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Procter andGamble
Financial Analysis
Presented by:
Cindy Tran
Yin Huang
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Company Profile
Was founded in 1837.
Headquartered in Cincinnati, Ohio
Owns and operates 39 manufacturing in23 states
Plus 103 manufacturing Facilities in 42other countries.
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Productions
Products:
Beauty.
HouseholdCare.
Health andWell-Being.
Over 250 different brands
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Competitors
Johnson and
Johnson
Kimberly Clark
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Liquidity Analysis
Liquidity Analysis P&G
Johnson &
Johnson
Kimberly
Clark
Net working capital ($5,323,000) $56,579,000 $990,000
Current ratio 0.81 2.51 1.12
Quick ratio 0.37 0.68 0.74
Cash ratio 0.1 0.42 0.16
Net working capital to total
assets ratio -0.04 0.55 0.16
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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
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Profitability Analysis
Profitability Analysis P&G
Johnson &
Johnson
Kimberly
Clark
Profit Margin 13.92% 17.69% 8.11%
Operating Margin 18.55% 25.42% 13.70%
Return on Assets 7.42% 10.08% 9.80%
Inventory Turnover 5.52 3.49 5.56
Return on Equity 17.00% 24.00% 31.00%
Total Asset Turnover 0.6 0.6 0.9
Earnings Per Share 3.93 4.18 4.19
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Common SizeStatements Comparison
P&G%
Johnson &
Johnson %
Kimberly
Clark %
Income
Statement
Sales $82,559,000 100.00% $61,587,000 100.00% $19,746,000 100.00%
COGS
$40,768,000 49.38% $18,792,000 30.51% $13,196,000 66.83%Gross Profit $41,791,000 50.62% $42,795,000 69.49% $6,550,000 33.17%
Taxes $3,392,000 4.11% $3,613,000 5.87% $788,000 3.99%
Net Income $11,797,000 14.29% $13,334,000 21.65% $1,843,000 9.33%
Balance Sheet
Total Assets $138,354,000 100.00% $102,908,000 100.00% $19,864,000 100.00%
Cash $2,768,000 2.00% $19,355,000 18.81% $876,000 4.41%
Inventory $7,379,000 5.33% $5,378,000 5.23% $2,373,000 11.95%
Receivables $7,415,000 5.36% $11,998,000 11.66% $2,877,000 14.48%
Investments --
-- $767,000 3.86%
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Change in Financials
P&G Current Year Prior Year % Change
Income Statement
Sales $82,559,000 $78,938,000 4.59%
Gross Profit$41,791,000 $41,019,000
1.88%
Operation Income or
Loss $15,818,000 $16,021,000-1.27%
Net Income $11,797,000 $12,736,000 -7.37%
Balance Sheet
Total Current Assets $21,970,000 $18,782,000 16.97%
Total Assets $138,354,000 $128,172,000 7.94%
Total Current Liabilities $27,293,000 $24,282,000 12.40%
Total Liabilities $70,714,000 $67,057,000 5.45%
Total Stockholder Equity $68,001,000 $61,439,000 10.68%
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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 babywipes, Charmin toilet tissue and
Bounty paper towels.
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P&G stable outlook
P&G's well-
diversified :
Less than 40% of its sales fromNorth America, while 35%come from developing marketsin Asia and Latin America.
This helps cushion business oreconomic shocks from anyparticular region, which lendsit added stability.
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All of this has been reflected in thestock price, which remainedrelatively stable during the
economic downturn from 2007,
2008.
The forecast for fourth-quarterearnings of 80 cents to 85 cents a
share
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Conclusion
P&G frequently ranks among the most innovative andadmired companies in the U.S.
P&G products have been stable for over 170 years
backed by innovation, which shall help it maintain andeven grow its market share in the future as well.
P&G spent around $2 billion for R&D department forthe 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 dividendpayout ratio, which is around 48% of the cash itgenerates.
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Sources
Trefis http://www.dailyfinance.com/2011/05/12/why-pandg-
is-a-great-stock-to-hold-into-retirement/
http://galenet.galegroup.com.libproxy.utdallas.edu/ser vlet/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
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