Procter & Gamble Company (PG)

The analysis of Procter & Gamble Company's cash conversion cycle (CCC) over the specified period indicates a generally negative cycle, reflecting a pattern where the company's operating cycle allows it to generate cash before settling its payables.

From September 30, 2020, through June 30, 2025, the CCC has fluctuated within a relatively narrow negative range, with values spanning approximately from -53.45 days to -28.94 days. The overall trend shows some variability, but the cycle predominantly remains negative, with occasional deviations toward less negative values.

Between September 2020 and June 2021, the CCC remained consistently negative around -38 days, signifying that the company's receivables and inventory management combined allowed it to generate cash earlier than its payables are due. A notable deepening occurs in June 2021, when the cycle extended to -53.45 days, suggesting an increased efficiency or a strategic extension of payables, leading to a longer period before cash outflows.

Subsequently, from September 2021 to March 2022, the cycle slightly moderated, fluctuating between -36 and -45 days, but generally maintained a negative status, indicating sustained efficient working capital management. The period from June 2022 onwards shows more variability, with the CCC dipping as high as -36.16 days in September 2022, and then improving to -30.07 days by December 2022.

The subsequent period exhibits some instability, with the cycle alternating between approximately -28 and -48 days, reflecting potential operational adjustments, seasonal effects, or strategic changes in receivables, inventory, or payables management. Notably, in June 2024, the cycle reaches around -48.02 days, the most negative in this recent period, suggesting the company was able to extend its payables significantly relative to its receivables and inventory turnover.

Throughout this interval, the overall trend remains negative, which is characteristic of highly efficient working capital practices, enabling the company to effectively leverage its payables to finance its operations. The negative cycle implies that Procter & Gamble generally receives cash inflows from sales before needing to pay suppliers, strengthening liquidity and reducing the need for external financing.

In conclusion, Procter & Gamble's cash conversion cycle, consistently negative over the analyzed period, indicates effective management of receivables, inventory, and payables. The observed fluctuations point to strategic operational adjustments, but the overarching trend underscores the company's capacity to generate cash ahead of its payables, underpinning a robust liquidity position.