Financial Performance and Position Analysis: P&G vs Colgate Palmolive

This report provides a comparative financial analysis of Procter & Gamble (P&G) and Colgate Palmolive. It examines their financial performance over several years, focusing on revenue, operating profit, EBITDA margin, and net profit margin. The analysis includes a discussion of return on assets (ROA) to assess management efficiency and resource utilization. The report highlights key differences in their financial strategies and performance, concluding that while both companies operate efficiently, their approaches to wealth maximization and social responsibility differ. P&G is presented as a company with a global business operation and a strong mission, while Colgate Palmolive is highlighted for its efficient management focused on profit generation. The report uses visual aids like graphs and charts to support the analysis and includes a bibliography of cited sources.

Running head: FINANCIAL MANAGEMENT
Financial Management
Name of the Student:
Name of the University:
Author’s Note:

1FINANCIAL MANAGEMENT
Table of Contents
Consolidated findings......................................................................................................................2
Bibliography....................................................................................................................................6

2FINANCIAL MANAGEMENT
Consolidated findings
The Procter and Gamble is a well-established and renowned multination company in the
consumer products industry. The company is known for its quality products and involvement in
various social activities and social contribution. The company is having its presence all over the
globe having headquarter in America. On the other hand, the Colgate Palmolive Company is also
an American Consumer Products company. Both the companies are predicting and selling
various consumer products globally. Hence, a comparison of financial performance and financial
position of these two companies is significant.
Procter and Gamble is having a wide customer base which helped them to earn a
significant amount of revenue over the years. Compared to the Procter and Gamble, the Colgate
Palmolive is having a lower amount of turnover in all the last four years. It can be observed that
for the companies, the revenue has been decreasing for the in the year 2016 and 2017, and again
in 2018 a marginal increase in revenue can be found.

3FINANCIAL MANAGEMENT
From the above graph it can easily be understood that, the Procter and Gamble is having
a higher amount of turnover than the Colgate Palmolive. Though there was a decline in the total
revenue for the year 2016 and 2017, a marginal increase in operating profit can be observed for
bot h the companies in the year 2016 and 2017, but again the a decrease in operating profit in the
year 2018 can be observed1.
Procter and Gamble is having lower EBITDA margin for all the last four years and it was
20.58% in the year 2017 which was the highest in the last four years2. In the year 2016 the
Colgate Palmolive was the highest EBITDA margin of 26.03%. Following bar chart can present
it in a better way.
Though the EBIDTA margin was higher for all the last four years for the Colgate
Palmolive, the net profit margin was significantly high for the Procter and Gamble as compared
to the Colgate Palmolive. It implies, the Procter and Gamble is having higher management
efficiency that the Colgate Palmolive.
1 Burtonshaw-Gunn, Simon A. Risk and financial management in construction. Routledge, 2017.
2 Investor Relations | P&G. Pginvestor.com. N. p., 2020. Web. 10 Jan. 2020.

4FINANCIAL MANAGEMENT
Return on assets, is the measure of management efficiency and the efficient utilization of
assets and resources of the company. It can be observed from the analysis of return on assets of
both of the company, the Colgate Palmolive is having higher return on assets as compared to the
Procter and Gamble. Colgate Palmolive is completely a profit oriented company and hence, their
all the business strategies are oriented towards earning higher return3. On the other hand, Procter
and Gamble is a sustainable company oriented towards to increase in social welfare as a whole.
Hence their strategies are oriented towards betterment of the society. Therefore, the higher return
of assets of the Colgate Palmolive is a result their efficient management strategies. Following bar
chart can be used for a side by side comparison of their return on assets.
From the above analysis and discussion, it can be concluded that, the Procter and Gamble
is having a global business operation with their strong mission and vision and operating
efficiently since a long back. On the other hand, Colgate Palmolive is also having an efficient
management in achieving their wealth maximization objective4.
3 Investor Center | Colgate-Palmolive Company. Colgate-Palmolive Company. N. p., 2020. Web. 10 Jan. 2020.
4 Khan, M. Y., and P. K. Jain. Financial Management: Text, Problems and Cases, 8e. McGraw-Hill Education, 2018.

5FINANCIAL MANAGEMENT

6FINANCIAL MANAGEMENT
Bibliography
Burtonshaw-Gunn, Simon A. Risk and financial management in construction. Routledge, 2017.
Investor Center | Colgate-Palmolive Company. Colgate-Palmolive Company. N. p., 2020. Web.
10 Jan. 2020.
Investor Relations | P&G. Pginvestor.com. N. p., 2020. Web. 10 Jan. 2020.
Khan, M. Y., and P. K. Jain. Financial Management: Text, Problems and Cases, 8e. McGraw-
Hill Education, 2018.