Procter and Gamble Financial Review
By: Janna • Research Paper • 6,557 Words • December 21, 2009 • 1,567 Views
Essay title: Procter and Gamble Financial Review
TABLE OF CONTENTS
A. Industry and Sector Overview 2
1. External Analysis 3
a. Technology 3
b. Demographic 3
c. International Exposure 4
2. Economic Indicators 4
a. GDP Growth 4
b. Household Income 4
c. Foreign Exchange Risk 4
3. Competition within Sector 4
B. Procter and Gamble: Company Analysis 6
1. Activities and Products 6
2. Strategic Position and Competition 7
3. Financial Analysis 8
a. Review of Business Segments 8
пЃ¶ Health Care 8
пЃ¶ Fabric and Home Care 8
пЃ¶ Baby, Feminine and Family Care 8
пЃ¶ Beauty Care 8
пЃ¶ Food and Beverage 9
b. Operating Results of Procter and Gamble 9
пЃ¶ Volume and Net Sales 9
пЃ¶ Net Earnings 9
пЃ¶ Operating Costs 9
c. Financial Performance 10
пЃ¶ Profitability Analysis 10
пЃ¶ Investment Utilization 11
пЃ¶ Solvency and Short term Liquidity 13
пЃ¶ Return on Equity: The Dupont Analysis 14
пЃ¶ Z - Score for Bankruptcy 15
пЃ¶ Growth Analysis 15
d. Comparative Financial Analysis 16
пЃ¶ Industry Specific Analysis 17
пЃ¶ Profitability 17
пЃ¶ Asset Utilization 18
пЃ¶ Liquidity 18
пЃ¶ Solvency 19
e. Risk Analysis 20
пЃ¶ Business Risk 20
пЃ¶ Sales Variability 21
пЃ¶ Operating Leverage 21
f. Valuation of Procter and Gamble 21
пЃ¶ Dividend Discount Model 22
пЃ¶ Economic Value Added 22
пЃ¶ Earnings Multiplier Model 23
пЃ¶ Technical Analysis 23
g. Investment Appraisal 25
h. Working Notes 26
Working Note 1 26
Working Note 2 26
Working Note 3 26
Working Note 4 26
Working Note 5 27
Working Note 6 27
Working Note 7 27
Working Note 8 28
Working Note 9 29
APPENDIX 30
References 34
The Procter and Gamble was incorporated as a family owned partnership business by William Procter and James Gamble in 1837 with a paid up capital of USD 7,192. This was the period when American economy was in financial panic. There was a fear of civil war and a widespread concern that the United States was bankrupt. However, despite of this era of financial distress the forward looking and aggressive policies of the owners helped company to achieve the sales of one million just in twenty second year of its existence. This forward looking and aggressive approach of company since its inception has made it a leader in consumer products.
Today Procter and Gamble is a public limited company and is listed on New York Stock Exchange. It manufactures and markets more than 250 products to more than five billion consumers in 130 countries throughout the world. The company has diversified its operations from family care products to food and beverages. It emphasize on continuous development of its product line with intensive capitalization for research and development. The company’s human resources