Procter & Gamble Co. (NYSE:PG)

Return on Assets (ROA)

The Return on Assets exhibited an overall upward trend from 10.79% in mid-2020 to 12.76% projected in mid-2025. There was consistent improvement each year until mid-2022, reaching 12.58%, followed by a slight decline in mid-2023 to 12.13%, then stabilization and modest increase towards the latest estimate. This suggests enhanced efficiency in asset utilization over the period, despite minor short-term fluctuations.

Financial Leverage

Financial leverage showed a gradual decline over the years, starting at 2.59 in mid-2020 and decreasing to 2.41 projected by mid-2025. The ratio remained relatively stable between 2.52 and 2.59 in the initial years before entering a slow downward slope after mid-2022. This indicates a moderate reduction in reliance on debt financing relative to equity, implying a conservative approach to capital structure management.

Return on Equity (ROE)

Return on Equity improved from 28% in mid-2020 to a peak of 31.64% in mid-2022, followed by a slight decrease to 29.59% in mid-2024 before a minor rebound to 30.71% in the mid-2025 forecast. The trend demonstrates strong profitability from shareholders’ perspective with some volatility but generally maintaining high returns. The slight dips may be influenced by adjustments in financial leverage or operational factors.

Net Profit Margin

The net profit margin displayed a moderate fluctuation over the observed period. It increased from 18.36% in 2020 to a peak of 18.79% in 2021, then slightly declined in subsequent years, reaching 17.7% in 2024 before rising again to 18.95% in 2025. Overall, the margin shows resilience with minor variability, suggesting sustained profitability levels.

Asset Turnover

This ratio showed a generally increasing trend from 0.59 in 2020 to 0.69 in 2024, indicating improved efficiency in using assets to generate revenue. However, in 2025, there was a slight decline to 0.67. The upward trend until 2024 reflects enhanced operational effectiveness, though the minor drop at the end calls for monitoring.

Financial Leverage

Financial leverage demonstrated a declining trend over the period, falling from 2.59 in 2020 to 2.41 by 2025. This gradual reduction points to a potential decrease in reliance on debt financing, reflecting a more conservative capital structure and possibly lower financial risk.

Return on Equity (ROE)

ROE increased notably from 28% in 2020 to a peak of 31.64% in 2022, indicating improved profitability relative to shareholder equity. After a slight decline to 29.59% in 2024, ROE rebounded to 30.71% in 2025. The fluctuations suggest that while performance has generally strengthened, there are periodic variations possibly linked to changes in other financial metrics.

Tax Burden

The tax burden ratio exhibits a slight declining trend from 0.83 in 2020 to 0.80 in 2024, maintaining stability thereafter in 2025. This indicates a modest reduction in the proportion of earnings paid in taxes over the years, reflecting potentially improved tax efficiency or changes in tax regulation.

Interest Burden

The interest burden ratio remains relatively stable, fluctuating narrowly around 0.95 to 0.98 throughout the period. This stability suggests consistent control over interest expenses relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin shows a generally positive trend, increasing from 22.87% in 2020 to 24.9% in 2025. Within this period, minor fluctuations are observed, but the overall increase indicates improved operating profitability margins, signifying enhanced operational efficiency or pricing power.

Asset Turnover

Asset turnover improves from 0.59 in 2020 to a peak of 0.69 in 2024, followed by a slight decline to 0.67 in 2025. The upward trend to 2024 suggests better utilization of assets in generating sales, although the small decrease in 2025 may warrant monitoring for potential inefficiencies.

Financial Leverage

Financial leverage decreases steadily from 2.59 in 2020 to 2.41 in 2025. This reduction implies a gradual decrease in reliance on debt financing relative to equity, indicating a conservative approach to capital structure and potentially lower financial risk.

Return on Equity (ROE)

ROE increases from 28% in 2020 to a peak of 31.64% in 2022, followed by a slight decline to 29.59% in 2024 before recovering to 30.71% in 2025. Despite some variability, the overall high levels of ROE throughout the period reflect strong profitability and effective use of shareholders' equity.

Net Profit Margin

The net profit margin exhibited a generally stable trend from 2020 to 2025. It started at 18.36% in 2020 and experienced a slight increase to 18.79% in 2021. However, a gradual decrease followed over the next three years, reaching 17.7% in 2024. The margin then showed a notable recovery to 18.95% by 2025, indicating improved profitability in the most recent period.

Asset Turnover

Asset turnover demonstrated a consistent upward trend from 2020 through 2024 before a minor decline in 2025. The ratio increased steadily from 0.59 in 2020 to a peak of 0.69 in 2024, reflecting enhanced efficiency in the use of assets to generate sales. The slight decrease to 0.67 in 2025 suggests a marginal reduction in asset utilization efficiency in the latest year.

Return on Assets (ROA)

Return on assets showed an overall positive trajectory from 2020 through 2025. Starting at 10.79% in 2020, ROA increased each year until reaching 12.58% in 2022. Although it dipped slightly to 12.13% in 2023, it remained relatively stable in 2024 at 12.16%, before increasing again to 12.76% in 2025. These fluctuations indicate a generally improving ability to generate profit from assets despite minor short-term variations.

Tax Burden

The tax burden ratio shows a slight decline from 0.83 in 2020 to 0.8 in 2023 and remains stable at 0.8 through 2025. This indicates a modest decrease in the proportion of pre-tax income retained after taxes, suggesting a marginally improving tax efficiency or possibly changes in tax regulations or company strategy.

Interest Burden

The interest burden remains relatively stable over the observed periods, fluctuating narrowly between 0.95 and 0.98. This stability indicates that the company has maintained consistent control over interest expenses relative to earnings before interest and taxes, reflecting steady financing costs.

EBIT Margin

The EBIT margin shows a positive trend overall, increasing from 22.87% in 2020 to 24.9% in 2025. Despite minor fluctuations, this upward movement suggests improving operational efficiency and profitability before interest and tax expenses over the period.

Asset Turnover

The asset turnover ratio demonstrates an increase from 0.59 in 2020 to a peak of 0.69 in 2024, followed by a slight decrease to 0.67 in 2025. This trend reflects improved efficiency in using assets to generate sales until 2024, with a minor reduction in turnover afterward.

Return on Assets (ROA)

ROA rises from 10.79% in 2020 to 12.76% in 2025, albeit with some fluctuations in intermediate years. This upward trend indicates enhanced overall profitability relative to asset base, driven by improved margins and asset utilization.

The financial data reveals several notable trends concerning profitability and expense management over the examined periods.

Tax Burden

The tax burden ratio exhibits a slight declining trend from 0.83 in mid-2020 to 0.80 by mid-2023, after which it stabilizes and remains constant through mid-2025. This suggests a modest reduction in the effective tax rate, potentially contributing to higher net earnings.

Interest Burden

The interest burden ratio remains relatively stable with minor fluctuations, maintaining levels close to 0.95 to 0.98 throughout the entire timeframe. This stability indicates consistent management of interest expenses relative to earnings before interest and taxes, without significant changes in leverage or cost of debt.

EBIT Margin

The EBIT margin shows a general upward trend, increasing from 22.87% in 2020 to 24.9% by 2025. Despite a small dip in 2022, the margin recovers and improves steadily, reflecting improved operational efficiency or pricing power that enhances earnings before interest and taxes.

Net Profit Margin

The net profit margin presents a more variable pattern. It begins at 18.36% in 2020, experiences a peak near 18.79% in 2021, then declines to a low of 17.7% in 2024 before rebounding to 18.95% in 2025. This fluctuation may indicate the influence of factors beyond operating income and taxes, such as changes in non-operating expenses, interest costs, or other one-time items affecting net earnings.

Overall, the data points to effective control over taxation and interest expenses while demonstrating improving operating profitability. The variability in net profit margin suggests close attention should be paid to elements impacting the bottom line beyond EBIT, but the upward trajectory by the final period reflects favorable financial performance.