Common-Size Income Statement
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Procter & Gamble Co., common-size consolidated income statement
Based on: 10-K (reporting date: 2026-06-30), 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30).
The common-size income statement reveals a period of relative stability in profitability margins, characterized by a temporary contraction in gross margins followed by a recovery. Overall operational efficiency remains consistent, with net earnings attributable to common shareholders fluctuating within a narrow range of approximately 1.3 percentage points over the six-year period.
- Gross Profitability and Cost Management
- A significant increase in the cost of products sold was observed in 2022, rising to 52.57% of net sales and reducing the gross profit margin to 47.43%. However, a recovery trend followed, with gross margins returning to 51.39% by 2024. By 2026, the cost of products sold stabilized near 49.82%, indicating a successful mitigation of the cost pressures experienced in the earlier period.
- Operating Expense Trends
- Selling, general, and administrative expenses have remained largely stable, typically fluctuating between 25% and 28% of net sales. A notable non-recurring event occurred in 2024, where an indefinite-lived intangible asset impairment charge of 1.60% of net sales was recorded. Despite this charge, operating income remained resilient, peaking at 24.26% in 2025 before settling at 22.69% in 2026.
- Non-Operating Items and Tax Impact
- Interest expenses as a percentage of net sales showed a gradual upward trend, increasing from 0.66% in 2021 to a peak of 1.10% in 2024, before stabilizing around 1.01% in 2026. This was partially offset by a modest increase in interest income. Income taxes have remained consistent as a percentage of sales, ranging from 3.99% to 4.87%.
- Net Earnings Analysis
- The net earnings attributable to common shareholders demonstrate high stability. After a slight decline from 18.44% in 2021 to a low of 17.37% in 2024, the margin rebounded to 18.61% in 2025. The final reported figure for 2026 indicates a net margin of 18.10%, suggesting that the organization maintains a consistent ability to convert sales into bottom-line profit despite fluctuations in production costs and one-time impairment charges.