Procter & Gamble Co. (NYSE:PG)

The annual financial data reveals several key trends in profitability, invested capital, and cost of capital over the period analyzed.

Net Operating Profit After Taxes (NOPAT)

NOPAT demonstrated a consistent upward trajectory from 12,785 million USD in 2020 to an estimated 16,618 million USD in 2025. The increments occurred steadily over the years, indicating improving operational efficiency and profitability.

Cost of Capital

The cost of capital experienced a gradual increase from 8.23% in 2020, peaking at 8.54% in 2024 before slightly declining to 8.45% in 2025. This generally upward trend suggests a rising expense associated with financing the company's investments, which could be attributed to changes in market conditions or risk perceptions.

Invested Capital

Invested capital showed a slight reduction from 101,100 million USD in 2020 to 93,924 million USD in 2022, followed by a gradual increase reaching 100,282 million USD by 2025. This pattern indicates an initial contraction in assets or capital deployment, then a recovery and reinvestment phase in subsequent years.

Economic Profit

Economic profit rose markedly from 4,466 million USD in 2020 to 8,148 million USD in 2025, peaking in 2025. The trend signifies that the company is generating increasing value over and above its cost of capital, improving shareholder value through efficient capital utilization and strong profit generation.

Overall, the data suggests that despite a moderate increase in the cost of capital, the company has enhanced its profitability and economic profit substantially, supported by a stable to growing invested capital base. This reflects effective management of resources and favorable operational performance over the period analyzed.

Net earnings attributable to Procter & Gamble (P&G)

The net earnings of the company demonstrated a consistent upward trend over the analyzed periods. Starting at 13,027 million US dollars in mid-2020, earnings increased steadily each year, reaching 15,974 million US dollars by mid-2025. The growth, although steady, showed minor fluctuations in the rate of increase, with a slightly slower increment between mid-2022 and mid-2023, followed by renewed acceleration towards the end of the period.

Net operating profit after taxes (NOPAT)

NOPAT exhibited a parallel pattern to net earnings, indicating effective operational management and stable profitability. It rose from 12,785 million US dollars in mid-2020 to 16,618 million US dollars in mid-2025. The increment was generally consistent, with a slight deceleration in growth between mid-2021 and mid-2022, before regaining momentum through to the final period. This trend suggests sustained operational efficiency and the capacity to enhance profitability over time.

Tax Expense

Over the period from June 30, 2020, to June 30, 2025, the tax expense exhibits an overall upward trend. Starting at 2,731 million USD in 2020, it increases to 3,263 million USD in 2021. A slight decline occurs in 2022 with 3,202 million USD, followed by a renewed increase to 3,615 million USD in 2023. The upward trajectory continues through 2024 and 2025, reaching 3,787 million USD and 4,102 million USD, respectively. This reflects an aggregate growth of approximately 50% over the six-year span.

Cash Operating Taxes

Cash operating taxes also show an upward movement initially but with some fluctuation. Beginning at 3,400 million USD in 2020, the figure rises steadily through to 2023, peaking at 4,168 million USD. However, subsequent years see a slight decline, with values of 4,135 million USD in 2024 and further reduction to 4,054 million USD in 2025. Despite this late decrease, cash operating taxes overall have increased by roughly 19% compared to the initial 2020 figure.

Comparative Insights

Both tax expense and cash operating taxes show general increases across the analyzed timeframe, indicating a growing tax burden in absolute terms. The tax expense growth is more consistent and robust, whereas cash operating taxes peak earlier and then slightly decline. The divergence in the last two years could suggest changes in tax payment timing, cash management strategies, or variations in tax structures impacting cash taxes differently than accrued tax expenses.

Total Reported Debt & Leases

The total reported debt and leases showed a general decline from 35,611 million USD in mid-2020 to 32,293 million USD by mid-2022. However, this downward trend reversed slightly, with debt levels rising again to 35,424 million USD by mid-2023, followed by a moderate decrease in mid-2024 to 33,369 million USD, before increasing once more to 35,464 million USD by mid-2025. This pattern indicates fluctuations in debt levels, with no clear long-term reduction or increase over the six-year period.

Shareholders’ Equity Attributable to Procter & Gamble

Shareholders’ equity remained relatively stable between mid-2020 and mid-2023, fluctuating marginally between approximately 46,378 million USD and 46,777 million USD. From mid-2023 onward, equity showed a notable upward trend, rising to 50,287 million USD by mid-2024 and further to 52,012 million USD by mid-2025. This growth suggests an improvement in the company's net asset base and potential enhancement in shareholder value in recent years.

Invested Capital

Invested capital declined from 101,100 million USD in mid-2020 to 93,924 million USD by mid-2022, reflecting a reduction in the total funds employed in operations. After this trough, invested capital began to increase again, reaching 96,550 million USD in mid-2023 and continuing to rise steadily to 100,282 million USD by mid-2025. This trend implies a recovery in capital investment levels, trending toward the original 2020 amounts.

Overall Insights

The data reveals a cyclical pattern in key financial metrics over the six-year timeframe. Debt levels experienced a decrease followed by a rebound, while shareholders’ equity showed stability initially and then increased significantly in the later years. Invested capital decreased initially but reversed to a recovery path toward previous levels. Together, these trends indicate a period of financial adjustment followed by stabilization and growth in equity and capital investment, with debt management remaining somewhat variable.

Economic Profit

The economic profit shows a generally positive upward trend over the six-year period. Starting at $4,466 million in 2020, it increased significantly to $6,389 million in 2021. The value continued to rise, reaching $6,707 million in 2022. There was a slight dip to $6,507 million in 2023 before rebounding to $6,769 million in 2024 and rising sharply to $8,148 million in 2025. This indicates sustained growth in economic value generated beyond the cost of capital, with a notable acceleration in profitability by the final year.

Invested Capital

Invested capital exhibited some fluctuation but generally remained relatively stable across the years. It started at $101,100 million in 2020, then declined to $95,095 million in 2021 and further to $93,924 million in 2022. A recovery phase is observed thereafter, as invested capital increased to $96,550 million in 2023, $97,641 million in 2024, and $100,282 million in 2025. Despite the mid-period reduction, the company ultimately maintained a consistent level of invested capital close to the initial figure by 2025.

Economic Spread Ratio

The economic spread ratio, representing the return on invested capital in excess of its cost, demonstrated an improving trend with minor fluctuations. It began at 4.42% in 2020 and saw a substantial increase to 6.72% in 2021 and 7.14% in 2022. A slight decline occurred in 2023 to 6.74%, followed by a modest recovery to 6.93% in 2024, and a pronounced increase to 8.13% in 2025. This pattern indicates an enhanced efficiency in generating returns relative to cost, peaking in the final year at its highest level over the period.

Economic Profit

The economic profit of the company displayed a consistent upward trajectory over the analyzed period. Starting at 4,466 million US dollars in mid-2020, it increased significantly to 6,389 million in mid-2021 and then rose further to 6,707 million in mid-2022. Although there was a slight decline in mid-2023 to 6,507 million, the figure rebounded to 6,769 million in mid-2024 and reached its highest point at 8,148 million by mid-2025. This overall growth indicates improving profitability and effective value generation for shareholders.

Net Sales

Net sales demonstrated a steady increase throughout the six-year period, starting at 70,950 million US dollars in mid-2020 and expanding to 76,118 million in mid-2021. The upward trend continued with 80,187 million in mid-2022, 82,006 million in mid-2023, and 84,039 million in mid-2024, before slightly tapering off to 84,284 million in mid-2025. The generally positive trend in sales reflects ongoing growth in revenue generation, albeit with a marginal slowdown in the most recent year.

Economic Profit Margin

The economic profit margin, expressed as a percentage, increased overall from 6.29% in mid-2020 to a peak of 8.39% in mid-2021. It then slightly declined to 8.36% in mid-2022 and experienced a further small decrease to 7.93% in mid-2023. However, the margin recovered modestly to 8.05% in mid-2024 and rose substantially to 9.67% by mid-2025. This suggests that the company’s efficiency in generating economic profit from its sales improved, especially in the latter years, indicating enhanced operational profitability.

Summary of Trends

Across the period, the company exhibited progressive growth in both absolute profit measures and revenue. The steady rise in economic profit alongside increasing net sales suggests effective scaling of the business. The economic profit margin’s initial dip and subsequent rise imply some fluctuations in cost management or competitive dynamics but ultimately point to an improving capacity to convert sales into profit. The sharp increase in economic profit, particularly in the final year, alongside the margin's peak, signals strengthening profitability and potentially successful strategic initiatives.