Procter & Gamble Company Analysis Report I am looking for assistance to complete an assignment attached are the requirements and need it by Tuesday. Assign

Procter & Gamble Company Analysis Report I am looking for assistance to complete an assignment attached are the requirements and need it by Tuesday. Assignment 2
The purpose of this part of the project is to conduct an analysis of your company’s ROE. Please begin
your analysis with a description of your company and its competitive environment (return to chapter 1
and Assignment 1 for this information). At the end of your analysis, please comment upon your
company’s future prospects for growth, and the risk and return of its common equity.
Your analysis will contain:
(1) A description of the company and its competitive environment
(2) A set of financial statements showing assets divided between operating and non-operating
assets, and a set of income statements showing the computation of NOPAT for each year.
(3) Compute five years of financial ratios showing a DuPont analysis for ROA and ROE first using
total assets and NI as the basis for your analysis and Net Operating Assets and NOPAT in your
analysis. Contrast your results from each analysis. You can obtain your financial statements from
Mergentonline or WRDS as discussed in our first ZOOM session. No other source of data will be
acceptable for this assignment.
(4) Conduct a credit analysis for your company using the ratios in Module 4 and the additional
ratios provided on the lecture slides for Module 4. Please also compute your company’s Z score.
(5) Please submit a written report summarizing your results and presenting your data on tables.
Each student is required to make a 10-minute presentation of his/her analysis using Kaltura. The
presentation must be uploaded so that it can be viewed and commented on by other students in the
course.
THE PROCTER & GAMBLE COMPANY
Analysis of 10k Report
The Procter & Gamble Company
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THE PROCTER & GAMBLE COMPANY
The name of the company is Procter & Gamble. The abbreviation of its name is P&G. It was
founded on October 31, 1837, at Cincinnati, Ohio, U.S. Names of its founders was William Procter
and James Gamble. The name of the company was derived from the names of the founders as
Procter and Gamble were the last names of the founders. It is an American multinational company
which deals in consumer goods. The average number of outstanding shares for the year 2019 is
2,540 million shares. The name of the owner of Procter & Gamble is David S. Taylor. The number
of shareholders is 2,958 institutions holding shares.
The industry in which it is operating in the consumer goods industry. Procter and Gamble are one
of the largest markets in the world. It is one of the fastest moving companies throughout the world.
The company focus on producing branded consumer goods with high quality around the world.
The company products are sold to 180 different countries around the globe. Afterward, industrial
goods are sold through e-commerce, grocery stores, mass merchandisers, drug stores, department
stores, wholesalers, baby stores, high- frequency stores, pharmacies, beauty stores, distributers,
membership club stores, etc. the company sells goods directly to the consumers. Almost 70
countries are on the ground operation. The company market environment is in competition with
global products, local, and regional products. The managers take notice of the products during
their market sale. They keep their eyes on the other brand’s products, private-label brands, and
retailers who are competing with one other for taking hold of the market. Managers who take hold
of such actions are based on the basis of their price tagging. They try to put prices on the sequence
of different tiers. Such as premium tier, super-premium tier, mid-tier and value tier products. Prices
vary from product to product on the basis of their quality. Due to such efforts, the industry of our
company is positioned in a good structure and hold a majority of the shares in the market.
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The SIC Code of Procter & Gamble is 3999 in which it is operated. It is its primary industry code
which stands for Manufacturing Industries, Not Elsewhere Classified. The end of the fiscal year
of Proctor & Gamble is June 30th, 2019. The main competitors of Procter & Gamble under the SIC
Code 3999 – Manufacturing Industries, Not Elsewhere Classified are Allegheny Technologies
Inc., Medtronic, PLC, Tennant Co, Haeco Americas, Milliken And Company Customer Center,
Mylan Inc, Olympus America Inc., International Game Technology, Volvo Group North America
Llc. and MSA Safety Incorporated. Their NAICS code is also 339999.
Currently, the company is at the growth stage and it is experiencing rapid sales growth. The Proctor
& Gamble Company is operating its business for many years and providing high-quality products
to customers. Management of the company is focusing on providing branded products to customers
at affordable prices. Proctor & Gamble is providing high quality branded products to customers.
Proctor & Gamble has passed its breakeven point at the start of the business and now shareholders
are earning a good return on their investment. This company has excellent production facilities
and an efficient distribution system for providing the products to its customers. Practically the
majority of the crude and bundling materials utilized by the Company are bought from others,
some of whom are single-source providers. They produce certain crude materials, principally
synthetic compounds, for further use in the assembling procedure. Moreover, fuel, flammable gas,
and subordinate items are significant wares expended in their assembling procedure and the
transportation of info materials and completed items to clients. The costs they pay for materials
and different wares are dependent upon change. At the point when costs for these things change,
they could conceivably pass the change to their clients.
Procter & Gamble produces hair care products which include conditioner, styling aids, shampoo,
treatments. The company produces Skin and Personal Care Products which include Antiperspirant
The Procter & Gamble Company
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and Deodorant, Skin Care and Personal Cleansing. It produces shave care products such as female
blades & razors, male blades & razors, pre- and post-shave products and other shave care items. It
also produces Health Care Oral Care products which include toothbrushes, toothpaste, and other
oral care products. Its health care products include Pain Relief, Gastrointestinal, Respiratory,
Rapid Diagnostics, Vitamins/Supplements/Minerals, and other personal health care products. It
produces Fabric Care products which include Fabric Enhancers, Laundry Detergents, and Laundry
Additives. It’s Home Care products include Air Care, P&G Professional, Dish Care, and Surface
Care Products. It produces Baby Care products which include Baby Wipes, Taped Diapers, and
Pants. It also produces Feminine Care products which include Adult Incontinence and Feminine
Care products. It produces products related to family care including Paper Towels, Tissues and
Toilet Paper.
The target market of Procter & Gamble is comprised of mass merchandisers, grocery stores, drug
stores, distributors, baby stores, high-frequency stores, e-commerce, membership club stores,
department stores, wholesalers, pharmacies and specialty beauty stores. Products are directly sold
to consumers also. In the year 2019, 15% of the total products sold were made to Walmart Inc. and
the affiliated businesses. All other customers buy less than 10% of the total products sold. 36% of
total products sold are bought by the top ten customers of Procter and Gamble in the year 2019.
The company is not engaged in any government contract or orders related to the material backlog.
They follow the practices practically implemented in the industry of its business segments. The
products produced by Procter & Gamble are very unique.
The Procter & Gamble Company
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Procter & Gamble Company “Connect and Develop” the company innovation. As from their
background knowledge they come to know that innovation is the main cause of economic growth
moreover, it helps in the growth and income of the company. We live in the age of the internet
where we have to stay up to date according to the demand of customers. Technology is moving
faster which is why one day or another they see new advancing products in their surroundings.
Technology has played a role in bringing the world closer and almost removed the concept of time
and space which we used to follow in the old times. Procter & Gamble is a kind of company which
does not lack such criteria. It maintains to fight back the new products coming online. The
company is a world market and manufacture based on complex networks. Procter & Gamble has
always maintained its stronghold in the field of market and gain the trust of their customers in
every way by allowing new techniques and strategies. Those new techniques and strategies help
the company in its outcome and retaining to maintain the position in new era market conditions.
Procter & Gamble is an innovative company that is a pioneer in the field in which it is operating.
Their competitive advantage is its innovative nature. The lifeblood of Procter & Gamble is
innovation. The market in which all the business segments of Procter & Gamble are operating is
highly competitive. The competitors of Procter & Gamble are of a global level. Every company
follows a model on which their business schedule and motives are followed. The Procter & Gamble
company business completely based on the growth and appreciation of the brand and products they
offer to their customers. The products that they sell and offer in the market are highly competitive.
On the other hand, the products of the Procter & Gamble company are also very highly
competitive. Their products compete with all the other companies who sell similar products. Those
products can be from smaller or larger companies. Those small and larger companies include world
best companies as well as local best companies. Apart from local and international brand our
The Procter & Gamble Company
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company is in a competition against retailers private-label brands as well. Procter & Gamble is
well known in the market where they sell their products but they face new competitors every day.
Major inputs for the company are different kinds of raw materials. Inputs include both raw and
packaging materials and management purchased all these inputs from reliable suppliers. Inputs
raw material includes certain chemicals that are used only for the production of products. Fuel and
natural gas are important inputs for the production of products. Both raw material cost and labor
cost are important elements in the production of products. The cost of material and labor are
sensitive to the revenues of the company. An increase in material cost and labor cost result in a
decrease in revenues of the company. There is a need to control the cost of these two important
factors are maintaining the revenues and profitability of the company. Management should
contract with more reliable suppliers for procuring high-quality material to improve the production
process of products. Management should decrease the sensitivity of production costs for improving
the overall revenue of the company.
Management of Proctor & Gamble has licenses under patents and registered trademarks. All
patents and trademarks of Proctor & Gamble are in connection with all operational and business
activities of the company. These patents are covering major formulation of products of the
company and trades marks are covering the branding of products. Management also focuses to
register new brands for securing their rights of usage and to avoid any infringement of rights. The
market of Proctor & Gamble is very competitive and many companies are providing similar
products. It is essential for securing the products and to avoid any infringement of rights,
management should get registration of all formulas. Registration of patents is protecting the secret
production formulas of the company.
The Procter & Gamble Company
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Strengths of Procter & Gamble are that the image of its brand is very strong. People trust this
brand. It is very popular in the whole world and its sales are very high. It continually improves its
brand and products. It is limited to almost 10 categories of products. It is comprised of 65 brands.
It is managing the portfolio of its products very effectively and strategically. Its focus remains on
the products with the highest profits. Its brand is recognized on a global level. It is targeting almost
200 countries. It is using a lot of channels so that its products can reach to the consumers. It is
using mass merchandisers, drug stores, specialty beauty stores, pharmacies, membership club
stores, e-commerce grocery stores, department stores, baby stores, distributors and high-frequency
stores, etc. The locations of its 85 manufacturing sites are in different countries of the world
comprising of more than 37 nations. So, it is strongly present in the whole world. Its marketing
strategies are also very successful. It has its website and it uses other websites also to sell its
products online. Its advertising expense in 2018 was $7.1 billion.
The main weakness of Procter & Gamble is that it is depending heavily upon Walmart and the US.
Its growth is stagnant for a few several years. It is facing issues related to management. It is not
enjoying diversification as its products belong to the consumer industry. Innovation in marketing
is a very big opportunity for Procter & Gamble. It is engaged in such products that are highly
innovative and can be continually innovated. It can enjoy acquisitions and mergers. The emerging
markets for its products are based on rural and all other areas of the world. Pressure from
competitors is a continuous threat to the company. There are many pressures from regulatory
authorities also.
Management believes that having enough sales and projects in international trade can have several
risks such as currency exchange, controlling the prices, fluctuations of the foreign currency. The
business of our company is all around the globe. It consists of almost 70 countries where the
The Procter & Gamble Company
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operations are still in progress whereas, in 180 countries the products are already sold. The
company resources, experience liabilities, earn income and pay the number of expenses in different
currencies of the world apart from the U.S. dollar more then 50 percent of the income is coming
to the company from outside the United States of America. If we see constant fluctuations in the
ups and downs of foreign currency then it will reduce the value of the U.S. dollar, the profit they
receive from foreign markets. Workers, conferences are in a roundabout way influenced by the
political insecurity of the nation or financial precariousness because of which the organization will
confront such a large number of negative results. Climatic difficulties, Insurance of the
representatives or executives are the dangers that the organization accepts the administration most
likely will confront soon.
The Company faces a lot of issues regarding the exchange rate and challenges faced by currency,
for this purpose the company has already put forward contracts and currency swaps which help
them control those risks at the time of need. The Company offers insurance to the Officers and
Directors where it is necessary to give them insurance based on law or based on a contract which
they signed mutually. As the company is multinational and worldwide which is why the main risk,
they face is in the sales of the international market such as currency exchange, fluctuations in the
currency. For this purpose, the company does its business in the country’s local currency. They
gain more profit in the time of needs where they don’t have to pay extra taxes to the government
in the form of dollars but they pay in the local currency of the country. This risk lets the company
with low raw materials which results in less production of the good in a year. For this purpose, the
company has planned the desired amount of consuming raw materials and saving the rest of up to
five years which helps them confront the challenges of climatic changes in the time of need.
The Procter & Gamble Company
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As mentioned above that company faces the foremost risk of fluctuations due to the changes in
healthcare service, pensions of people, trade system, public transportation, prices of raw materials
and salary of labor. As a result, the company must retain the process of pricing according to the
situation the country is facing. Company management tries to control all the price fluctuations by
taking quick and forceful decisions on time, design projects that are based on cost-saving, while
keeping the beneficial outcome of the company at the back of their head, which helps in improving
the shares in the present market. Last but not least they take quick action on the changes of pricing
which helps them from the sudden big loss to the country due to the instability of the country.
Management offers consumer products which are why the company completely relies on the
demand for constant global changes. The company challenges the risk by bringing constant
improvements to their old products and changes according to the location and culture. They try to
keep the likings and disliking’s of their customers on the peak of their concern while designing
new products.
Stock-based: They deal with two main stock-based compensation programs which result in giving
awards and bonuses to the employees, directors, and managers of the company. First, the restricted
stock unit (RSU) and the second one is the performance stock unit (PSU). In long term programs,
the company asks the known managers to receive different options or RSUs. All of the
compensation last for three years and last until ten years. All the options on the bonuses are priced
according to the rate of the market price. At the finishing margin line of the three-year performance
time, the employee is paid with the award in shares after giving a perfect outcome to the company.
Management of the company saw a very fair distribution of the amount in which they were
awarded on the date of the grant. It focused on the working period of the employee. In the year
1934 (Exchange act) was passed in which president and chief executive of the company, David,
The Procter & Gamble Company
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S. Taylor in coordination with a financial officer of the company, Jon R. Moeller they make a new
announcement to the evaluation section of the company and controls the process of the securities
interchange.
The following member of the Audit Committee is independent in her choices regarding the
company. The board of directors has clarified that Ms. Patricia A. Woertz (chair) is hired as an
Audit Committee financial expert by the SEC rules. The company has filed a law to rule under
14A: this section allowed all the Directors of the company to have an Election; Corporate
Governance must be divided into different sections; different Ethics must be given a code to follow
in near future; other minor or major matters of the company must be subdivided. It can help the
entitled director nomination for the forthcoming year 2020 Proxy Statement.
ESG is an abbreviation for Environment, social responsibility, and corporate governance. It is a
term that is used next to words like sustainable investing, screening, investing related to missions,
and investing which are socially responsible. It is an umbrella term that is used for different other
sections as well such as MSCI ESG. This research field has distinguished between three major
investors’ objectives or incentives while considering ESG strategy. The strategy involves
Integration, Impact, and Values. As a result, to achieve all these objectives, the company managers
may need to look at different approaches, for instance, exclusionary or negative screening, ESG
integration, thematic investing and many more to go. While apply…
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