Procter & Gamble Co. (NYSE:PG)

The analysis of the presented financial metrics reveals a generally stable, though fluctuating, performance over the observed period. Return on Equity (ROE) consistently remains above 28%, demonstrating a strong capacity to generate profit from shareholder investments. This performance is driven by a combination of Return on Assets (ROA) and Financial Leverage, both of which exhibit discernible trends.

Return on Assets (ROA)

ROA demonstrates an overall upward trend, beginning at 11.44% in September 2020 and reaching a peak of 13.14% in March 2025. However, this progression is not linear. A slight decline is observed from June 2022 to September 2022, followed by a recovery and continued growth through March 2025. A minor decrease is then noted in June 2025, settling at 12.76%. The fluctuations suggest sensitivity to underlying operational efficiencies or asset utilization.

Financial Leverage

Financial Leverage generally increased from 2.49 in September 2020 to a high of 2.72 in December 2021. Subsequently, a downward trend is apparent, decreasing to 2.35 in March 2025 before a slight increase to 2.41 in June 2025. This indicates a shifting approach to capital structure, with a reduction in the reliance on debt financing after the peak in late 2021. The recent stabilization suggests a deliberate management of leverage levels.

Return on Equity (ROE) – Two-Component Disaggregation

ROE’s movement closely mirrors the combined effect of ROA and Financial Leverage. The initial increase in ROE from 28.46% to 32.52% (September 2020 to December 2021) is attributable to both rising ROA and increasing leverage. The subsequent period (December 2021 to September 2022) shows ROE remaining relatively stable despite a decrease in leverage, suggesting that the increase in ROA partially offset the impact of reduced financial leverage. From September 2022 through March 2025, ROE continues to increase, driven by improvements in ROA. The slight dip in ROE in June 2025 corresponds with the minor decrease in ROA, while leverage remains relatively stable.

In conclusion, the observed trends suggest a company focused on improving asset utilization, as evidenced by the ROA progression. The management of financial leverage demonstrates a strategic approach to capital structure, with a peak in utilization followed by a controlled reduction. The consistent ROE performance indicates effective management of both profitability and financial risk.

The period under review demonstrates a generally stable, though fluctuating, Return on Equity (ROE). This performance is dissected through its three core components: Net Profit Margin, Asset Turnover, and Financial Leverage. Overall, ROE exhibited a peak in early 2021 and has since experienced a moderate decline, followed by a recent recovery towards the end of the observed timeframe.

Net Profit Margin

The Net Profit Margin remained consistently high, generally fluctuating between 17.69% and 19.74% throughout the period. A slight downward trend was observed from September 2020 through December 2022, bottoming out at 17.69%. However, the margin experienced a notable increase in the latter quarters, reaching 19.74% in March 2025 and 19.30% in June 2025. This suggests improving profitability or effective cost management in recent periods.

Asset Turnover

Asset Turnover showed a gradual increasing trend from 0.60 in September 2020 to a peak of 0.69 in September 2022. Following this peak, a slight decline was observed, reaching 0.66 in September 2024. A modest recovery occurred in the final quarters, with the ratio stabilizing around 0.67-0.68. This indicates a generally efficient use of assets to generate sales, with a minor decrease in efficiency in the most recent periods.

Financial Leverage

Financial Leverage exhibited an increasing trend from 2.49 in September 2020 to a high of 2.72 in December 2021. Subsequently, leverage decreased to 2.39 in March 2024, before stabilizing around 2.40-2.44 for the remainder of the period. This suggests a strategic adjustment in the company’s capital structure, potentially reducing reliance on debt financing after an initial period of increased borrowing.

The interplay between these three components explains the ROE fluctuations. The initial ROE increase in early 2021 was driven by improvements in both Net Profit Margin and Asset Turnover, coupled with a moderate increase in Financial Leverage. The subsequent ROE decline was influenced by a slight decrease in Net Profit Margin and Asset Turnover, alongside a reduction in Financial Leverage. The recent ROE recovery is primarily attributable to the improved Net Profit Margin, partially offset by a slight decrease in Asset Turnover and stable Financial Leverage.

In conclusion, the company demonstrates a strong ability to generate profits from its assets, amplified by its use of financial leverage. Recent performance indicates a focus on maintaining profitability, with adjustments to asset utilization and capital structure.

The five-component DuPont analysis reveals several trends in the company’s performance between September 2020 and December 2025. Overall, Return on Equity (ROE) demonstrates a generally strong performance, with fluctuations throughout the period. The key drivers of these fluctuations are shifts in EBIT Margin, Asset Turnover, and Financial Leverage, while Tax Burden and Interest Burden remain relatively stable.

Tax Burden

The Tax Burden exhibits remarkable consistency, fluctuating narrowly between 0.79 and 0.82 throughout the observed period. A slight downward trend is noticeable in the latter half of the period, decreasing from 0.82 in September 2020 to 0.80 in December 2025, though the variation remains minimal.

Interest Burden

Similar to the Tax Burden, the Interest Burden remains largely stable, ranging from 0.95 to 0.98. A gradual decline is observed from 0.97 in September 2020 to 0.96 in December 2025, indicating a slight improvement in the company’s ability to cover its interest expenses, but the change is modest.

EBIT Margin

The EBIT Margin shows a more pronounced pattern of change. It begins at 23.73% in September 2020 and generally increases, peaking at 25.71% in March 2025. A subsequent decline is observed, falling to 24.05% in September 2025 and stabilizing at 24.90% in December 2025. This suggests periods of improved operational efficiency and profitability, followed by a potential normalization or increased cost pressures.

Asset Turnover

Asset Turnover demonstrates a gradual increase from 0.60 in September 2020 to a high of 0.70 in March 2023. Following this peak, it experiences a decline, reaching 0.67 in December 2025. This indicates an initial improvement in the efficiency of asset utilization, followed by a potential slowdown in sales relative to assets.

Financial Leverage

Financial Leverage exhibits a clear upward trend from 2.49 in September 2020, peaking at 2.72 in December 2021. Subsequently, it declines to 2.35 in March 2025 before stabilizing around 2.40-2.41. This suggests an initial increase in the use of debt financing, followed by a reduction in leverage, potentially indicating a shift in capital structure strategy or a decrease in reliance on debt.

The interplay of these components significantly influences ROE. The increase in ROE from 28.46% in September 2020 to a peak of 32.52% in December 2021 is driven by increases in both Financial Leverage and EBIT Margin. The subsequent fluctuations in ROE reflect the combined effects of changes in all five components, with the decline from 31.02% in March 2024 to 30.71% in June 2025 primarily attributable to a decrease in Asset Turnover, despite a continued strong EBIT Margin. The final increase to 31.47% in September 2025 and stabilization at 31.02% in December 2025 suggests a recovery in overall performance.

The financial performance, as indicated by the provided metrics, demonstrates a generally stable, though fluctuating, trend over the analyzed period. Return on Assets (ROA) consistently remained above 11%, exhibiting a slight overall increase throughout the timeframe. This performance is driven by the interplay between Net Profit Margin and Asset Turnover, both of which show distinct patterns.

Net Profit Margin

The Net Profit Margin generally remained within a narrow band between 17.6% and 19.7% throughout the period. A slight downward trend was observed from September 2020 through December 2022, followed by a recovery and subsequent increase, peaking in June 2025 at 19.7%. The most recent period, December 2025, shows a slight decrease from this peak, but remains elevated compared to earlier periods. This suggests improving profitability in recent quarters.

Asset Turnover

Asset Turnover exhibited a gradual increasing trend from 0.60 in September 2020 to a high of 0.69 in June 2022. A slight decline was then observed through September 2024, falling to 0.66. However, the ratio recovered somewhat in the final two periods, reaching 0.67 and 0.68. This indicates a generally efficient use of assets to generate revenue, with some recent stabilization after a period of growth.

Return on Assets (ROA)

ROA demonstrated a positive correlation with both Net Profit Margin and Asset Turnover. The initial increase in ROA from September 2020 to March 2021 was primarily driven by improvements in Asset Turnover. From March 2021 through December 2022, both ratios contributed to the increase in ROA. The slight dip in ROA in September 2022 coincided with a decrease in both Net Profit Margin and Asset Turnover. The subsequent recovery and continued growth in ROA through June 2025 were supported by improvements in both components, particularly a notable increase in Net Profit Margin. The slight decrease in ROA in December 2025 mirrors the slight decrease in Net Profit Margin.

Overall, the analysis suggests a company that has maintained consistent profitability and efficient asset utilization. Recent performance indicates a strengthening of profitability, contributing to a generally positive trend in ROA. Fluctuations in Asset Turnover appear to have a moderating effect on ROA, but the overall trend remains positive.

The financial performance, as disaggregated through a four-component DuPont analysis, reveals several noteworthy trends over the observed period. Generally, Return on Assets (ROA) demonstrates a relatively stable performance with a slight upward trajectory towards the end of the period, driven by improvements in profitability and efficiency. However, fluctuations are present, and the interplay between the components warrants detailed examination.

Tax Burden

The tax burden exhibits remarkable consistency, fluctuating narrowly between 0.80 and 0.82 throughout the period. A slight downward trend emerges in the latter portion of the observation window, decreasing from 0.82 in September 2020 to 0.79 in December 2023, before stabilizing around 0.80. This suggests a minor reduction in the proportion of pre-tax profits retained after tax payments, though the effect is limited.

Interest Burden

The interest burden remains consistently high, generally above 0.95, indicating a substantial portion of earnings is required to cover interest expenses. A minor decline is observed from 0.97 in the initial periods to 0.95 in December 2023, followed by a slight recovery to 0.96 by June 2025. This suggests a marginal improvement in the company’s ability to cover its interest obligations, but the overall burden remains significant.

EBIT Margin

The EBIT margin demonstrates the most significant variability among the components. It begins at 23.73% in September 2020 and generally increases, peaking at 25.71% in March 2025. A dip to 22.42% is observed in September 2022, followed by a recovery and subsequent peak. This indicates fluctuations in operational profitability, potentially influenced by factors such as pricing strategies, cost management, and product mix. The overall trend suggests improving operational efficiency and profitability.

Asset Turnover

Asset turnover shows a gradual increasing trend from 0.60 in September 2020 to 0.70 in December 2023, indicating improved efficiency in utilizing assets to generate sales. However, a slight decrease is observed in subsequent periods, falling to 0.67 by June 2025. This suggests a potential slowdown in the rate at which assets are converted into sales, possibly due to inventory management or changes in sales strategies. Despite the recent decline, the asset turnover remains relatively stable and at a healthy level.

Return on Assets (ROA)

ROA exhibits a generally positive trend, increasing from 11.44% in September 2020 to 12.93% in March 2025. The fluctuations in ROA largely mirror the changes in EBIT margin and asset turnover. The slight decline in asset turnover in the latter periods is partially offset by the continued strength in the EBIT margin, resulting in a sustained ROA. The overall trend suggests improving profitability and efficiency in asset utilization, contributing to enhanced returns for shareholders.

In conclusion, the analysis reveals a company demonstrating consistent profitability and improving asset utilization. While the interest burden remains a significant factor, the positive trends in EBIT margin and asset turnover contribute to a stable and slightly increasing ROA. The minor fluctuations observed across all components suggest the company is navigating a dynamic business environment, but maintains a generally healthy financial position.

The period under review demonstrates generally stable, though subtly shifting, profitability metrics. The company exhibits consistent performance across the examined timeframe, with some observable trends in the components contributing to net profit. Overall, the EBIT margin shows a general upward trajectory, while the net profit margin experiences more fluctuation, influenced by changes in tax and interest burdens.

Tax Burden

The tax burden remains consistently high, fluctuating narrowly between 0.79 and 0.82 throughout the period. A slight downward trend is discernible in the latter portion of the timeframe, decreasing from 0.82 in September 2020 to 0.79 in December 2023, before stabilizing around 0.80 in the final quarters. This suggests a minor reduction in the proportion of pre-tax profits allocated to taxes.

Interest Burden

The interest burden is also remarkably stable, generally holding around 0.97 to 0.98. A modest decrease is observed towards the end of the period, falling to 0.95 in December 2023 and remaining at that level for the subsequent two quarters, before increasing slightly to 0.96. This indicates a slight improvement in the ability to cover interest expenses with earnings.

EBIT Margin

The EBIT margin demonstrates a positive trend overall. Starting at 23.73% in September 2020, it experiences fluctuations but generally increases, peaking at 25.71% in March 2025. There is a dip in the margin in June 2022 (22.93%) and September 2022 (22.80%), but it recovers strongly in subsequent periods. This suggests improving operational efficiency and profitability before considering interest and taxes.

Net Profit Margin

The net profit margin exhibits more variability than the EBIT margin. It begins at 18.92% and fluctuates throughout the period, ranging from a low of 17.69% to a high of 19.74%. While generally tracking the EBIT margin, the net profit margin is more sensitive to changes in the tax and interest burdens. The most recent quarters show a strengthening net profit margin, increasing from 19.30% in March 2024 to 19.74% in March 2025, indicating that the benefits of improved EBIT are translating into higher net profits despite relatively stable tax and interest expenses.

In summary, the company demonstrates a consistent ability to generate earnings before interest and taxes, with a clear upward trend. The net profit margin, while more volatile, also shows a positive trend in the most recent periods, suggesting effective management of both operational profitability and financial expenses.