An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

Procter & Gamble Co., adjustments to financial statements

US$ in millions

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Adjustment to Total Assets
Total assets (as reported)	120,829)	117,208)	119,307)	120,700)	115,095)	118,310)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	—)	1,143)	1,253)
Total assets (adjusted)	120,829)	117,208)	119,307)	120,700)	116,238)	119,563)
Adjustment to Total Debt
Total debt (as reported)	34,607)	31,493)	31,988)	34,720)	30,092)	31,286)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	—)	—)	—)	1,143)	1,253)
Add: Current operating lease liabilities	222)	205)	219)	239)	—)	—)
Add: Noncurrent operating lease liabilities	595)	595)	631)	652)	—)	—)
Total debt (adjusted)	35,424)	32,293)	32,838)	35,611)	31,235)	32,539)

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

^{1, 2} Equal to total present value of future operating lease payments.

Procter & Gamble Co., Financial Data: Reported vs. Adjusted

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Procter & Gamble Co., adjusted financial ratios

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Total Asset Turnover¹
Reported total asset turnover	0.68	0.68	0.64	0.59	0.59	0.56
Adjusted total asset turnover	0.68	0.68	0.64	0.59	0.58	0.56
Debt to Equity²
Reported debt to equity	0.74	0.68	0.69	0.75	0.64	0.60
Adjusted debt to equity	0.76	0.69	0.71	0.77	0.66	0.62
Return on Assets³ (ROA)
Reported ROA	12.13%	12.58%	11.99%	10.79%	3.39%	8.24%
Adjusted ROA	12.13%	12.58%	11.99%	10.79%	3.35%	8.15%

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

¹ See details »

² See details »

³ See details »

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Procter & Gamble Co. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Procter & Gamble Co. adjusted debt to equity ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Procter & Gamble Co. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Procter & Gamble Co., Financial Ratios: Reported vs. Adjusted

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	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Net sales	82,006)	80,187)	76,118)	70,950)	67,684)	66,832)
Total assets	120,829)	117,208)	119,307)	120,700)	115,095)	118,310)
Activity Ratio
Total asset turnover¹	0.68	0.68	0.64	0.59	0.59	0.56
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net sales	82,006)	80,187)	76,118)	70,950)	67,684)	66,832)
Adjusted total assets	120,829)	117,208)	119,307)	120,700)	116,238)	119,563)
Activity Ratio
Adjusted total asset turnover²	0.68	0.68	0.64	0.59	0.58	0.56

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

2023 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 82,006 ÷ 120,829 = 0.68

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 82,006 ÷ 120,829 = 0.68

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Procter & Gamble Co. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Total debt	34,607)	31,493)	31,988)	34,720)	30,092)	31,286)
Shareholders’ equity attributable to Procter & Gamble	46,777)	46,589)	46,378)	46,521)	47,194)	52,293)
Solvency Ratio
Debt to equity¹	0.74	0.68	0.69	0.75	0.64	0.60
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt	35,424)	32,293)	32,838)	35,611)	31,235)	32,539)
Shareholders’ equity attributable to Procter & Gamble	46,777)	46,589)	46,378)	46,521)	47,194)	52,293)
Solvency Ratio
Adjusted debt to equity²	0.76	0.69	0.71	0.77	0.66	0.62

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

2023 Calculations

¹ Debt to equity = Total debt ÷ Shareholders’ equity attributable to Procter & Gamble
= 34,607 ÷ 46,777 = 0.74

² Adjusted debt to equity = Adjusted total debt ÷ Shareholders’ equity attributable to Procter & Gamble
= 35,424 ÷ 46,777 = 0.76

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Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Procter & Gamble Co. adjusted debt-to-equity ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Procter & Gamble (P&G)	14,653)	14,742)	14,306)	13,027)	3,897)	9,750)
Total assets	120,829)	117,208)	119,307)	120,700)	115,095)	118,310)
Profitability Ratio
ROA¹	12.13%	12.58%	11.99%	10.79%	3.39%	8.24%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net earnings attributable to Procter & Gamble (P&G)	14,653)	14,742)	14,306)	13,027)	3,897)	9,750)
Adjusted total assets	120,829)	117,208)	119,307)	120,700)	116,238)	119,563)
Profitability Ratio
Adjusted ROA²	12.13%	12.58%	11.99%	10.79%	3.35%	8.15%

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

2023 Calculations

¹ ROA = 100 × Net earnings attributable to Procter & Gamble (P&G) ÷ Total assets
= 100 × 14,653 ÷ 120,829 = 12.13%

² Adjusted ROA = 100 × Net earnings attributable to Procter & Gamble (P&G) ÷ Adjusted total assets
= 100 × 14,653 ÷ 120,829 = 12.13%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Procter & Gamble Co. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Procter & Gamble Co. (NYSE:PG)

Analysis of Operating Leases

Adjustments to Financial Statements for Operating Leases

Procter & Gamble Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Procter & Gamble Co., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)