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Investment Analysis

857 words - 4 pages

Jona Gjylameti
Finance 332
Procter & Gamble
Procter and Gamble is the kind of company that is well known not only in the US market but in the international market as well. It is important to mention the fact that they are competing in 5 different segments while back on the year 2012 they decided to discontinue their snack business and to sell their products to the Kellogg Company. While I’d like to point out that in those 5 segments that they are competing, they are not the market leader for all of them. Based on the calculations, Procter and Gamble appears to have done well for the year of 2013, but if we stop and analyze how they did for the last 5 years we see that like any other ...view middle of the document...

Looking at the last 5 years, we can say that the company’s debt to equity ratio shows that the capital structure basically is the same only that for 2013 the ratio is slightly better in terms of being less risky.
P&G’s both ROIC with and without goodwill has been below 13% in all past 5 years (with an exception in 2010). They have improved their growth ratios and gross margin throughout the period of 5 years and technically the rate should be between 8-12% however there are other companies in this industry that are doing far better that P&G in terms of their ROIC. I think they are adding positive value over time but they are not the market leaders in all the segments they are competing in. However their competitive advantage is their brand recognition. Additionally the fact that they have a lot of commercials and their brand name is well recognized, I think that that’s a huge plus. I’m sure that most of us have seen the “Thank You Mom” commercial launched for the Olympic Games and we all in a way or another relate to that commercial.
P&G focuses on five segments: Grooming, Beauty, Health Care, Baby and Family care and Fabric and Home care. They have different products in each of these segments and they are global market leaders of the grooming and beauty segments. Also in the...

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