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Financial Health and Performance of Procter and Gamble

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Procter and Gamble is an organization which produces diverse products, and its ambition is to reach the consumer’s demand. P&G began in the 1911; with the theme of innovation by producing every time a different product. For every product they go through three stages. The first stage was to make innovative needed products; the second was to proceed with the successful products with suitable quantities; and the third is to have more investments of capital to enlarge the company.

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Leaving less cash for other activities such as research or new investments. Profitability Ratios. Ratios that asses a company’s ability to generate revenue with a good oversight on their expenses during a period of time. Return on Common Equity (ROE) ( Net income Available to common shareholders / Average Common Shareholders ' Equity The percentage of profit which has been generated due to shareholders investments. 13436 ( 66296.5 ( 100% ( 17.11% → This number is very important when comparing their ROE to others. On as scale from one to five, Proctor & Gamble scores a four. SO in comparison to their competitors they are doing well, but it could be even better. Return on Assets (ROA) ( net operating profit after taxes / average assets An indication on how efficient management is using their assets to generate earnings

So it calculates the relativity between assets and profit. 13436 ( 13941.25 ( 100%( 9.64 % → Here too this ratio is used in comparing with other companies but also with your own company. In comparison with other companies, Proctor & Gamble isn’t standing on top, but it is close. Meaning that their return on investments is good. In previous year their ROA was 8.56 ( 12075 ( 141003 ( 100%).

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P&G is an American multinational consumer goods corporation founded in 1837, headquartered in Cincinnati, Ohio. It manufactures and distributes food and beverages, cleaning supplies and personal care products. In 2011, it showed almost $83 billion in sales, making it 5th in the ""World's Most Admired Companies."" P&G has about 130,000 employees globally (P&G Information, 2012). Bob McDonald is the current CEO, and worked for the company for 29 years prior to his promotion. His view is that P&G should touch and improve ""the lives of the world's consumers through branded products of superior quality and value"" (Dyer, D., et.al. 2004). The ""release the hounds"" reference used to promote Gain ""Outdoor Sunshine"" is reflective of the company's past marketing efforts for this product that have equated doing laundry with going to war while remaining ""ladylike"" in the process. According to Harris (2000), ""Throughout the twentieth century, the aesthetic of cleanness has been simultaneously militaristic and ladylike.

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In short, PG maintains stable levels of returns onassets and equity throughout the forecast. PGgenerated a historical average 8.7% return onassets. This 8.7% is slightly compressed to anaverage 8% return on assets through 2019. PG alsogenerated an average 21.1% return on equity overthe past five years

Our conservative modelingapproach is reflected in a narrowing of PG’s averagereturn on equity to 14% throughout the forecastedyears.

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Gain. (2008). Proctor & Gamble. [Online].

Harris, D. (2000). Cute, quaint, hungry, and romantic: The aesthetics of consumerism. New York: Basic Books.

Basdur, M & Gelade, G 2006, 'The Role of Knowledge Management in the Innovation Process', Creativity and Innovation Management, vol 15, no. 1, pp. 45-62.

Beer, M & Eisenstat, R 1996, 'Developing and Organization Capable of Implementing Strategy and Learning', Human Relations, vol 49, no. 5, pp. 597-618.

Business Wire 2012, Proctor and Gamble Received Golden Halo Award, viewed December 2012.

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