Economics Project Report: Financial Performance Analysis of P&G

This research paper presents a detailed financial analysis of Procter & Gamble (P&G) over the past five years. It examines the company's financial position and performance, considering both micro and macro economic factors influencing the business and industry. The analysis includes an evaluation of P&G's balance sheet, income statement, and cash flow statement, along with ratio analysis to assess profitability, liquidity, debt management, asset efficiency, and market value. The report highlights key trends, such as changes in asset growth, sales turnover, and cash flow, to provide insights into the company's financial strategies and overall performance. The research employs a quantitative approach, utilizing data from annual reports and financial websites to forecast the future financial health of the company. Desklib offers various study tools, including past papers and solved assignments.

Running Head: Economics
1
Project Report: Economics

Economics
2
Executive summary
The research paper briefs about the financial position and performance of the
company, Proctor and Gamble. The research paper includes the financial position and
performance of company of last 5 years. The report brief about the various micro and macro
economical factors of the company and the industry and explains that how the financial
performance of the company has been affected. It evaluates that whether the current position
of the company is good or not and how many changes have taken place into the financial
position of the company in last 5 years. The financial performance of the company of last 5
years have been evaluated and at the same time, the growth of the company’s financial
position and financial performance have been calculated to measure the performance and
forecast the future of the company.

Economics
3
Contents
Introduction.......................................................................................................................4
Company overview...........................................................................................................4
Purpose and scope.............................................................................................................4
Balance sheet....................................................................................................................5
Income statement..............................................................................................................6
Cash flow statement..........................................................................................................7
Ratio analysis....................................................................................................................8
Other values....................................................................................................................10
Conclusion and recommendation...................................................................................11
References.......................................................................................................................12
Appendix.........................................................................................................................14

Economics
4
Introduction:
Financial analysis is an examination on the financial information which is done by the
analyst or other related parties of an organization to make a decision about the business or for
the business. Basically, the financial analysis grades in the reallocation of the resources to
create specific information in context with the business. Financial analysis is the main key
tool which is required by the managers of a company to evaluate the performance of an
organization (Entwistle, 2015). Financial analysis process evaluates the financial data of the
company and assists the stakeholders and the management of the company to make a decision
about the performance of the company.
In the report, financial performance of the company of last 5 years have been
evaluated and at the same time, the growth of the company’s financial position and financial
performance have been calculated to measure the performance and forecast the future of the
company. The report brief about the various micro and macro economical factors of the
company and the industry and explains that how the financial performance of the company
has been affected.
Company overview:
Procter and Gamble co is an American company which is running its business at
international level. Headquarter of the company is at downtown Cincinnati in Ohio. The
company has been founded by British American William Procter and James gamble, an Irish
American. The main products of the company are cleaning agents, hygiene products, personal
care, beauty care; diagnostics’ products etc. the company has made various changes into its
operations to maintain the performance and the profitability level of the company (Home,
2018). Company has dropped the sales of 100 brands so that it could focus on the 65 brands
which generate 95% revenue of the company (Reuters, 2018). According to annual report
(2017), 95000 people are working with the company and the company is serving its product
worldwide except North Korea and Cuba.
Purpose and scope:
Objective of research:
The research paper has been prepared to evaluate the financial performance and the
position of P&G as well as forecast the future performance of the company on the basis of

Economics
5
last 5 year’s data. The main objectives of the research paper is to understand about the
financial concepts, financial analysis methods, the use of financial methods, interpretation
etc. It briefs that whether the financial performance of the company is good or not as well as
how the company in performing in context with the investor’s perception.
Data sources:
For the report and analysis on Procter and Gambles, data has been collected from the
annual reports, yahoo finance, Morningstar etc. Various financial websites have been used to
evaluate and analyze the performance of the company. The data sources are reliable and the
data has been collected in an honest way.
Research methodology:
For the research, quantitative approach has been used. The data of the company has
been collected from the reliable sources and have been evaluated on the basis of various
techniques of financial analysis. For the study, 5 year data of the company has been taken
into the concern. The data has been evaluated on the basis of various statistical methods and
in a descriptive way. Confidentiality has also been maintained while conducting the research.
Thus, it could be said that the research has been done in a reliable way and the honesty and
ethical values have been concerned.
Balance sheet:
Firstly, balance sheet of the company has been evaluated for the research part.
Balance sheet is one of the crucial financial statements of a business which states about the
financial performance of the company. It includes the total assets, total liabilities and
stockholder’s equity of the company. The balance sheet of P&G briefs about numerous
changes in last 5 years.
Asset growth of the company has been evaluated firstly and it has been recognized
that the current assets level of the company has been enhanced in 2016 but the 2017 report
explains about the decrement in the current assets level. In last 5 years, the growth rate of the
current assets of the company is 4.48% which briefs about positive financial performance of
the company and better liquidity position of the company (Annual Report, 2017).
The main assets of the company are inventory, receivables and PPE. The receivables
figure of last 5 years brief about -7.69% changes in the company and the inventory figures of

Economics
6
last 5 years brief about -9.24% changes (Morningstar, 2018). It explains that the inventory
level has been reduced and maintained by the company to manage the efficiency level and
cost level of the company.
In addition, the total PPE assets and the total assets of the company have been
evaluated and it has been found that the total growth rate of the company of last 5 years is -
4.89% and -3.44% which explains that the fixed assets level has been lowered by the
company to manage the performance of the company (Appendix).
Further, the liabilities and equity growth of the company has also been calculated and
evaluated to identify the exact changes in the company and analyze the performance of the
company. The current liabilities of the company brief the 0.52% positive changes in the
company. It express that the liquidity position of the company is quite better. In addition, the
total noncurrent liabilities of the company brief the -3.78% changes. It briefs that the total
liabilities of the company has also been lowered by -1.93% (Appendix).
Lastly, the stockholder’s equity of the company has been evaluated and it has been
recognized that the preferred stock of the company has been lesser but the level of retained
earnings have been enhanced. In total, the equity level of the company has been reduced by -
5.01%. It expresses that the financial position of the company has been lowered in last 5
years. The company has reduced the level of the resources to focus on the main brands of the
company which generates the maximum revenue (Wahlen, Baginski & Bradshaw, 2014).
The calculations and the evaluation on the balance sheet of the company expresses
about the financial strategy of the company. It express that the current changes in the
company is quite better in context with the current changes in the operations. The lesser the
resources company would have the lesser the wastage would be.
Income statement:
In addition, Income statement of the company has been evaluated for the research
part. Income statement is one of the crucial financial statements of a business which states
about the financial position of the company. It includes the total turnover, total cost of sales,
gross profit, operating profit and net profit of the company. The income statement of P&G
briefs about numerous changes in last 5 years.
Sales turnover of the company has been evaluated firstly and it has been recognized
that the current sales level of the company has been lowered in last 5 year. It explains about

Economics
7
the decrement in the sales position of the company (Bruce-Twum & Mensah, 2015). In last 5
years, the growth rate of the sales turnover of the company is -6.06% which briefs about
negative financial position of the company.
The gross profit level of the company has been evaluated further and it has been
recognized that the gross profit of the company has also been lowered by 5.90%. It explains
that the level of sales level reduction is higher than gross profit reduction level which express
about better position of the company (Appendix). The operating expenses, non operating
expenses and net profit of the company has been evaluated further to identify the changes of
the company so that a better conclusion could be made.
The operating expenses figure of last 5 years brief about -8.64% changes in the
company and the operating income figures of last 5 years brief about -1.29% changes
(Morningstar, 2018). It explains that the financial position of the company is bit better as the
expenses have been lowered by a great level though, the income level has not been lowered
that much.
In addition, the total net income of the company have been evaluated and it has been
found that the total net income of the company of last 5 years has been enhanced by 14.64%
which explains that the turnover of the company has been reduced still, the company has
managed to enhance the level of profits. It briefs the better position and the performance of
the company in terms of finance.
Cash flow statement:
In addition, cash flow statement of the company has been evaluated for the research
part. Cash flow statement is one of the crucial financial statements of a business which states
about the financial position of the company (Bruce-Twum & Mensah, 2015). It includes the
total operating cash flow, investing cash flow and financial cash flow of the company. The
cash flow statement of P&G briefs about numerous changes in last 5 years.
Total operating cash flow of the company has been evaluated firstly and it has been
recognized that the current cash flow position of the company has been lowered. Though, the
calculations explain about the decrement in the total cash flow of the company in last 5 years.
In last 5 years, the growth rate of the operating cash flow of the company is -3.30% which
briefs about negative cash flow position of the company (Appendix).

Economics
8
The investing cash flow of the company has been evaluated further and it has been
recognized that the investing cash flow of the company has been enhanced by 7.63%. It
explains that the company has shortened the investments. The investment expenses of the
company have been lowered and simultaneously, investing income of the company has been
enhanced.
The cash flow from financing activities has been evaluated further and it has been
found that the cash flow position of the company has been enhanced by 11.39%. It explains
that the cash flow position of the company is bit better as the level of cash outflow have been
lowered by a great level and thus cash position has been better (Annual report, 2017).
In addition, the free cash flow of the company have been evaluated and it has been
found that the total free cash flow of the company of last 5 years has been lowered by -2.66%
which explains that the cash flow position of the company has been reduced still, the
company has managed a good cash position.
Ratio analysis:
Ratio analysis is a process of evaluating and analyzing the financial statements. This
process evaluates the final financial statement of an organization and briefs the performance
of the company. In ratio analysis, performance of the company is evaluated on profitability
level, liquidity level, debt management level, asset efficiency level and market value
(Copeland, 1996). The process makes it easy for the managers and the investors of the
company to make better decisions about the company. For the research, P&G’s financial data
has been evaluated with the help of ratio analysis techniques.
Profitability ratio:
Profitability ratio is conducted firstly to analyze the capability of the company to
generate the profits (Fridson, 1996). The profitability ratio of P&G briefs the positive
changes into the performance. Return on capital employed of the company briefs about huge
positive changes and briefs that the company is generating great profit in context with the
long term capital. Further, the gross profit margin and operating profit margin of the company
also briefs that the level of profits of the company has been enhanced in 2017 in comparison
with 2013. It explains that the profit generation capabilities of the company have been better
and thus, the company is performing better in current scenario (Appendix).
Liquidity ratio:

Economics
9
Liquidity ratio is conducted further to analyze the capability of the company to pay
off its short term debt obligations. The liquidity ratio of P&G briefs the slight negative
changes into the position of the company. Current ratio of the company briefs about huge
lower level of current assets in context with the current liabilities of the company. Further,
the quick ratio of the company also briefs that the level of liquidity position of the company
has been lowered in 2017 in comparison with 2013 (Appendix). It explains that the liquidity
position and short term debt payment capabilities of the company have been lowered and
thus, the company is required to enhance the level of current assets.
Asset management ratio:
Assets management ratio is conducted in addition to analyze the capability of the
company to manage the assets, working capital and profits of the company. The asset
management ratio of P&G briefs the slight changes into the performance. Creditor’s turnover
ratio of the company briefs about high turnover days which means the company would be
able to manage the work in lesser working capital. Further, the inventory turnover days and
receivable turnover days of the company also briefs that the turnover days have been lowered
which means the cash would be received by the company quickly and less working capital
would be required (Appendix). It explains that the asset management and efficiency
capabilities of the company have been better and thus, the company is performing better in
current scenario.
Debt management ratio:
Additionally, debt management ratio is conducted to analyze the capital structure
position of the company. The debt management ratio of P&G briefs the slight changes into
the performance. Debt to equity ratio of the company briefs about lower changes and briefs
that the level of equity of the company is quite higher than the debt of the company. Further,
the debt ratio of the company also briefs that the debt level of the company in context with
the total assets of the company is better (Appendix). It explains that the company is required
to maintain the optimal capital structure so that the risk and cost of the company could be
managed.
Market value ratios:
Market value ratio is conducted lastly to analyze the performance of the company in
the industry. The market value ratios ratio of P&G briefs the positive changes into the

Economics
10
performance. Earnings per share of the company briefs huge positive changes and briefs that
the company is managing a good position in market (Appendix). Further, the dividend
coverage ratio of the company also briefs that the company has paid a great amount of
dividend to the shareholders. It explains that the market position of the company has been
better.
Other values:
After evaluating the financial statement of the company, various other financial and
non financial figures of the company has been evaluated. The tax rates of the company is
quite similar in last 5 years as no government regulations have been changed in context with
the taxation system of the country. Though, the total taxation amount of the company has
been lowered due to less sales turnover and lesser cash inflow of the company. Further,
WACC of the company has been evaluated and it has been found that the current WACC of
the company is 3.51%. The cost of debt of the company is 5.60% and the total weight of the
debt is 24.60%. On the other hand, the cost of equity is 2.83% and the weight is 75.40%. It
briefs that the cost of capital of the company is quite lower (Bloomberg, 2018).
In addition, the economic value added and market value added of the company has
been evaluated and it has been found that the economic and market position of the company
has been better. MVA analysis briefs about great position of the company. These calculations
brief that the company is a good option for the purpose of investment (Financial times, 2018).
Stock price of the company has been analyzed further to identify the changes into the
company. The stock price of the company has been fluctuated a lot in last 5 years. The
average changes in the stock price of the company in last 5 years are 0.67% which explains
that the stock price of the company has been enhanced.

Economics
11
Figure 1: Stock Price
(Yahoo Finance, 2018)
Lastly, some macro economical factors of the company have also been evaluated which
has impacted on the performance of the company. FT (2018) briefs the company has dropped
the sales of 100 brands so that it could focus on the 65 brands which generate 95% revenue of
the company. Further, the industry explains about various positive changes which have
impacted on the financial performance and the position of the company.
Conclusion and recommendation:
The research paper explains that the financial performance and the position of P&G
are quite better. Though, few negative changes have occurred into the financial performance
and position of P&G in last 5 years. But the average position of the company has been better.
It is suggested to the financial manager of the company to manage the liquidity position and
the optimal capital structure. Rest, all the financial strategies of the company is quite
competitive and briefs that the financial performance of the company is quite attractive and
the company is a good option for the investors to invest in the company for long term.
. Company has dropped the sales of 100 brands so that it could focus on the 65 brands which
generate 95% revenue of the company

Economics
12
References:
Annual report. (2018). Procter and Gamble. [Online]. Retrieved as on 13th April 2018 from
https://us.pg.com/annualreport2017/annual-report.html#/
Bloomberg. (2018). Rates and Bonds. [Online]. Retrieved as on 13th April 2018 from:
https://www.bloomberg.com/markets/rates-bonds/government-bonds/us
Bruce-Twum, E., & Mensah, C. C. (2015). Financial Statement Analysis. John Wiley &
Sons, Inc, New York.
Copeland, T. (1996). Valuation: Measurement and managing the value of companies: Second
edition. John Wiley & Sons, Inc, New York.
Entwistle, G. (2015). Reflections on teaching financial statement analysis. Accounting
Education, 24(6), 555-558.
Financial Times. (2018). Procter and Gamble. [Online]. Retrieved as on 13th April 2018 from
https://www.ft.com/content/1b802fa2-0797-11e8-9650-9c0ad2d7c5b5
Financial times. (2018). Procter and Gamble. [Online]. Retrieved as on 13th April 2018 from
https://www.ft.com/content/dff37c2c-1970-11e4-9745-00144feabdc0
Fridson, M. S. (1996). Financial statement analysis: Second edition. John Wiley & Sons, Inc,
New York.
Home. (2018). Procter and Gamble. [Online]. Retrieved as on 13th April 2018 from
https://us.pg.com/
Morningstar. (2018). Procter and Gamble. [Online]. Retrieved as on 13th April 2018 from
http://www.morningstar.com/stocks/xnys/pg/quote.html
Morningstar. (2018). Procter and Gamble. [Online]. Retrieved as on 13th April 2018 from
http://financials.morningstar.com/income-statement/is.html?t=0P000004GV&culture=en-
US&platform=sal
Reuters. (2014). P&G to sell up to 100 brands to revive sales, cut costs. [Online]. Retrieved
as on 13th April 2018 from https://www.reuters.com/article/us-procter-gamble-results/pg-to-
sell-up-to-100-brands-to-revive-sales-cut-costs-idUSKBN0G13WX20140804
Wahlen, J., Baginski, S., & Bradshaw, M. (2014). Financial reporting, financial statement
analysis and valuation. Nelson Education.

Economics
13
Yahoo Finance. (2018). Procter and Gamble. [Online]. Retrieved as on 13th April 2018 from
https://finance.yahoo.com/quote/PG/

Economics
14
Appendix:
PROCTER & GAMBLE CO (PG) CashFlowFlag INCOME STATEMENT
Fiscal year ends in June. USD in millions
except per share data.
2017-
06
2016-
06
2015-
06
2014-
06
2013-
06
Revenue 65058 65299 76279 83062 84167
Cost of revenue 32535 32909 38876 42460 42428
Gross profit 32523 32390 37403 40602 41739
Operating expenses
Sales, General and administrative 18568 18949 23585 25314 26950
Total operating expenses 18568 18949 23585 25314 26950
Operating income 13955 13441 13818 15288 14789
Interest Expense 465 579 626 709 667
Other income (expense) -233 507 -1346 306 721
Income before taxes 13257 13369 11846 14885 14843
Provision for income taxes 3063 3342 2916 3178 3441
Net income from continuing operations 10194 10027 8930 11707 11402
Net income from discontinuing ops 5217 577 -1786 78
Other -85 -96 -108 -142 -90
Net income 15326 10508 7036 11643 11312
Preferred dividend 247 255 259 253 244
Net income available to common
shareholders 15079 10253 6777 11390 11068
Earnings per share
Basic 5.8 3.8 2.5 4.19 4.04
Diluted 5.59 3.69 2.44 4.01 3.86
Weighted average shares outstanding
Basic 2598 2699 2712 2720 2743
Diluted 2740 2844 2884 2905 2931
EBITDA 16542 17026 15606 18735 18492
PROCTER & GAMBLE CO (PG) CashFlowFlag BALANCE SHEET
Fiscal year ends in June. USD in
millions except per share data.
2017-
06
2016-
06
2015-
06
2014-
06
2013-
06
Assets
Current assets
Cash
Cash and cash equivalents 5569 7102 6845 8558 5947
Short-term investments 9568 6246 4767 2128
Total cash 15137 13348 11612 10686 5947
Receivables 4594 4373 4861 6386 6508
Inventories 4624 4716 5454 6759 6909

Economics
15
Deferred income taxes 1507 1356 1092 948
Prepaid expenses 2139 2653 2853 3845 3678
Other current assets 7185 3510 2849
Total current assets 26494 33782 29646 31617 23990
Non-current assets
Property, plant and equipment
Gross property, plant and
equipment 40148 39866 41347 44427 43012
Accumulated Depreciation -20255 -20481 -21079 -22123 -21346
Net property, plant and equipment 19893 19385 20268 22304 21666
Goodwill 44699 44350 47316 53704 55188
Intangible assets 24187 24527 26829 30843 31572
Other long-term assets 5133 5092 5436 5798 6847
Total non-current assets 93912 93354 99849 112649 115273
Total assets 120406 127136 129495 144266 139263
Liabilities and stockholders'
equity
Liabilities
Current liabilities
Short-term debt 13541 11637 12001 15587 12427
Capital leases 13 16 20 19 5
Accounts payable 9632 9325 8257 8461 8777
Taxes payable 449 397 845 711 817
Accrued liabilities 2960 2978 3109 3689 3496
Other current liabilities 3615 6417 5558 5259 4515
Total current liabilities 30210 30770 29790 33726 30037
Non-current liabilities
Long-term debt 18000 18916 18297 19747 19085
Capital leases 38 29 32 64 26
Deferred taxes liabilities 8126 9113 9531 10218 10827
Pensions and other benefits 6820 8569 6997 7890 7740
Minority interest 594 642 631 762 645
Other long-term liabilities 840 1114 1167 1883 2194
Total non-current liabilities 34418 38383 36655 40564 40517
Total liabilities 64628 69153 66445 74290 70554
Stockholders' equity
Preferred stock 1006 1038 1077 1111 1137
Common stock 4009 4009 4009 4009 4009
Other Equity -14632 -15907 -12780 -7662 -7499
Additional paid-in capital 63641 63714 63852 63911 63538
Retained earnings 96124 87953 84807 84990 80197
Treasury stock -93715 -82176 -77226 -75805 -71966
Accumulated other -1249 -1290 -1320 -1340 -1352

Economics
16
comprehensive income
Total stockholders' equity 55184 57341 62419 69214 68064
Total liabilities and stockholders'
equity 119812 126494 128864 143504 138618
PROCTER & GAMBLE CO (PG) Statement of CASH FLOW
Fiscal year ends in June. USD in
millions except per share data.
2017-
06
2016-
06
2015-
06
2014-
06
2013-
06
Cash Flows From Operating Activities
Net income 15411 10604 7144 11785 11402
Depreciation & amortization 2820 3078 3134 3141 2982
Investment/asset impairment charges 450 2174 308
Deferred income taxes -601 -815 -803 -44 -307
Stock based compensation 351 335 337 360 346
Change in working capital -443 1640 614 -1461 681
Accounts receivable -322 35 349 87 -415
Inventory 71 116 313 8 -225
Other working capital -192 1489 -48 -1556 1321
Other non-cash items -4785 143 2008 177 -539
Net cash provided by operating
activities 12753 15435 14608 13958 14873
Cash Flows From Investing Activities
Investments in property, plant, and
equipment -3384 -3314 -3736 -3848 -4008
Acquisitions, net -491 -329 -1045 -24 -1145
Purchases of investments -4869 -2815 -3810 -829 -1726
Sales/Maturities of investments 1488 1447 1203 24
Other investing activities 1567 -564 4497 570 584
Net cash used for investing activities -5689 -5575 -2891 -4107 -6295
Cash Flows From Financing Activities
Debt issued 3603 3916 2138 4334 2331
Debt repayment -4931 -2213 -3512 -4095 -3752
Common stock repurchased -5204 -5734 -4604 -6005 -5986
Dividend paid -7236 -7436 -7287 -6911 -6519
Other financing activities 5200 2254 246 5398 6855
Net cash provided by (used for)
financing activities -8568 -9213
-
13019 -7279 -7071
Effect of exchange rate changes -29 -381 -411 39 4
Net change in cash -1533 266 -1713 2611 1511
Cash at beginning of period 7102 6836 8558 5947 4436
Cash at end of period 5569 7102 6845 8558 5947
Free Cash Flow
Operating cash flow 12753 15435 14608 13958 14873

Economics
17
Capital expenditure -3384 -3314 -3736 -3848 -4008
Free cash flow 9369 12121 10872 10110 10865
PROCTER & GAMBLE CO (PG) CashFlowFlag INCOME STATEMENT
Average
changes
Fiscal year ends in June. USD in
millions except per share data. 2017-06 2016-06 2015-06
2014-
06
Revenue -0.37% -14.39% -8.17% -1.31% -6.06%
Cost of revenue -1.14% -15.35% -8.44% 0.08% -6.21%
Gross profit 0.41% -13.40% -7.88% -2.72% -5.90%
Operating expenses
Sales, General and administrative -2.01% -19.66% -6.83% -6.07% -8.64%
Total operating expenses -2.01% -19.66% -6.83% -6.07% -8.64%
Operating income 3.82% -2.73% -9.62% 3.37% -1.29%
Interest Expense -19.69% -7.51% -11.71% 6.30% -8.15%
Other income (expense)
-
145.96%
-
137.67% -539.87%
-
57.56%
-
220.26%
Income before taxes -0.84% 12.86% -20.42% 0.28% -2.03%
Provision for income taxes -8.35% 14.61% -8.24% -7.64% -2.41%
Net income from continuing
operations 1.67% 12.28% -23.72% 2.67% -1.77%
Net income from discontinuing ops 804.16%
-
132.31%
-
2389.74%
Other -11.46% -11.11% -23.94% 57.78% 2.82%
Net income 45.85% 49.35% -39.57% 2.93% 14.64%
Preferred dividend -3.14% -1.54% 2.37% 3.69% 0.34%
Net income available to common
shareholders
Earnings per share
Basic 52.63% 52.00% -40.33% 3.71%
Diluted 51.49% 51.23% -39.15% 3.89%
Weighted average shares
outstanding
Basic -3.74% -0.48% -0.29% -0.84%
Diluted -3.66% -1.39% -0.72% -0.89%
EBITDA -2.84% 9.10% -16.70% 1.31%
PROCTER & GAMBLE CO (PG) CashFlowFlag BALANCE SHEET
Average
changes
Fiscal year ends in June. USD in
millions except per share data. 2017-06 2016-06 2015-06 2014-06
Assets

Economics
18
Current assets
Cash
Cash and cash equivalents -21.59% 3.75% -20.02% 43.90% 1.51%
Short-term investments 53.19% 31.03% 124.01% 69.41%
Total cash 13.40% 14.95% 8.67% 79.69% 29.18%
Receivables 5.05% -10.04% -23.88% -1.87% -7.69%
Inventories -1.95% -13.53% -19.31% -2.17% -9.24%
Deferred income taxes
-
100.00% 11.14% 24.18% 15.19%
-
12.37%
Prepaid expenses -19.37% -7.01% -25.80% 4.54%
-
11.91%
Other current assets
-
100.00% 104.70% 23.20% 9.30%
Total current assets -21.57% 13.95% -6.23% 31.79% 4.48%
Non-current assets
Property, plant and equipment
Gross property, plant and equipment 0.71% -3.58% -6.93% 3.29% -1.63%
Accumulated Depreciation -1.10% -2.84% -4.72% 3.64% -1.25%
Net property, plant and equipment 2.62% -4.36% -9.13% 2.94% -1.98%
Goodwill 0.79% -6.27% -11.89% -2.69% -5.02%
Intangible assets -1.39% -8.58% -13.01% -2.31% -6.32%
Other long-term assets 0.81% -6.33% -6.24% -15.32% -6.77%
Total non-current assets 0.60% -6.50% -11.36% -2.28% -4.89%
Total assets -5.29% -1.82% -10.24% 3.59% -3.44%
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt 16.36% -3.03% -23.01% 25.43% 3.94%
Capital leases -18.75% -20.00% 5.26% 280.00% 61.63%
Accounts payable 3.29% 12.93% -2.41% -3.60% 2.55%
Taxes payable 13.10% -53.02% 18.85% -12.97% -8.51%
Accrued liabilities -0.60% -4.21% -15.72% 5.52% -3.75%
Other current liabilities -43.67% 15.46% 5.69% 16.48% -1.51%
Total current liabilities -1.82% 3.29% -11.67% 12.28% 0.52%
Non-current liabilities
Long-term debt -4.84% 3.38% -7.34% 3.47% -1.33%
Capital leases 31.03% -9.38% -50.00% 146.15% 29.45%
Deferred taxes liabilities -10.83% -4.39% -6.72% -5.62% -6.89%
Pensions and other benefits -20.41% 22.47% -11.32% 1.94% -1.83%
Minority interest -7.48% 1.74% -17.19% 18.14% -1.20%
Other long-term liabilities -24.60% -4.54% -38.02% -14.18%
-
20.33%
Total non-current liabilities -10.33% 4.71% -9.64% 0.12% -3.78%
Total liabilities -6.54% 4.08% -10.56% 5.30% -1.93%

Economics
19
Stockholders' equity
Preferred stock -3.08% -3.62% -3.06% -2.29% -3.01%
Common stock 0.00% 0.00% 0.00% 0.00% 0.00%
Other Equity -8.02% 24.47% 66.80% 2.17% 21.36%
Additional paid-in capital -0.11% -0.22% -0.09% 0.59% 0.04%
Retained earnings 9.29% 3.71% -0.22% 5.98% 4.69%
Treasury stock 14.04% 6.41% 1.87% 5.33% 6.92%
Accumulated other comprehensive
income -3.18% -2.27% -1.49% -0.89% -1.96%
Total stockholders' equity -3.76% -8.14% -9.82% 1.69% -5.01%
Total liabilities and stockholders'
equity -5.28% -1.84% -10.20% 3.52% -3.45%
PROCTER & GAMBLE CO (PG) Statement of CASH FLOW
Average
changes
Fiscal year ends in June.
USD in millions except per
share data. 2017-06 2016-06 2015-06 2014-06
Cash Flows From Operating
Activities
Net income 45.33% 48.43% -39.38% 3.36% 14.44%
Depreciation & amortization -8.38% -1.79% -0.22% 5.33% -1.26%
Investment/asset impairment
charges -100.00% -79.30%
-
100.00% -93.10%
Deferred income taxes -26.26% 1.49% 1725.00% -85.67% 403.64%
Stock based compensation 4.78% -0.59% -6.39% 4.05% 0.46%
Change in working capital -127.01% 167.10% -142.03%
-
314.54% -104.12%
Accounts receivable
-
1020.00% -89.97% 301.15%
-
120.96% -232.45%
Inventory -38.79% -62.94% 3812.50%
-
103.56% 901.80%
Other working capital -112.89%
-
3202.08% -96.92%
-
217.79% -907.42%
Other non-cash items
-
3446.15% -92.88% 1034.46%
-
132.84% -659.35%
Net cash provided by
operating activities -17.38% 5.66% 4.66% -6.15% -3.30%
Cash Flows From Investing
Activities
Investments in property,
plant, and equipment 2.11% -11.30% -2.91% -3.99% -4.02%
Acquisitions, net 49.24% -68.52% 4254.17% -97.90% 1034.25%
Purchases of investments 72.97% -26.12% 359.59% -51.97% 88.62%
Sales/Maturities of 2.83% 20.28% 4912.50% 1645.21%

Economics
20
investments
Other investing activities -377.84% -112.54% 688.95% -2.40% 49.04%
Net cash used for investing
activities 2.04% 92.84% -29.61% -34.76% 7.63%
Cash Flows From Financing
Activities
Debt issued -7.99% 83.16% -50.67% 85.93% 27.61%
Debt repayment 122.82% -36.99% -14.24% 9.14% 20.18%
Common stock repurchased -9.24% 24.54% -23.33% 0.32% -1.93%
Dividend paid -2.69% 2.04% 5.44% 6.01% 2.70%
Other financing activities 130.70% 816.26% -95.44% -21.25% 207.57%
Net cash provided by (used
for) financing activities -7.00% -29.23% 78.86% 2.94% 11.39%
Effect of exchange rate
changes -92.39% -7.30%
-
1153.85% 875.00% -94.63%
Net change in cash -676.32% -115.53% -165.61% 72.80% -221.16%
Cash at beginning of period 3.89% -20.12% 43.90% 34.06% 15.43%
Cash at end of period -21.59% 3.75% -20.02% 43.90% 1.51%
Free Cash Flow
Operating cash flow -17.38% 5.66% 4.66% -6.15% -3.30%
Capital expenditure 2.11% -11.30% -2.91% -3.99% -4.02%
Free cash flow -22.70% 11.49% 7.54% -6.95% -2.66%
Economic Value
Added
Year 2015 2016 2017
NOPAT 15,653 16,601 16,857
Capital Cost - - -
Annual EVA 15,653 16,601 16,857

Economics
21
Current Value of
Cumulative EVA 12,936 15,092 16,857
NOPAT Return on Adjusted
Capital 13.7% 14.2%
Return Hurdle (cost of
capital) 10.0% 10.0% 10.0%
2 1 -
Value Added / -
Shortfall 3.7% 4.2%
Other Performance Measures
EBIT 12,928 13,259 13,794
EBITDA 13,077 13,441 13,965
Sales Growth -7.7% -0.4%
Operating Earnings Growth 2.8% 3.9%
Net Profit Growth -2.5% 9.9%
Operating Margin 18.5% 20.6% 21.5%
Net Profit Margin 13.5% 14.3% 15.8%
EBITDA Margin 18.3% 20.3% 21.2%
Market Value Added

Economics
22
2017 2016 2015 2014 2013
Market
capitalization 2,36,899 2,18,389 2,00,662 2,23,542 1,95,312
Capital invested 73,184 76,257 80,716 88,961 87,149
Annual
MVA 1,63,715 1,42,13
2
1,19,94
6
1,34,58
1
1,08,1
63
Capital structure
Price Cost Weight WACC
Debt 18,000 5.60% 24.60% 0.013774
Equity 55,184 2.83% 75.40% 0.021314
73,184 Kd 3.51%
Calculation of cost of debt
Outstanding debt 18,000
interest rate 8.00%
Tax rate 30.0%
Kd 5.60%
Calculation of cost of equity
(CAPM)
RF 2.65%
RM 0.99%
Beta -0.10636
Required rate of return 2.83%
Ratio Calculations 2017 2016 2015 2014 2013
Profitability Ratios: 2017 2016 2015 2014 2014

Economics
23
Return on Capital
employed
Operating profit / 13,955 13,441 13,818 15,288 14,789
Capital employed (total
assets - current liabilities) 90,196 96,366 99,705
1
,10,540
1,0
9,226
Answer: % 15.47% 13.95% 13.86% 13.83% 13.54%
Gross Profit Margin
Gross profit / 32,523 32,390 37,403 40,602 41,739
Sales Revenue (note used
operating revenue) 65,058 65,299 76,279 83,062 84,167
Answer: 0.50 0.50 0.49 0.49 0.50
Operating profit margin
Operating profit / 13,955 13,441 13,818 15,288 14,789
Sales Revenue % 65,058 65,299 76,279 83,062 84,167
Answer: 21.45% 20.58% 18.12% 18.41% 17.57%
Asset Efficiency Ratios 2017 2016 2015 2014 2015
Trade payable payment
period ratio
Accounts payable/ 9,632 9,325 8,257 8,461 8,777
Cost of sales 32,535 32,909 38,876 42,460 42,428
Answer: (note the above
needs to be x 365) 108.0584 103.4254 77.5235 72.7335 75.5069
Inventory Turnover (days)
Average Inventory / 4,624 4,716 5,454 6,759 6,909
Cost of Sales
#
day
s 32,535 32,909 38,876 42,460 42,428
Answer: (note the above needs
to be x 365) 51.88 52.31 51.21 58.10 59.44
Receivables Turnover
(days)
Average trade debtors / 4,594 4,373 4,861 6,386 6,508
Sales revenue (note used
operating revenue)
#
day
s 65,058 65,299 76,279 83,062
8
4,167
Answer: (note the above needs
to be x 365) 25.77 24.44 23.26 28.06 28.22
Liquidity Ratios 2017 2016 2015 2014 2015
Current Ratio
Current Assets / 26,494.00 33,782.00 29,646.00 31,617.00
23,990.
00
Current liabilities 30,210.00 30,770.00 29,790.00 33,726.00
30,037.
00
Answer: 0.88 1.10 1.00 0.94 0.80

Economics
24
Acid test ratio
Current Assets - Inventory / 21,870 29,066 24,192 24,858 17,081
Current Liabilities 30,210 30,770 29,790 33,726 30,037
Answer: 0.72 0.94 0.81 0.74 0.57
Debt managment ratio 2017 2016 2015 2014 2015
Debt to equity
Total debt / 18,000 18,916 18,297 19,747 19,085
Total equity 55,184 57,341 62,419 69,214 68,064
Answer: 0.326 0.330 0.293 0.285 0.280
Debt ratio
Total debt / 18,000.00 18,916.00 18,297.00 19,747.00
19,085.
00
Total assets 1,20,406 1,27,136 1,29,495 1,44,266
1,39,26
3
Answer: 0.149 0.149 0.141 0.137 0.137
Market value ratio 2017 2016 2015 2014 2015
Earnings per share
Net income 15,079 10,253 6,777 11,390 11,068
Weighted average shares
outstanding 2,598 2,699 2,712 2,720 2,743
Answer: 5.804 3.799 2.499 4.188 4.035
Dividend coverage ratio
Net income / 15,079.00 10,253.00 6,777.00 11,390.00
11,068.
00
Dividend paid to
shareholders 7,236 7,436 7,287 6,911 6,519
Answer: 2.084 1.379 0.930 1.648 1.698
P&G S&P 500
Date Adj Close Return Adj Close Return
01-01-
2013 63.7546 1362.16
01-02-
2013 65.14371 2.18% 1379.32 1.26%
01-03-
2013 65.89623 1.16% 1406.58 1.98%
01-04-
2013 65.64824
-
0.38% 1440.67 2.42%
01-05- 66.12155 0.72% 1412.16 -

Economics
25
2013 1.98%
01-06-
2013 66.31966 0.30% 1416.18 0.28%
01-07-
2013 69.17093 4.30% 1426.19 0.71%
01-08-
2013 67.59711
-
2.28% 1498.11 5.04%
01-09-
2013 65.60101
-
2.95% 1514.68 1.11%
01-10-
2013 70.07916 6.83% 1569.19 3.60%
01-11-
2013 73.66158 5.11% 1597.57 1.81%
01-12-
2013 71.20386
-
3.34% 1630.74 2.08%
01-01-
2014 67.01437
-
5.88% 1606.28
-
1.50%
01-02-
2014 69.31865 3.44% 1685.73 4.95%
01-03-
2014 71.02825 2.47% 1632.97
-
3.13%
01-04-
2014 72.74667 2.42% 1681.55 2.97%
01-05-
2014 71.76415
-
1.35% 1756.54 4.46%
01-06-
2014 69.80993
-
2.72% 1805.81 2.80%
01-07-
2014 68.68182
-
1.62% 1848.36 2.36%
01-08-
2014 74.41433 8.35% 1782.59
-
3.56%
01-09-
2014 74.97842 0.76% 1859.45 4.31%
01-10-
2014 78.13908 4.22% 1872.34 0.69%
01-11-
2014 81.58907 4.42% 1883.95 0.62%
01-12-
2014 82.18456 0.73% 1923.57 2.10%
01-01-
2015 76.04934
-
7.47% 1960.23 1.91%
01-02-
2015 77.35317 1.71% 1930.67
-
1.51%
01-03-
2015 74.45458
-
3.75% 2003.37 3.77%
01-04-
2015 72.24658
-
2.97% 1972.29
-
1.55%
01-05- 71.80174 - 2018.05 2.32%

Economics
26
2015 0.62%
01-06-
2015 71.66434
-
0.19% 2067.56 2.45%
01-07-
2015 70.25376
-
1.97% 2058.9
-
0.42%
01-08-
2015 65.26052
-
7.11% 1994.99
-
3.10%
01-09-
2015 66.43333 1.80% 2104.5 5.49%
01-10-
2015 70.53344 6.17% 2067.89
-
1.74%
01-11-
2015 69.73238
-
1.14% 2085.51 0.85%
01-12-
2015 73.9905 6.11% 2107.39 1.05%
01-01-
2016 76.11491 2.87% 2063.11
-
2.10%
01-02-
2016 75.46238
-
0.86% 2103.84 1.97%
01-03-
2016 77.36094 2.52% 1972.18
-
6.26%
01-04-
2016 75.30261
-
2.66% 1920.03
-
2.64%
01-05-
2016 76.79077 1.98% 2079.36 8.30%
01-06-
2016 80.23043 4.48% 2080.41 0.05%
01-07-
2016 81.10219 1.09% 2043.94
-
1.75%
01-08-
2016 83.37984 2.81% 1940.24
-
5.07%
01-09-
2016 85.70999 2.79% 1932.23
-
0.41%
01-10-
2016 82.8928
-
3.29% 2059.74 6.60%
01-11-
2016 79.35568
-
4.27% 2065.3 0.27%
01-12-
2016 80.9147 1.96% 2096.95 1.53%
01-01-
2017 84.30218 4.19% 2098.86 0.09%
01-02-
2017 88.3356 4.78% 2173.6 3.56%
01-03-
2017 87.15225
-
1.34% 2170.95
-
0.12%
01-04-
2017 84.7079
-
2.80% 2168.27
-
0.12%
01-05- 86.09898 1.64% 2126.15 -

Economics
27
2017 1.94%
01-06-
2017 85.18022
-
1.07% 2198.81 3.42%
01-07-
2017 88.76727 4.21% 2238.83 1.82%
01-08-
2017 90.89161 2.39% 2278.87 1.79%
01-09-
2017 89.62089
-
1.40% 2363.64 3.72%
01-10-
2017 85.0502
-
5.10% 2362.72
-
0.04%
01-11-
2017 89.30955 5.01% 2384.2 0.91%
01-12-
2017 91.18526 2.10% 2387.98 0.16%