Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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Solvency Ratios (Summary)
Procter & Gamble Co., solvency ratios (quarterly data)
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
The solvency profile exhibits a general trend toward deleveraging and a stabilization of the capital structure over the analyzed period. While there was a period of increased leverage peaking in early 2023, subsequent quarters show a consistent reduction in debt-related ratios, indicating a strengthened balance sheet position.
- Debt to Equity and Financial Leverage
- A cyclical pattern is observed in the debt to equity ratio, which rose from 0.71 in September 2021 to a peak of 0.81 in March 2023. Following this peak, the ratio trended downward, reaching 0.63 by June 2026. This movement is mirrored in the financial leverage ratio, which declined from a high of 2.66 in March 2023 to 2.34 by the end of the period, suggesting a systematic reduction in the company's reliance on borrowed funds relative to equity.
- Debt to Capital and Debt to Assets
- Both ratios demonstrate high levels of stability. The debt to capital ratio remained within a narrow range between 0.39 and 0.45, concluding the period at 0.39. Similarly, the debt to assets ratio fluctuated minimally between 0.27 and 0.31, ending at 0.27. These figures indicate a disciplined approach to maintaining a consistent proportion of debt within the total asset and capital bases.
- Interest Coverage
- A significant contraction in interest coverage is evident. The ratio began with strong values exceeding 40.00 in early 2022 but experienced a sustained decline to a low of 20.30 by September 2023. Since that low point, a modest recovery phase has occurred, with the ratio climbing back to 24.23 by June 2026. Despite the reduction from historical peaks, the coverage remains robust, indicating a continued capacity to service interest obligations.
In summary, the long-term solvency position has improved through a gradual decrease in leverage and a stabilization of debt proportions. The primary area of volatility was the interest coverage ratio, which, despite a notable mid-period decline, has stabilized at a level that supports financial sustainability.
Debt Ratios
Coverage Ratios
Debt to Equity
Procter & Gamble Co., debt to equity calculation (quarterly data)
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity attributable to Procter & Gamble
= ÷ =
The solvency profile of the organization exhibits a general trend toward improved financial stability over the observed period. While total debt experienced fluctuations, a consistent growth in shareholders' equity has led to an overall reduction in the leverage ratio, indicating a strengthening of the balance sheet and a lower reliance on borrowed capital relative to equity.
- Total Debt Volatility
- Total debt levels displayed a fluctuating pattern, starting at 32,547 million USD in September 2021 and reaching a peak of 37,026 million USD by March 2026. Despite periodic increases, the debt levels remained within a relatively tight band between 31,493 million USD and 37,026 million USD, concluding the period with a reduction to 34,138 million USD in June 2026.
- Shareholders' Equity Growth
- A sustained upward trajectory is observed in shareholders' equity attributable to the company. After a slight dip in late 2021 and mid-2022, equity grew from 44,075 million USD in September 2022 to a high of 54,505 million USD in March 2026. This steady accumulation of equity provides a robust cushion against total liabilities and suggests strong retained earnings or capital contributions.
- Debt to Equity Ratio Dynamics
- The debt to equity ratio peaked at 0.81 in March 2023, representing the period of highest relative leverage. Following this peak, a general downward trend emerged, with the ratio declining to 0.63 by June 2026. This decrease is primarily driven by the growth in shareholders' equity outpacing the growth in total debt. The transition from a peak of 0.81 to a low of 0.63 signifies an improved solvency position and a more conservative capital structure over the long term.
Debt to Capital
Procter & Gamble Co., debt to capital calculation (quarterly data)
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
The analysis of solvency metrics indicates a period of stability in the capital structure, characterized by a consistent balance between debt obligations and total capital. While both absolute debt and total capital figures experienced fluctuations, the resulting debt-to-capital ratio remained within a narrow range, suggesting a disciplined approach to financial leverage.
- Total Debt Trends
- Total debt exhibited moderate volatility over the observed period, fluctuating between a low of $31.49 billion in June 2022 and a peak of $37.03 billion in March 2026. A notable increase was observed between September 2021 and March 2023, followed by a period of contraction in early 2024 where debt fell to $31.98 billion. A gradual upward trend resumed from June 2024 through early 2026 before declining again in the final quarter.
- Total Capital Expansion
- Total capital demonstrated a consistent long-term growth trajectory. Starting at $78.66 billion in September 2021, the figure climbed steadily to reach a peak of $91.53 billion by March 2026. This expansion in the capital base provided a buffer that helped stabilize the solvency ratio even during periods when absolute debt levels increased.
- Debt to Capital Ratio Analysis
- The debt-to-capital ratio remained remarkably stable, oscillating between a minimum of 0.39 and a maximum of 0.45. The ratio peaked at 0.45 in March 2023, reflecting a period where debt growth outpaced capital expansion. However, the ratio returned to a lower baseline of 0.39 to 0.41 throughout 2024 and 2025. This indicates that the organization successfully managed its leverage, ensuring that debt did not exceed approximately 45% of the total capital structure at any point during the period.
Overall, the solvency profile reflects a conservative financial strategy. The synchronization between the growth of total capital and the management of total debt prevented significant spikes in leverage, maintaining a consistent solvency posture through multiple quarterly cycles.
Debt to Assets
Procter & Gamble Co., debt to assets calculation (quarterly data)
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
The solvency profile of the organization demonstrates a high degree of stability over the analyzed period from September 2021 through June 2026. The debt-to-assets ratio consistently fluctuated within a narrow band between 0.27 and 0.31, suggesting a disciplined approach to maintaining leverage levels relative to the asset base.
- Debt to Assets Ratio Trends
- The ratio maintained a baseline of approximately 0.28 for the majority of the period. A peak of 0.31 was recorded on March 31, 2023, representing the highest level of leverage during the timeframe. This was followed by a gradual reversion toward the baseline, returning to 0.27 by March 2024. By June 2026, the ratio settled at 0.27, indicating that the company has successfully managed its debt obligations in proportion to its asset growth.
- Total Debt Analysis
- Total debt exhibited periodic volatility, ranging from a low of 31,493 million USD in June 2022 to a peak of 37,026 million USD in March 2026. These fluctuations suggest a cyclical pattern of debt issuance and repayment. Notable increases occurred between September 2024 and March 2026, where debt rose from 36,153 million USD to over 37,000 million USD, before decreasing to 34,138 million USD by June 2026.
- Total Assets Evolution
- A gradual upward trajectory in total assets is observable. Assets grew from 119,669 million USD in September 2021 to a peak of 128,378 million USD in March 2026. This consistent growth in the asset base has served as a primary stabilizer for the solvency ratio, offsetting the periodic increases in total debt and ensuring that the overall leverage remains constrained.
In summary, the relationship between total debt and total assets remained balanced. The company's ability to keep the debt-to-assets ratio near 0.28 despite fluctuations in absolute debt levels indicates a stable financial structure and a controlled risk appetite regarding long-term solvency.
Financial Leverage
Procter & Gamble Co., financial leverage calculation (quarterly data)
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity attributable to Procter & Gamble
= ÷ =
An analysis of the solvency metrics reveals a gradual decompression of financial leverage over the observed period. The company transitioned from a more aggressive capital structure in late 2021 to a more conservative position by mid-2026, characterized by a consistent reduction in the ratio of total assets to shareholders' equity.
- Total Assets Trend
- Total assets exhibited moderate volatility with a general upward trajectory. Starting at 119,669 million US$ in September 2021, the asset base reached a peak of 128,378 million US$ in March 2026 before slightly contracting to 126,521 million US$ by June 2026. This suggests a period of steady expansion in the company's resource base.
- Shareholders' Equity Growth
- Shareholders' equity attributable to the company demonstrated a strong and consistent growth pattern. After an initial dip to 44,075 million US$ in September 2022, equity climbed steadily, surpassing 50,000 million US$ in March 2024 and reaching 54,081 million US$ by June 2026. This increase in the equity base served as the primary driver for the improvement in solvency ratios.
- Financial Leverage Dynamics
- The financial leverage ratio peaked at 2.72 in December 2021, indicating a higher reliance on liabilities to fund assets. Following this peak, the ratio entered a general downward trend, with a notable period of decline beginning in September 2023 (2.57) and continuing through June 2026 (2.34). The reduction of approximately 0.38 points over the period signifies a decrease in financial risk and an enhanced solvency profile.
The convergence of growing shareholders' equity and relatively stable asset growth has resulted in a strengthened balance sheet. The persistent decline in the leverage ratio since 2023 suggests a strategic prioritization of equity financing or debt reduction, thereby lowering the company's overall financial risk exposure.
Interest Coverage
Procter & Gamble Co., interest coverage calculation (quarterly data)
Based on: 10-K (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30).
1 Q4 2026 Calculation
Interest coverage
= (EBITQ4 2026
+ EBITQ3 2026
+ EBITQ2 2026
+ EBITQ1 2026)
÷ (Interest expenseQ4 2026
+ Interest expenseQ3 2026
+ Interest expenseQ2 2026
+ Interest expenseQ1 2026)
= ( + + + )
÷ ( + + + )
=
The analysis of solvency indicators reveals a distinct shift in the interest coverage profile from 2021 through 2026. The coverage ratio underwent a period of significant contraction before reaching a new equilibrium, reflecting a change in the relationship between operating earnings and debt servicing costs.
- Interest Expense Trends
- A substantial increase in interest expenses is evident, rising from an average of approximately 110 million US$ in 2021 to consistently exceed 200 million US$ starting in early 2023. The most aggressive acceleration occurred between September 2022 and March 2023, during which expenses nearly doubled, creating downward pressure on the solvency ratio.
- Earnings Before Interest and Tax (EBIT) Volatility
- EBIT exhibited cyclical fluctuations throughout the period, with significant peaks reaching 6.2 billion US$ in September 2025 and lows around 3.7 billion US$ in June 2022. While operating income remained strong, the volatility in these earnings contributed to the quarterly fluctuations observed in the coverage ratio.
- Interest Coverage Ratio Dynamics
- The coverage ratio peaked at 41.99 in June 2022 before initiating a steady decline that reached a low of 20.30 in June 2024. Following this decline, the ratio entered a phase of relative stability, fluctuating within a range of 21.0 to 25.6 through June 2026. Despite the reduction from peak levels, the ratio remains high, indicating a continued and substantial capacity to meet interest obligations from operating profits.