COMM 100: Colgate-Palmolive Financial Performance Analysis Report

This report presents a financial analysis of Colgate-Palmolive, examining its performance based on available data. It provides an overview of the company's assets, liabilities, and equity, along with key financial figures such as market share, net sales, and cash flow. The analysis delves into various financial ratios, including current ratio, quick ratio, gross profit ratio, net profit margin, inventory turnover, debtor turnover, and earnings per share. The report highlights trends in these ratios over the years 2016-2018, offering insights into the company's financial health and performance. The analysis concludes with a summary of the overall performance, noting any improvements or declines in the company's financial position. The report is a valuable resource for students studying finance, providing a real-world example of financial statement analysis.

Running head: COLGATE – PALMOLIVE FINANCIAL ANALYSIS
COLGATE – PALMOLIVE FINANCIAL ANALYSIS
Name of the Student:
Name of the University:
Author Note

1COLGATE – PALMOLIVE FINANCIAL ANALYSIS
Table of Contents
Answer to Question 8.................................................................................................................2
Answer to Question 9.................................................................................................................2
Answer to Question 10...............................................................................................................3
References..................................................................................................................................4

2COLGATE – PALMOLIVE FINANCIAL ANALYSIS
Answer to Question 8
Colgate – Palmolive Company is an America based diversified multinational
organisation. The main focus of the company is in the production, provision and distribution
of the personal care, household as well as health care products. These products includes, oral
hygiene products like toothpaste, toothbrush and like, soaps, detergent and like. The company
also produces the veterinary products under its “Hill’s” brand. The head quarter or the
corporate office is situated in the Midtown Manhattan, New York City (Colgatepalmolive).
The organisational structure of the Colgate – Palmolive Company includes the
following:
 Ian Cook is the Chairman as well as the CEO of the Colgate – Palmolive Company
 Noel Wallace is the President along with COO
 P. Justin Skala, is the Executive Vice President and Chief Growth & Strategy
Officer
 Henning Jakobsen, is the CFO of the firm
 Jennifer M. Daniels is the Chief Legal Officer and Secretary
Apart from above mention executive team, the Colgate – Palmolive Company also
have the total 10 Independent Directors in their Board of Directors (Colgate-Palmolive).
Answer to Question 9
To ascertain the financial status of any company, mainly the status of assets, liabilities
and equity is need to be ascertain. Hence, the in the basis of the annual report published by
the company for the year shows that the company have $ 12,161 million as the total asset and
$ 11,964 million as the total liabilities and $ 197 million as the total equity. While the current
share price of the Colgate – Palmolive Company as on 26th July, 2019 is $ 73.69
(colgatepalmolive).

3COLGATE – PALMOLIVE FINANCIAL ANALYSIS
Some other figures which also states financial status of Colgate – Palmolive Company
are that the Colgate – Palmolive Company is current market leader in Toothpaste industry
across the entire world. The Colgate – Palmolive Company have the highest market share of
the toothpaste industry in world wide. In 2018, the worldwide net sale of the company is
reported as $ 15.5 billion. The operating cash flow of the company in 2018 was $ 3.1 billion
while the company return the cash to its shareholder is the $ 2.8 billion and 2018 was the
consecutively 56 years of increasing the dividend by the company.
Answer to Question 10
Ratio Formula
Liquidity Ratio 2016 2017 2018
Current Ratio Current Asset/ Current Liabilities 1.3 1.4 1.1
Quick Ratio Liquid Assets/ Current Liabilities 1.0 1.0 0.8
Profitability Ratio
Gross Profit Ratio (Gross Profit/Net Sale)*100 60.0% 60.0% 59.4%
Net Profit Ratio (Net Profit/Net Sale)*100 16.1% 13.1% 15.4%
Operating Ratios
Inventory Ratio Net Sale/ Inventory 13.0 12.7 12.4
Debtor Turnover Ratio Total Sales/ Account Receivables 10.8 10.4 11.1
Investors Ratio
Earnings per Share Net Profit/ No. of Equity Share 1.7 1.4 1.6
Years
To analyse financial performance of Colgate – Palmolive, this report calculates the
different financial ratios. The current ratio of Colgate shows growth in the year 2017
compared to 2016 but again it falls in 2018. The quick ration of the firm is also shows the
declining trend in the last three years. The gross profit ratio of the firm can be consider as
good as this remain around 60% in the last three years. While, net profit margin of firm is
also high and stand in between the 13% to 16% in last three years. The inventory turnover
ratio of firm shows the decreasing trend, that is not a well for the company. On another side,
the debtor turnover ratio of firm is increasing. Finally, the earning per share of Colgate is also

4COLGATE – PALMOLIVE FINANCIAL ANALYSIS
going down each year. The overall performance of the company is decreased in the 2018
compared to 2017 and 2016.

5COLGATE – PALMOLIVE FINANCIAL ANALYSIS
References
Colgatepalmolive. "About Colgate | Colgate - Palmolive." Colgatepalmolive.com. N.p., 2019.
Web. 28 July 2019.
Colgate-Palmolive. "Executive Team | Colgate-Palmolive." Colgatepalmolive.com. N.p.,
2019. Web. 28 July 2019.
colgatepalmolive. Investor.colgatepalmolive.com. N.p., 2018. Web. 28 July 2019.