Stock Analysis on Net

Procter & Gamble Co. (NYSE:PG)

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Analysis of Income Taxes

Microsoft Excel

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Income Tax Expense (Benefit)

Procter & Gamble Co., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
U.S. federal
International
U.S. state and local
Current tax expense
U.S. federal
International and other
Deferred tax expense (benefit)
Tax expense

Based on: 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), 10-K (reporting date: 2017-06-30).

Item Description The company
Current tax expense Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Procter & Gamble Co. current tax expense increased from 2020 to 2021 and from 2021 to 2022.
Deferred tax expense (benefit) Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Procter & Gamble Co. deferred tax expense (benefit) increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.
Tax expense Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Procter & Gamble Co. tax expense increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Effective Income Tax Rate (EITR)

Procter & Gamble Co., effective income tax rate (EITR) reconciliation

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
U.S. federal statutory income tax rate
Country mix impacts of foreign operations
State income taxes, net of federal benefit
Excess tax benefits from the exercise of stock options
Tax benefit from simplification of legal entity structure
Foreign derived intangible income deduction (FDII)
Changes in uncertain tax positions
Goodwill impairment
Other
Effective income tax rate, before net transitional impact of U.S. Tax Act
Net transitional impact of U.S. Tax Act
Effective income tax rate

Based on: 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), 10-K (reporting date: 2017-06-30).

Item Description The company
Effective income tax rate, before net transitional impact of U.S. Tax Act Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Procter & Gamble Co. effective income tax rate, before net transitional impact of U.S. Tax Act increased from 2020 to 2021 but then slightly decreased from 2021 to 2022 not reaching 2020 level.

Components of Deferred Tax Assets and Liabilities

Procter & Gamble Co., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Loss and other carryforwards
Pension and other retiree benefits
Capitalized research & development
Accrued marketing and promotion
Stock-based compensation
Fixed assets
Lease liabilities
Unrealized loss on financial and foreign exchange transactions
Advance payments
Inventory
Accrued interest and taxes
Other
Deferred tax assets, gross
Valuation allowances
Deferred tax assets, net
Goodwill and intangible assets
Fixed assets
Other retiree benefits
Unrealized gain on financial and foreign exchange transactions
Lease right-of-use assets
Foreign withholding tax on earnings to be repatriated
Other
Deferred tax liabilities
Deferred tax assets (liabilities), net

Based on: 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), 10-K (reporting date: 2017-06-30).

Item Description The company
Deferred tax assets, gross Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Procter & Gamble Co. deferred tax assets, gross increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.
Deferred tax assets, net Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Procter & Gamble Co. deferred tax assets, net increased from 2020 to 2021 but then slightly decreased from 2021 to 2022 not reaching 2020 level.
Deferred tax assets (liabilities), net Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Procter & Gamble Co. deferred tax assets (liabilities), net increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Deferred Tax Assets and Liabilities, Classification

Procter & Gamble Co., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Deferred tax assets (included in Other noncurrent assets)
Deferred tax liabilities

Based on: 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), 10-K (reporting date: 2017-06-30).

Item Description The company
Deferred tax assets (included in Other noncurrent assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Procter & Gamble Co. deferred tax assets (included in Other noncurrent assets) increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Procter & Gamble Co. deferred tax liabilities decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

Adjustments to Financial Statements: Removal of Deferred Taxes

Procter & Gamble Co., adjustments to financial statements

US$ in millions

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Adjustment to Total Assets
Total assets (as reported)
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Shareholders’ Equity Attributable To Procter & Gamble
Shareholders’ equity attributable to Procter & Gamble (as reported)
Less: Net deferred tax assets (liabilities)
Shareholders’ equity attributable to Procter & Gamble (adjusted)
Adjustment to Net Earnings Attributable To Procter & Gamble
Net earnings attributable to Procter & Gamble (as reported)
Add: Deferred income tax expense (benefit)
Net earnings attributable to Procter & Gamble (adjusted)

Based on: 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), 10-K (reporting date: 2017-06-30).


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


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Procter & Gamble Co., adjusted financial ratios

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 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), 10-K (reporting date: 2017-06-30).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Procter & Gamble Co. adjusted net profit margin ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.
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 2020 to 2021 and from 2021 to 2022.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Procter & Gamble Co. adjusted financial leverage ratio decreased from 2020 to 2021 and from 2021 to 2022.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Procter & Gamble Co. adjusted ROE improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Procter & Gamble Co. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.

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


Adjusted Net Profit Margin

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Procter & Gamble
Net sales
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to Procter & Gamble
Net sales
Profitability Ratio
Adjusted net profit margin2

Based on: 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), 10-K (reporting date: 2017-06-30).

2022 Calculations

1 Net profit margin = 100 × Net earnings attributable to Procter & Gamble ÷ Net sales
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net earnings attributable to Procter & Gamble ÷ Net sales
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Procter & Gamble Co. adjusted net profit margin ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.

Adjusted Total Asset Turnover

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
As Reported
Selected Financial Data (US$ in millions)
Net sales
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 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), 10-K (reporting date: 2017-06-30).

2022 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= ÷ =

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 2020 to 2021 and from 2021 to 2022.

Adjusted Financial Leverage

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets
Shareholders’ equity attributable to Procter & Gamble
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted shareholders’ equity attributable to Procter & Gamble
Solvency Ratio
Adjusted financial leverage2

Based on: 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), 10-K (reporting date: 2017-06-30).

2022 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity attributable to Procter & Gamble
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity attributable to Procter & Gamble
= ÷ =

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Procter & Gamble Co. adjusted financial leverage ratio decreased from 2020 to 2021 and from 2021 to 2022.

Adjusted Return on Equity (ROE)

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Procter & Gamble
Shareholders’ equity attributable to Procter & Gamble
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to Procter & Gamble
Adjusted shareholders’ equity attributable to Procter & Gamble
Profitability Ratio
Adjusted ROE2

Based on: 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), 10-K (reporting date: 2017-06-30).

2022 Calculations

1 ROE = 100 × Net earnings attributable to Procter & Gamble ÷ Shareholders’ equity attributable to Procter & Gamble
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net earnings attributable to Procter & Gamble ÷ Adjusted shareholders’ equity attributable to Procter & Gamble
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Procter & Gamble Co. adjusted ROE improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

Adjusted Return on Assets (ROA)

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Procter & Gamble
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to Procter & Gamble
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 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), 10-K (reporting date: 2017-06-30).

2022 Calculations

1 ROA = 100 × Net earnings attributable to Procter & Gamble ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net earnings attributable to Procter & Gamble ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Procter & Gamble Co. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.