Procter & Gamble Co. (PG) | Profitability Analysis

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Profitability ratios measure the company's ability to generate profitable sales from its resources (assets).

Ratios (Summary)

Procter & Gamble Co., profitability ratios

	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009	Jun 30, 2008	Jun 30, 2007	Jun 30, 2006
Return on Sales
Gross profit margin	50.62%	51.96%	50.78%	51.27%	52.03%	51.45%
Operating profit margin	19.16%	20.30%	20.40%	20.46%	20.20%	19.42%
Net profit margin	14.29%	16.13%	17.00%	14.46%	13.52%	12.73%
Return on Investment
Return on equity (ROE)	17.44%	20.84%	21.29%	17.38%	15.49%	13.80%
Return on assets (ROA)	8.53%	9.94%	9.96%	8.39%	7.49%	6.40%

Source: Based on data from Procter & Gamble Co. Annual Reports

Ratio	Description	The company
Gross profit margin	Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures.	Procter & Gamble Co.'s gross profit margin improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011.
Operating profit margin	A profitability ratio calculated as operating income divided by revenue.	Procter & Gamble Co.'s operating profit margin deteriorated from 2009 to 2010 and from 2010 to 2011.
Net profit margin	An indicator of profitability, calculated as net income divided by revenue.	Procter & Gamble Co.'s net profit margin deteriorated from 2009 to 2010 and from 2010 to 2011.
ROE	A profitability ratio calculated as net income divided by shareholders' equity.	Procter & Gamble Co.'s ROE deteriorated from 2009 to 2010 and from 2010 to 2011.
ROA	A profitability ratio calculated as net income divided by total assets.	Procter & Gamble Co.'s ROA deteriorated from 2009 to 2010 and from 2010 to 2011.

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	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009	Jun 30, 2008	Jun 30, 2007	Jun 30, 2006
Selected Financial Data (USD $ in millions)
Gross profit	41,791	41,019	40,131	42,808	39,790	35,097
Net sales	82,559	78,938	79,029	83,503	76,476	68,222

Gross profit margin¹	50.62%	51.96%	50.78%	51.27%	52.03%	51.45%

Source: Based on data from Procter & Gamble Co. Annual Reports

2011 Calculations

¹ Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × 41,791 ÷ 82,559 = 50.62%

Ratio	Description	The company
Gross profit margin	Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures.	Procter & Gamble Co.'s gross profit margin improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011.

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	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009	Jun 30, 2008	Jun 30, 2007	Jun 30, 2006
Selected Financial Data (USD $ in millions)
Operating income (loss)	15,818	16,021	16,123	17,083	15,450	13,249
Net sales	82,559	78,938	79,029	83,503	76,476	68,222
Operating Profit Margin, Comparison to Industry
Procter & Gamble Co.¹	19.16%	20.30%	20.40%	20.46%	20.20%	19.42%
Industry, Consumer Goods	9.74%	8.74%	7.25%	11.62%	12.01%	–%

Source: Based on data from Procter & Gamble Co. Annual Reports

2011 Calculations

¹ Operating profit margin = 100 × Operating income (loss) ÷ Net sales
= 100 × 15,818 ÷ 82,559 = 19.16%

Ratio	Description	The company
Operating profit margin	A profitability ratio calculated as operating income divided by revenue.	Procter & Gamble Co.'s operating profit margin deteriorated from 2009 to 2010 and from 2010 to 2011.

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	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009	Jun 30, 2008	Jun 30, 2007	Jun 30, 2006
Selected Financial Data (USD $ in millions)
Net earnings	11,797	12,736	13,436	12,075	10,340	8,684
Net sales	82,559	78,938	79,029	83,503	76,476	68,222
Net Profit Margin, Comparison to Industry
Procter & Gamble Co.¹	14.29%	16.13%	17.00%	14.46%	13.52%	12.73%
Industry, Consumer Goods	6.39%	6.72%	4.98%	8.39%	8.53%	–%

Source: Based on data from Procter & Gamble Co. Annual Reports

2011 Calculations

¹ Net profit margin = 100 × Net earnings ÷ Net sales
= 100 × 11,797 ÷ 82,559 = 14.29%

Ratio	Description	The company
Net profit margin	An indicator of profitability, calculated as net income divided by revenue.	Procter & Gamble Co.'s net profit margin deteriorated from 2009 to 2010 and from 2010 to 2011.

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	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009	Jun 30, 2008	Jun 30, 2007	Jun 30, 2006
Selected Financial Data (USD $ in millions)
Net earnings	11,797	12,736	13,436	12,075	10,340	8,684
Stockholders' equity attributable to parent	67,640	61,115	63,099	69,494	66,760	62,908
ROE, Comparison to Industry
Procter & Gamble Co.¹	17.44%	20.84%	21.29%	17.38%	15.49%	13.80%
Industry, Consumer Goods	14.45%	14.16%	11.32%	19.97%	18.33%	–%

Source: Based on data from Procter & Gamble Co. Annual Reports

2011 Calculations

¹ ROE = 100 × Net earnings ÷ Stockholders' equity attributable to parent
= 100 × 11,797 ÷ 67,640 = 17.44%

Ratio	Description	The company
ROE	A profitability ratio calculated as net income divided by shareholders' equity.	Procter & Gamble Co.'s ROE deteriorated from 2009 to 2010 and from 2010 to 2011.

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	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009	Jun 30, 2008	Jun 30, 2007	Jun 30, 2006
Selected Financial Data (USD $ in millions)
Net earnings	11,797	12,736	13,436	12,075	10,340	8,684
Total assets	138,354	128,172	134,833	143,992	138,014	135,695
ROA, Comparison to Industry
Procter & Gamble Co.¹	8.53%	9.94%	9.96%	8.39%	7.49%	6.40%
Industry, Consumer Goods	4.80%	4.81%	4.00%	7.31%	7.22%	–%

Source: Based on data from Procter & Gamble Co. Annual Reports

2011 Calculations

¹ ROA = 100 × Net earnings ÷ Total assets
= 100 × 11,797 ÷ 138,354 = 8.53%

Ratio	Description	The company
ROA	A profitability ratio calculated as net income divided by total assets.	Procter & Gamble Co.'s ROA deteriorated from 2009 to 2010 and from 2010 to 2011.

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