Procter & Gamble Company (PG)
Cash conversion cycle
| 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 |
| Cash conversion cycle | days | -41.28 | -48.02 | -39.88 | -45.49 | -53.45 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 66.95 + 26.78 – 135.02
= -41.28
The cash conversion cycle (CCC) of Procter & Gamble Company, as of the specified dates, demonstrates a trend of negative values, indicating that the company effectively manages its working capital by collecting receivables and disbursing payables in a manner that results in the cash cycle operating in a net inflow position.
Analyzing the data from June 30, 2021, through June 30, 2025, reveals that the CCC has remained consistently negative throughout this period, with slight fluctuations. Specifically, on June 30, 2021, the CCC was approximately -53.45 days, suggesting that the company was able to generate cash from sales before paying its suppliers by about 53 days. Over the subsequent years, the CCC moved towards less negative values, reaching around -45.49 days in 2022, and further to -39.88 days in 2023. This indicates a reduction in the effective time period where the company benefits from cash inflows relative to outflows.
In the following periods, however, the CCC experienced some oscillations, becoming more negative again to approximately -48.02 days in 2024, before slightly improving to -41.28 days in 2025. Despite these fluctuations, the overall trend within this four-year span points to a relatively stable operational cycle characterized by prompt cash inflows coupled with efficient inventory and receivables management.
In summary, Procter & Gamble's consistently negative cash conversion cycle signifies a highly efficient cash management system, often outpacing its payables and inventory turnover, allowing the company to operate with a favorable working capital cycle. The minor variations observed indicate responsive adjustments to operational or market conditions but do not signal significant deterioration or improvement of the core cash flow efficiency over this period.