Procter & Gamble Financial Ratios
The financial statements of proctor & Gamble can be found in the annual report. But what these numbers really mean can be found by the use of ratios. In order to give you a more in depth analysis of Proctor & Gamble’s financial position we used several ratios.
Activity ratios. These ratios measure whether a company is able to convert account within their balance sheet into cash. Showing us how fast a company can generate into cash and thus sales and ultimately more revenue. We used four ratios.
Accounts Receivable Turnover (AR)( Net sales ( Average Accounts Receivable
A ratio that how quickly customers are paying your business back..
79029 ( 6298.5 ( 12.55 → A high ratio suggest that the company has a good oversight on their accounts receivable. Comparing their ratio to other companies in this industry it shows us that they are doing better than others.
Day’s Receivables Outstanding ( 365 days ( AR
A measurement that calculated how many days that a company takes to collect revenue after a sale has been made
365 ( 12.55 ( 29.09 → An average which Proctor & Gamble has been keeping for years.
Inventory Turnover ( Cost of Goods Sold ( Average Inventory
This ratio shows us how quick inventory is replaced after it has been sold.
38898 ( 7648 ( 5.09 →Once again comparing to similar companies in their industry, it shows us that their inventory turnover is of average. Meaning that their selling at this moment is not what they want it to be, so inventories are in excess. But it could also mean that Proctor & Gamble bought ineffectively.
Day’s Inventory Held ( 365 Days ( Inventory Turnover
The number shows us how many days inventory is held before being sold.
365 ( 5.09 ( 71.71 → obviously this ratio is also moderate, meaning that Proctor & Gamble better sell more, or their inventories will stack up. Because in worst case, prices are lowering, inventories value lowers too.
Liquidity Ratios.
These ratios show a company’s ability to pay off
Activity ratios. These ratios measure whether a company is able to convert account within their balance sheet into cash. Showing us how fast a company can generate into cash and thus sales and ultimately more revenue. We used four ratios.
Accounts Receivable Turnover (AR)( Net sales ( Average Accounts Receivable
A ratio that how quickly customers are paying your business back..
79029 ( 6298.5 ( 12.55 → A high ratio suggest that the company has a good oversight on their accounts receivable. Comparing their ratio to other companies in this industry it shows us that they are doing better than others.
Day’s Receivables Outstanding ( 365 days ( AR
A measurement that calculated how many days that a company takes to collect revenue after a sale has been made
365 ( 12.55 ( 29.09 → An average which Proctor & Gamble has been keeping for years.
Inventory Turnover ( Cost of Goods Sold ( Average Inventory
This ratio shows us how quick inventory is replaced after it has been sold.
38898 ( 7648 ( 5.09 →Once again comparing to similar companies in their industry, it shows us that their inventory turnover is of average. Meaning that their selling at this moment is not what they want it to be, so inventories are in excess. But it could also mean that Proctor & Gamble bought ineffectively.
Day’s Inventory Held ( 365 Days ( Inventory Turnover
The number shows us how many days inventory is held before being sold.
365 ( 5.09 ( 71.71 → obviously this ratio is also moderate, meaning that Proctor & Gamble better sell more, or their inventories will stack up. Because in worst case, prices are lowering, inventories value lowers too.
Liquidity Ratios.
These ratios show a company’s ability to pay off