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Procter & Gamble Co. (NYSE:PG)
Analysis of Investments
Advanced level
Accounting Policy on Investments
Investment securities primarily consist of readily marketable debt securities. Unrealized gains or losses from investments classified as trading, if any, are charged to earnings. Unrealized gains or losses on debt securities classified as available-for-sale are recorded in OCI. If an available-for-sale security is other than temporarily impaired, the loss is charged to either earnings or OCI depending on the intent and ability to retain the security until P&G recovers the full cost basis and the extent of the loss attributable to the creditworthiness of the issuer. Investment securities are included as Available-for-sale investment securities and Other noncurrent assets in the Consolidated Balance Sheets.
Investments in certain companies over which P&G exerts significant influence, but does not control the financial and operating decisions, are accounted for as equity method investments. Other investments that are not controlled, and over which P&G does not have the ability to exercise significant influence, are accounted for under the cost method. Both equity and cost method investments are included as Other noncurrent assets in the Consolidated Balance Sheets.
Source: 10-K (filing date: 2019-08-06).
Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Procter & Gamble Co., adjustment to net earnings attributable to Procter & Gamble
US$ in millions
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Procter & Gamble Co., adjusted profitability ratios
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Procter & Gamble Co.’s adjusted net profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by shareholders’ equity. | Procter & Gamble Co.’s adjusted ROE deteriorated from 2017 to 2018 and from 2018 to 2019. |
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by total assets. | Procter & Gamble Co.’s adjusted ROA deteriorated from 2017 to 2018 and from 2018 to 2019. |
Procter & Gamble Co., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
2019 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 revenue. | Procter & Gamble Co.’s adjusted net profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019. |
Adjusted Return on Equity (ROE)
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
2019 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 ÷ Shareholders’ equity attributable to Procter & Gamble
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by shareholders’ equity. | Procter & Gamble Co.’s adjusted ROE deteriorated from 2017 to 2018 and from 2018 to 2019. |
Adjusted Return on Assets (ROA)
Based on: 10-K (filing date: 2019-08-06), 10-K (filing date: 2018-08-07), 10-K (filing date: 2017-08-07), 10-K (filing date: 2016-08-09), 10-K (filing date: 2015-08-07), 10-K (filing date: 2014-08-08).
2019 Calculations
1 ROA = 100 × Net earnings attributable to Procter & Gamble ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net earnings attributable to Procter & Gamble ÷ Total assets
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by total assets. | Procter & Gamble Co.’s adjusted ROA deteriorated from 2017 to 2018 and from 2018 to 2019. |