0.73 in 2024. This indicates that the company may have more difficulty covering its short-term liabilities with its current assets.
The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has also shown a decreasing trend from 0.62 in 2020 to 0.46 in 2024. This suggests that Procter & Gamble may have limited ability to meet its immediate obligations without relying on inventory.
The cash ratio, the most conservative measure of liquidity as it only considers cash and cash equivalents, has decreased from 0.49 in 2020 to 0.28 in 2024. This indicates that Procter & Gamble's ability to cover its short-term liabilities solely with cash has weakened over the past five years.
Overall, the declining trend in all three liquidity ratios suggests that Procter & Gamble Company may need to improve its liquidity management strategies to ensure it can meet its short-term financial obligations effectively in the future.
See also:
Procter & Gamble Company Liquidity Ratios
Additional liquidity measure
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -19.25 | -18.21 | -22.74 | -25.39 | -21.06 |
The cash conversion cycle of Procter & Gamble Company has improved over the past five years. The company's ability to convert its resources into cash has become more efficient. In the most recent fiscal year, ending on June 30, 2024, the cash conversion cycle was recorded at -19.25 days, indicating that the company takes less time to convert its inventory into sales and then into cash.
Comparing this to the previous years, we see a positive trend. In June 2023, the cash conversion cycle was -18.21 days, and it improved further in June 2022, reaching -22.74 days. In June 2021 and June 2020, the company also showed efficiencies in managing its working capital, with cash conversion cycles of -25.39 days and -21.06 days, respectively.
Overall, the decreasing trend in the cash conversion cycle demonstrates Procter & Gamble Company's effectiveness in managing its operating cycle, inventory turnover, and accounts receivable collection. This efficiency is a positive indicator of the company's financial health and operational performance.