Procter & Gamble Co. (NYSE:PG)

Current tax expense

The current tax expense shows a general upward trend from 2020 through 2023, increasing from 3,327 million US dollars in 2020 to a peak of 4,068 million US dollars in 2023. Subsequently, there is a slight decline in 2024 to 4,031 million and a further decrease to 3,953 million in 2025. This pattern suggests a peak in current tax obligations in 2023 followed by a modest reduction in the following two years.

Deferred tax benefit

The deferred tax benefit exhibits considerable variability over the observed periods. Starting from a benefit amount of -596 million in 2020, the absolute value decreases sharply to -258 million in 2021, then fluctuates in the following years with -402 million in 2022 and -453 million in 2023. Thereafter, the benefit diminishes substantially to -244 million in 2024 and shifts to a deferred tax expense of 149 million in 2025. This reversal from a benefit to an expense in 2025 is a notable change, indicating a shift in deferred tax dynamics.

Total tax expense

The total tax expense, which incorporates both current tax expense and deferred tax benefit, increases steadily from 2,731 million in 2020 to 3,615 million in 2023. This upward trajectory continues with 3,787 million in 2024 and reaches 4,102 million in 2025, marking the highest value over the observed period. The steady increase in total tax expense, particularly in the last two years, suggests rising overall tax obligations despite the fluctuating deferred tax component.

The analysis of the annual financial data reveals several observable trends in the components influencing the effective income tax rate over the examined periods.

U.S. Federal Statutory Income Tax Rate

The statutory federal income tax rate remained constant at 21% across all periods, indicating no changes in the foundational federal tax policy during these years.

Country Mix Impacts of Foreign Operations

This component fluctuated mildly, starting from -0.1% in 2020, dropping to -0.5% in 2021, slightly improving to -0.3% in 2022, and then again declining to -0.5% in 2023. In 2024, it improved to a slightly positive 0.1%, only to revert back to -0.4% by 2025. These variations suggest nuanced changes in the geographical distribution of foreign operations and their tax implications.

State Income Taxes, Net of Federal Benefit

A gradual increasing trend is apparent, with values rising from 1.4% in 2020 to a peak of 1.8% in 2024, followed by a slight decrease to 1.7% in 2025. This pattern indicates growing significance of state-level taxation on the effective tax rate.

Excess Tax Benefits from the Exercise of Stock Options

This item consistently exerted a reducing effect on the tax rate. Starting at -1.6% in both 2020 and 2021, it intensified to -2.0% in 2022, then decreased in impact to -1.0% in 2023 before increasing again to -1.5% in 2024 and slightly receding to -1.4% in 2025.

Tax Benefit from Simplification of Legal Entity Structure

This benefit was recorded only in 2020 at -1.4%, with no subsequent entries, suggesting a one-time tax advantage related to organizational restructuring.

Foreign Derived Intangible Income Deduction (FDII)

This deduction consistently lowered the effective tax rate, fluctuating within a narrow band from -1.1% to -0.8% across the periods, showing a relatively stable contribution from this source.

Changes in Uncertain Tax Positions

This component remained close to neutral with minor positive and negative variations, indicating minimal net impact on the effective tax rate throughout the periods analyzed.

Other Items

Other factors exerted a negative influence on the effective tax rate initially (-1.2% in 2020), with this influence gradually diminishing to a slight positive effect by 2025 (0.1%), reflecting changing dynamics of miscellaneous tax adjustments.

Effective Income Tax Rate

The effective income tax rate showed an overall increasing trend, starting at 17.2% in 2020 and rising to 20.3% in 2025. Notably, there was a dip in 2022 to 17.8%, followed by a steady increase thereafter. This trend reflects the combined effects of the various components, including rising state taxes and fluctuating foreign operations impacts.

The financial data reveals several notable trends over the periods ending June 30, 2020 through June 30, 2025. There is a general increase in capitalized research and development expenditures, rising substantially from 358 million USD in 2021 to 1251 million USD projected for 2025, indicating a growing investment in innovation and development activities.

Loss and other carryforwards exhibit fluctuations, peaking at 1030 million USD in 2021, then declining to 857 million USD by 2025. This variability suggests intermittent use or recognition of tax attributes related to past losses.

Pension and other retiree benefits decrease markedly from 1602 million USD in 2020 to 601 million USD in 2025, signaling potential changes in pension plan obligations or assumptions. In contrast, accrued marketing and promotion show a consistent upward trend from 353 million USD to 497 million USD, reflecting increased accruals potentially tied to heightened marketing activities.

Stock-based compensation remains relatively stable, modestly increasing from 386 million USD in 2022 to 445 million USD in 2025, demonstrating a steady level of equity-based employee remuneration.

Unrealized losses on financial and foreign exchange transactions fluctuate significantly, with peaks notably in 2023 and 2025 (282 million USD and 358 million USD respectively), which could indicate volatility in currency or financial markets impacting reported losses. Conversely, unrealized gains on these transactions become less negative over time, though still present as a net unrealized loss position.

Fixed assets values hover around the low 200 million USD mark, with minor variations indicating stable capital asset management. Lease liabilities gradually rise from 190 million USD to 212 million USD, suggesting incremental additions or adjustments to lease obligations.

Inventory and accrued interest and taxes data points are intermittently reported, with inventory peaking at 41 million USD in 2022 before data becomes unavailable, limiting trend analysis.

Other asset categories display mixed patterns; 'Other' assets fluctuate with a high of 878 million USD in 2021 and reduced levels thereafter. Deferred tax assets, gross, move between 4500 million USD and 5208 million USD, demonstrating variability consistent with timing differences and tax planning. Valuation allowances decrease substantially from -486 million USD in 2020 to -293 million USD in 2025, reflecting improving realizability of deferred tax assets.

Goodwill and other intangible assets remain significantly negative, indicating accumulated amortization or impairment, with values steady around -5500 million USD. Similarly, fixed assets show more negative values, hinting at accumulated depreciation or write-downs over the years.

Other retiree benefits consistently increase in a negative direction, peaking at -1319 million USD in 2024, possibly signifying escalating liabilities or unfavorable actuarial experience. Lease right-of-use assets and foreign withholding tax liabilities both show gradual increases in negative amounts, aligning with lease growth and tax provisions respectively.

Deferred tax liabilities increase from approximately -8098 million USD to a peak near -9355 million USD in 2024, before slightly decreasing, indicating growing deferred tax obligations.

The net deferred tax assets (liabilities) remain negative throughout, with the position fluctuating between -3939 million USD and -5197 million USD in 2022, showing some variability in net tax timing differences. The slight improvement in 2025 suggests efforts to optimize tax positions.

Overall, the data portrays a company with increasing investment in research and development and marketing, ongoing management of pension and other retiree benefits liabilities, fluctuating deferred tax positions, and exposure to foreign exchange volatility. Asset values and lease-related balances remain relatively stable with minor growth, while intangible assets reflect sustained amortization or impairments. The financial position signals active management of tax and post-retirement obligations amidst progressive operational investments.

Capitalized Research & Development

Steady and substantial increase from 358 million USD in 2021 to 1251 million USD in 2025.

Loss and Other Carryforwards

Variable, peaking in 2021, then declining, suggesting intermittent utilization.

Pension and Other Retiree Benefits

Consistent decline from 1602 million USD to 601 million USD, indicating reduced pension obligations.

Accrued Marketing and Promotion

Progressively increasing from 353 million USD to 497 million USD.

Stock-Based Compensation

Relatively stable with slight growth, reflecting consistent equity compensation.

Unrealized Loss on Financial and Foreign Exchange Transactions

Marked volatility, notably high in 2023 and 2025, showing currency or market exposure.

Fixed Assets and Lease Liabilities

Stable with minor fluctuations; lease liabilities show modest increases.

Deferred Tax Assets and Liabilities

Gross assets fluctuate with decreasing valuation allowances; deferred tax liabilities increase with slight decline towards 2025; net position remains negative but slightly improving.

Goodwill and Other Intangible Assets

Significant negative values consistent with amortization or impairment.

Other Retiree Benefits

Increasing negative balance, indicating growing liabilities.

Deferred Tax Assets

The deferred tax assets experienced a decline from 2191 million USD in June 2020 to 1612 million USD in June 2022. After this decrease, there was a slight recovery to 1831 million USD in June 2023, followed by a gradual decline again through June 2025, reaching 1637 million USD. Overall, the deferred tax assets displayed a downward trend over the observed period with moderate fluctuations.

Deferred Tax Liabilities

Deferred tax liabilities remained relatively stable but showed some volatility. Beginning at 6199 million USD in June 2020, they slightly decreased to 6153 million USD in June 2021, then rose to a peak of 6809 million USD in June 2022. Subsequently, there was a decline to 6478 million USD in June 2023, a marginal increase to 6516 million USD in June 2024, and finally a more pronounced decrease to 5774 million USD by June 2025. The overall pattern suggests fluctuations with a general downward trend towards the end of the period.

Comparative Analysis

Across the analyzed timeframe, deferred tax liabilities consistently exceeded deferred tax assets by a substantial margin. The net deferred tax position appears to have become less negative in the latter years, primarily due to the reduction in deferred tax liabilities. The observed volatility in both deferred tax assets and liabilities may reflect underlying changes in tax regulations, timing differences in income recognition, or alterations in the company's financial strategies.

The analysis of the adjusted financial data over the reported periods reveals several important trends and insights concerning the company's financial position and performance.

Total Assets

Adjusted total assets show a gradual decline from US$118,509 million on June 30, 2020, to US$115,596 million by June 30, 2022. Following this decline, there is a reversal with assets increasing steadily through June 30, 2025, reaching US$123,594 million. This suggests initial asset reduction followed by a phase of asset accumulation or reinvestment.

Total Liabilities

Adjusted total liabilities follow a consistent downward trend from US$67,623 million in June 2020 to US$63,545 million in June 2022. After this period, liabilities rise again, reaching US$67,172 million by June 2025. The pattern indicates effective liability management initially, with a subsequent moderate increase possibly linked to financing activities aligned with asset growth.

Shareholders’ Equity Attributable to Procter & Gamble

Adjusted shareholders’ equity increases consistently across the periods, rising from US$50,529 million in June 2020 to US$56,149 million by June 2025. This continuous growth reflects retained earnings accumulation and possible capital inflows, strengthening the company’s equity base.

Net Earnings Attributable to Procter & Gamble

Adjusted net earnings display an overall positive trend, increasing from US$12,431 million in June 2020 to US$16,123 million in June 2025. While earnings slightly dip between June 2022 and June 2023, they resume growth thereafter. This overall upward trend in profitability supports the observed equity growth and suggests improved operational efficiency or favorable market conditions in later periods.

In summary, the adjusted data illustrate a company that experienced a period of cautious asset and liability reduction from 2020 to 2022, followed by renewed growth and investment leading up to 2025. Simultaneously, the firm maintained solid earnings growth and steadily increased shareholder equity, indicating sound financial health and value creation for shareholders over the analyzed timeframe.

Net Profit Margin

Both reported and adjusted net profit margins exhibit a generally stable trend with slight fluctuations over the analyzed periods. The reported net profit margin increased from 18.36% in 2020 to a peak of 18.79% in 2021, followed by a gradual decline to 17.7% in 2024 before rebounding to 18.95% in 2025. Adjusted net profit margin shows a similar pattern, rising from 17.52% in 2020 to 18.46% in 2021, then declining to around 17.3-17.4% through 2023 and 2024, with a notable improvement to 19.13% in 2025. This indicates a generally consistent profitability level with an improvement in the most recent period.

Total Asset Turnover

Total asset turnover ratios, both reported and adjusted, demonstrate a progressive increase from 2020 through 2024, followed by a slight moderation in 2025. Reported total asset turnover rose from 0.59 in 2020 to a peak of 0.69 in 2024 before a minor decrease to 0.67 in 2025. Adjusted figures follow the same trajectory, starting at 0.60 in 2020, reaching 0.70 in 2024, and declining slightly to 0.68 in 2025. The upward trend through 2024 suggests improved efficiency in using assets to generate sales, though the slight dip in 2025 may indicate a mild reduction in asset utilization.

Financial Leverage

Reported financial leverage ratios exhibit a decreasing trend overall, starting at 2.59 in 2020 and falling to 2.41 by 2025, with minor fluctuations in the interim years. Adjusted financial leverage similarly decreases from 2.35 in 2020 to 2.20 in 2025, reflecting a consistent reduction in leverage. This gradual decline suggests a strategic move toward lower reliance on debt or liabilities, which may contribute to a more conservative capital structure.

Return on Equity (ROE)

Reported ROE increases from 28% in 2020 to a high of 31.64% in 2022, then declines to 29.59% in 2024, recovering somewhat to 30.71% in 2025. Adjusted ROE follows a similar pattern but at lower absolute values, increasing from 24.6% in 2020 to near 27.9% in 2021, hovering around 27.6-27.7% through 2022-2023, dipping to 26.58% in 2024, and increasing to 28.71% in 2025. The trends suggest solid equity returns with some variability, including a peak in 2022 and a rebound following a slight dip in 2024.

Return on Assets (ROA)

Both reported and adjusted ROA show an upward trajectory over the periods. Reported ROA improves from 10.79% in 2020 to a peak of 12.58% in 2022, slightly declining in 2023 but stabilizing around 12.16%-12.76% through 2024 and 2025. Adjusted ROA trends similarly, rising from 10.49% in 2020 to 12.41% in 2022, experiencing a modest decline in 2023, and culminating at 13.05% in 2025, the highest value recorded. This indicates enhanced asset efficiency, particularly noticeable in the most recent period.

Overall Insights

The data reveals generally positive financial performance trends, characterized by improved asset utilization, slightly reduced financial leverage, and generally stable profitability margins. The recovery in net profit margins and ROE in 2025 after minor dips suggests resilience and potential operational improvements. The decreasing leverage corroborates a risk-averse approach to capital management, while increasing ROA highlights enhanced operational efficiency. The consistency between reported and adjusted metrics strengthens confidence in the underlying trends.

The analysis reveals a general upward trend in both reported and adjusted net earnings attributable to the company over the examined periods, indicating improved profitability. Reported net earnings increased from approximately 13.0 billion US dollars in mid-2020 to nearly 16.0 billion US dollars by mid-2025. Similarly, adjusted net earnings followed a comparable path, rising from around 12.4 billion US dollars to over 16.1 billion US dollars during the same timeframe.

The net profit margins, both reported and adjusted, exhibit relative stability with minor fluctuations. The reported net profit margin started at 18.36% in June 2020, peaked at 18.79% in June 2021, dipped slightly through the subsequent years, reaching its lowest at 17.7% in June 2024, and then increased to 18.95% in June 2025. Adjusted net profit margin trends mirror the reported margins, beginning at 17.52%, rising to 18.46% in June 2021, experiencing a moderate decline to 17.32% in June 2023, and then ascending to a peak of 19.13% by June 2025.

The data indicates that despite some yearly variability, the company's profitability, as reflected by net earnings and profit margins, has shown resilience and an overall positive trajectory. The difference between reported and adjusted figures remains relatively consistent, suggesting that adjustments for deferred income tax and other factors do not drastically alter the financial performance representation.

Reported Net Earnings

Consistently increased over the period with a growth of approximately 22.6% from 2020 to 2025.

Adjusted Net Earnings

Followed a similar upward trend with an increase of about 29.7%, indicating improving core profitability after accounting for adjustments.

Reported Net Profit Margin

Exhibited minor fluctuations but maintained an overall stable level around 18%, ending higher in 2025 than at the start.

Adjusted Net Profit Margin

Paralleled the reported margin trends, reflecting overall margin improvement and peaking at 19.13% in 2025.

The analysis of the financial data over the period from June 30, 2020, to June 30, 2025, reveals several important insights regarding total assets and asset turnover ratios.

Total Assets

Reported total assets show a fluctuating trend, declining from 120,700 million US dollars in 2020 to a low of 117,208 million in 2022, followed by a recovery and steady increase reaching 125,231 million by 2025. Adjusted total assets demonstrate a similar pattern with slightly lower values, decreasing from 118,509 million in 2020 to 115,596 million in 2022, and then rising consistently to 123,594 million by 2025.

Total Asset Turnover Ratios

Both reported and adjusted total asset turnover ratios exhibit an improving trend throughout the period. The reported ratio increases from 0.59 in 2020 to a peak of 0.69 in 2024, followed by a slight decline to 0.67 in 2025. The adjusted ratio follows a similar trajectory, rising from 0.60 in 2020 to 0.70 in 2024 before marginally decreasing to 0.68 in 2025.

Comparative Observations

Adjusted figures are consistently slightly lower for total assets but generally align closely with reported values, indicating limited impact from deferred income tax adjustments on asset valuation. The asset turnover ratios, adjusted and reported, remain closely aligned as well, with adjusted ratios being marginally higher, suggesting that the adjustment has a minor positive effect on the efficiency measure of asset utilization.

Overall Implications

The data indicates a period of asset base contraction followed by growth, accompanied by progressive improvement in asset turnover, reflecting enhanced efficiency in the utilization of assets to generate revenue. The slight decline in turnover ratios in the final year may signal a leveling off or minor softening in operational efficiency. The consistency between reported and adjusted data suggests reliability in financial reporting and minimal distortion from tax-related accounting treatments.

Total Assets

The reported total assets exhibit a general downward trend from 120,700 million USD in mid-2020 to 117,208 million USD in mid-2022, followed by a gradual recovery to 125,231 million USD by mid-2025. A similar pattern is observed in the adjusted total assets, with values declining from 118,509 million USD in 2020 to 115,596 million USD in 2022, then increasing steadily to reach 123,594 million USD in 2025. This suggests a period of contraction in asset base followed by moderate growth.

Shareholders’ Equity Attributable to Procter & Gamble

The reported shareholders' equity demonstrates relative stability from 46,521 million USD in 2020 to 46,777 million USD in 2023, after which a notable increase occurs, rising to 52,012 million USD by 2025. Adjusted shareholders' equity shows a consistent upward trajectory throughout the entire period, increasing from 50,529 million USD in 2020 to 56,149 million USD in 2025. The divergence between reported and adjusted figures indicates adjustments related to income tax impacts have a material influence, generally inflating adjusted equity values compared to reported ones.

Financial Leverage

Reported financial leverage ratios declined slightly over the examined period, moving from 2.59 in 2020 to 2.41 in 2025, with a minor increase in 2023. Adjusted financial leverage ratios follow a similar pattern but consistently remain below the reported ratios, falling from 2.35 in 2020 to 2.20 in 2025. The steady reduction in leverage suggests an overall trend toward lower reliance on debt financing when considering adjusted figures, implying improved capital structure solidity when income tax adjustments are factored in.

Overall Insights

The adjusted data consistently depict a more conservative financial position with slightly lower total assets and financial leverage but higher shareholders’ equity compared to reported figures. Trends indicate an initial contraction phase up to 2022 in both assets and equity, followed by recovery and growth through 2025. The declining leverage ratios point to a decreasing degree of financial risk over time, particularly when adjusted for deferred tax effects. These movements suggest a strengthening financial profile in adjustable terms, potentially enhancing resilience to economic uncertainties.

The reported net earnings attributable to Procter & Gamble demonstrate a consistent upward trend over the analyzed periods. Beginning at 13,027 million US dollars for the period ending June 30, 2020, the value rises steadily to reach 15,974 million US dollars by June 30, 2025. This indicates a solid growth trajectory in reported profitability.

Adjusted net earnings also show an increasing trend, starting from 12,431 million US dollars in June 2020 and progressing to 16,123 million US dollars by June 2025. Although the adjusted figures are generally slightly lower than the reported net earnings, the upward movement is consistent and reinforces the view of progressive income growth.

Examining shareholders’ equity, the reported figures indicate a moderate increase with some stability in earlier years, moving from 46,521 million US dollars in June 2020 to 52,012 million US dollars in June 2025. Adjusted shareholders’ equity shows a similar but more pronounced upward trend, rising from 50,529 million US dollars to 56,149 million US dollars over the same period. This suggests some adjustments positively affect the equity valuation on an adjusted basis.

Regarding profitability measures, the reported Return on Equity (ROE) remains relatively high throughout the periods, fluctuating between 28% and 31.64%. The highest reported ROE occurs in June 2022 at 31.64%, followed by a slight decrease and a small recovery by June 2025 to 30.71%. The adjusted ROE values are consistently lower than the reported ROE but follow a similar pattern, increasing from 24.6% in June 2020 to a peak near 27.92% in June 2021, then slightly declining to 26.58% in June 2024 before rising again to 28.71% in June 2025.

Overall, the company demonstrates a positive performance trend in both reported and adjusted metrics. Net earnings and shareholders’ equity are growing steadily, supporting a robust financial position. Profitability, measured through ROE, remains strong and relatively stable, with adjusted figures consistently reflecting a conservative yet similar trajectory compared to reported values. The data suggests effective management of reported and deferred income tax implications within the financial results over the periods analyzed.

The data reveals consistent growth in both reported and adjusted net earnings attributed to the company over the six-year period. Reported net earnings increase steadily from 13,027 million US dollars in 2020 to 15,974 million US dollars in 2025. Similarly, adjusted net earnings show a parallel upward trend, rising from 12,431 million US dollars in 2020 to 16,123 million US dollars in 2025. Notably, the adjusted net earnings closely track the reported figures, though they are consistently slightly lower until 2024, when adjusted earnings surpass the reported figures.

Total assets exhibit a marginal upward trend as well, though the growth is less pronounced compared to earnings. Reported total assets decline slightly from 120,700 million US dollars in 2020 to 117,208 million in 2022, followed by a gradual increase ending at 125,231 million US dollars in 2025. Adjusted total assets follow a similar pattern but present slightly lower values throughout the periods, moving from 118,509 million US dollars in 2020 to 123,594 million in 2025.

Return on assets (ROA) metrics, both reported and adjusted, indicate generally stable profitability with some variation. Reported ROA improves from 10.79% in 2020 to a peak of 12.58% in 2022, then slightly declines before increasing again to 12.76% by 2025. Adjusted ROA increases from 10.49% in 2020 to 12.00% in 2021, then experiences a minor dip in 2023 to 11.93% before advancing to 13.05% in 2025, reflecting enhanced asset utilization after adjustments.

Net Earnings Trends

Both reported and adjusted net earnings show consistent growth, with adjusted figures eventually exceeding reported figures in later years.

Total Assets Trends

Reported and adjusted total assets decrease slightly in the early years, then increase gradually, with adjusted asset values slightly trailing reported ones throughout.

Return on Assets (ROA) Trends

Reported ROA smoothly trends upward with minor fluctuations, while adjusted ROA, although very similar in pattern, reaches a higher peak by 2025, indicating improved after-tax profitability relative to assets.

Overall Insights

The financial data portrays a company with steady earnings growth and improving profitability on asset base, with adjustments for income taxes providing a slightly more favorable view of asset efficiency and net income performance in recent years.