Procter and Gamble Financial Analysis

Presented by: Cindy Tran Yin Huang

Company Profile

Was founded in 1837. Headquartered in Cincinnati, Ohio Owns and operates 39 manufacturing in 23 states Plus 103 manufacturing Facilities in 42 other countries.

Productions
Over 250 different brands Beauty. Household Care. Health and Well-Being.

Products:

Competitors
Johnson and Johnson Kimberly Clark

Liquidity Analysis
Liquidity Analysis Net working capital Current ratio Quick ratio Cash ratio Net working capital to total assets ratio P&G ($5,323,000) 0.81 0.37 0.1 -0.04 Johnson & Johnson $56,579,000 2.51 0.68 0.42 0.55 Kimberly Clark $990,000 1.12 0.74 0.16 0.16

Solvency Analysis
Solvency Analysis P&G Johnson & Johnson Kimberly Clark

Debt-to-equity ratio

1.04

0.82

2.27

Debt-to-total assets ratio

0.51

0.45

0.67

Profitability Analysis
Profitability Analysis Profit Margin Operating Margin Return on Assets Inventory Turnover Return on Equity Total Asset Turnover Earnings Per Share P&G 13.92% 18.55% 7.42% 5.52 17.00% 0.6 3.93 Johnson & Johnson 17.69% 25.42% 10.08% 3.49 24.00% 0.6 4.18 Kimberly Clark 8.11% 13.70% 9.80% 5.56 31.00% 0.9 4.19

Common Size Statements Comparison

P&G Income Statement Sales COGS Gross Profit Taxes Net Income Balance Sheet Total Assets Cash Inventory Receivables Investments $138,354,000 100.00% $102,908,000 100.00% $19,864,000 $2,768,000 $7,379,000 $7,415,000 2.00% 5.33% 5.36% $19,355,000 $5,378,000 $11,998,000 18.81% $876,000 100.00% 4.41% 11.95% 14.48% 3.86% $82,559,000 100.00% $40,768,000 $41,791,000 $3,392,000 $11,797,000 49.38% 50.62% 4.11% 14.29% $61,587,000 100.00% $19,746,000 $18,792,000 $42,795,000 $3,613,000 $13,334,000 30.51% $13,196,000 69.49% $6,550,000 5.87% $788,000 100.00% 66.83% 33.17% 3.99% 9.33% % Johnson & Johnson % Kimberly Clark %

21.65% $1,843,000

5.23% $2,373,000 11.66% $2,877,000 $767,000

Change in Financials
P&G Income Statement Sales Gross Profit Operation Income or Loss Net Income Balance Sheet Total Current Assets Total Assets Total Current Liabilities Total Liabilities Total Stockholder Equity $21,970,000 $138,354,000 $27,293,000 $70,714,000 $68,001,000 $18,782,000 $128,172,000 $24,282,000 $67,057,000 $61,439,000 16.97% 7.94% 12.40% 5.45% 10.68% $82,559,000 $41,791,000 $15,818,000 $11,797,000 $78,938,000 $41,019,000 $16,021,000 $12,736,000 4.59% 1.88% -1.27% -7.37% Current Year Prior Year % Change

P&G of the year 2011:

Profit rose 11% as sales increased across all its segments. Due to material cost and inflation, P&G was raising wholesale prices on Pampers diapers and baby wipes, Charmin toilet tissue and Bounty paper towels.

P&G stable outlook

Less than 40% of its sales from North America, while 35% come from developing markets in Asia and Latin America.

P&G's welldiversified :

This helps cushion business or economic shocks from any particular region, which lends it added stability.

All of this has been reflected in the stock price, which remained relatively stable during the economic downturn from 2007, 2008. The forecast for fourth-quarter earnings of 80 cents to 85 cents a share

Conclusion

P&G frequently ranks among the most innovative and admired companies in the U.S. P&G products have been stable for over 170 years backed by innovation, which shall help it maintain and even grow its market share in the future as well. P&G spent around $2 billion for R&D department for the year 2010. P&G bests its peers with a 14% cash-conversion ratio, which captures the company's operational efficiencies. This in turn helps P&G maintain a healthy dividend payout ratio, which is around 48% of the cash it generates.

Sources

Trefis http://www.dailyfinance.com/2011/05/12/why-pandgis-a-great-stock-to-hold-into-retirement/ http://galenet.galegroup.com.libproxy.utdallas.edu/servlet/BC RC?rsic=PK&rcp=CO&vrsn=unknown&locID=txshracd2602&src htp=cmp&cc=1&c=1&mode=c&ste=60&tab=1&tbst=tsCM&cc mp=Procter+and+Gamble+Co.&tcp=procter+and+gamble&doc Num=DC307096&bConts=3 MATTJARZEMSKY http://online.wsj.com/article/SB100014240527487043304045 76290670603766358.html