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Balance Sheet Data P&G Unilever Colgate-Palmolive Current Assets $  23,320 $  15,481 $  3,793 Accounts Receivable $    4,686 $    4,204 $  1,400...

Balance Sheet Data P&G Unilever Colgate-Palmolive
Current Assets $  23,320 $  15,481 $  3,793
Accounts Receivable $    4,686 $    4,204 $  1,400
Beginning Total Assets $120,406 $  60,285 $12,676
Ending Total Assets $118,310 $  59,456 $12,161
PPE (Fixed Assets) $  20,600 $  10,347 $  3,881
Beginning Inventory $    4,624 $    3,962 $  1,221
Ending Inventory $    4,738 $    4,301 $  1,250
Current Liabilities $  28,237 $  19,772 $  3,329
Accounts Payable $  10,344 $  14,317 $  1,212
Total Liabilities $  65,247 $  47,164 $ 11,964
Income Statement Data
Sales $ 66,832 $ 50,982 $ 15,544
Prior Year Sales $ 53,715 $ 46,467 $ 15,454
COGS $33,449 $30,703 $  6,282
Prior Year COGS $31,942 $30,547 $  6,099
SGA Expense $18,602 $25,000 $  5,443
Prior Year SGA Expense $18,431 $13,507 $  5,408
Interest Expense $      506 $      591 $      143
Operating Income $14,781 $  9,334 $  3,759
Net Income $  9,750 $  9,389 $  2,558
Equity Data
Beginning Stockholder's Equity $54,178 $13,629 -$      60
Ending Stockholder's Equity $51,326 $11,572 -$    102
Profitability Ratios P&G Unilever Colgate-Palmolive
Gross Profit Margin      39.8%   59.6%
Operating Profit Margin      18.3%   24.2%
Profit Margin      18.4%   16.5%
Return on Assets        15.7%   20.6%
Return on Equity      74.5% -3158%
Liquidity Ratios P&G Unilever Colgate-Palmolive
Current Ratio      0.78   1.14
Quick Ratio      0.57   0.77
Leverage Ratios P&G Unilever Colgate-Palmolive
Debt to Equity      3.74 -147.70   
Times Interest Earned 15.79 26.29
Activity Ratios P&G Unilever Colgate-Palmolive
Inventory Turnover        7.41   5.01
Avg. Days in Inventory   49.24 72.85
Fixed Asset Turnover        4.93   4.01
Days Receivable   30.10 32.87
Days Payable 170.20 70.42
Composite Ratio P&G Unilever Colgate-Palmolive
Cash to Cash Cycle -90.86 35.30

Calculate Profitability ratios, liquidity ratios, Leverage ratios, activity/ efficiency ratios for P&G?

Solutions

Expert Solution

P&G ratios:

1. Gross profit margin= Gross profit/ Sales

GP= Sales-COGS= 66832-33449= 33383

Gross profit margin= 33383/66832= 49.95%

2. Operating profit margin= Operating income/Sales

=14781/66832= 22.11%

3. Profit margin= Net income/Sales

= 9750/66832= 14.58%

4. Return on assets= Net income/ AverageTotal assets

Average total assets= (Beginning total assets + Ending total assets)/2

= (120406+ 118310)/2 = 119358

Return on assets= 9750/119358= 8.17%

5. Return on equity= Net income/Average Shareholder's equity

Average shareholder's equity= (54178+51326)/2 = 52752

Return on equity= 9750/52752= 18.48%

6. Current ratio= Current assets/Current liabilities

= 23320/28237 = 0.82

7. Quick ratio= Quick assets/Current liabilities

Quick assets= Current assets- Ending Inventory= 23320-4738 = 18582

Quick ratio= 18582/28237 = 0.66

8. Debt to Equity= Debt/ Average Equity

Note: From the D/E ratio of other two companies it seems that the total liabilities have been considered as equivalent to the debt, so we will be using the same assumption here.

Average equity= 52752 (from above)

Debt to Equity= 65247/52752= 1.23

9. Times interest earned= Operating income/Interest expense

= 14781/506= 29.21

10. Inventory turnover= Average COGS/Average Inventory

Average COGS= (33449+31942)/2= 32696

Average inventory= (4624+4738)/2 = 4681

Inventory turnover= 32696/4681= 6.98

11. Average days in turnover= 365/inventory turnover

= 365/6.98= 52.29

12. Fixed assets turnover ratio= Sales/ Fixed assets

= 66832/20600= 3.24

13. Days receivable= 365/accounts receivable tunrover ratio

Accounts receivable turnover ratio= sales/ receivable

Accounts receivable turnover ratio= 66832/4686= 14.26

Days receivable= 365/14.26 = 25.60

14. Days payable= 365/Payable turnover ratio

Payable turnover ratio= COGS/Account payables

= 33449/10344= 3.23

Days payable= 365/3.23= 113.00

15. Cash to cash cycle= Inventory days+ Receivable days- Payable days

= 52.29+25.60-113.00 =-35.11

jeff jeffy answered 1 year ago
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