Procter & Gamble Co. (NYSE:PG)

Debt to Equity Ratios

Over the examined periods, the debt to equity ratio demonstrates a generally stable pattern with minor fluctuations. Starting at 0.75 in mid-2020, it experiences a slight decline to 0.68 by mid-2022, followed by a brief increase to 0.74 in mid-2023, and then decreases again to 0.65 in mid-2024 before a marginal rise to 0.66 by mid-2025. When including operating lease liabilities, the ratio follows a similar trend but remains slightly higher in each corresponding year.

Debt to Capital Ratios

The debt to capital ratio shows a modest downward trend over the years, moving from 0.43 in 2020 to 0.39 in 2024, illustrating a slight reduction in leverage relative to capital. Including operating lease liabilities, the ratio maintains a parallel trend, with values very close to the standard ratio, indicating a consistent impact of lease liabilities on capital structure.

Debt to Assets Ratios

The debt to assets ratio remains fairly constant, oscillating between 0.27 and 0.29 during the periods reviewed. Inclusion of operating lease liabilities results in a slight increase in the ratio across all years, reflecting a stable proportion of debt relative to total assets without significant changes in financial risk profile.

Financial Leverage

Financial leverage exhibits a slow but noticeable decrease over time. It begins at 2.59 in 2020 and declines steadily to 2.41 by 2025. This reduction in leverage suggests a gradual strengthening of the equity base relative to assets and liabilities, implying potential improvement in the company’s financial stability.

Interest Coverage Ratio

The interest coverage ratio shows considerable volatility. It rises from 35.05 in 2020 to a peak of 41.99 in 2022, indicating strong earnings relative to interest expenses during that period. However, a sharp decline occurs in 2023 down to 25.28, continuing downward to 21.28 in 2024, with a slight recovery to 23.23 by 2025. This pattern suggests increasing challenges in covering interest costs post-2022, possibly due to rising debt costs or decreased operating income.

Fixed Charge Coverage Ratio

Similarly, the fixed charge coverage ratio improves initially, moving from 15.5 in 2020 to 18.38 in 2022, before declining to 12.98 in 2024. A modest recovery occurs by 2025, reaching 13.75. This ratio’s trend aligns with the interest coverage ratio, indicating reduced capacity to cover fixed obligations after 2022, although the coverage remains above 12, suggesting adequate albeit diminished capacity to meet fixed charges.

Total Debt

The total debt exhibited moderate fluctuations over the observed periods. Beginning at 34,720 million USD in mid-2020, it decreased steadily to a low of 31,493 million USD by mid-2022. Subsequently, the debt level increased again, reaching 34,508 million USD by mid-2025. This pattern suggests active debt management with periods of reduction followed by renewed borrowing or increased liabilities.

Shareholders’ Equity

Shareholders' equity showed a general upward trend across the periods. Starting at 46,521 million USD in mid-2020, it remained relatively stable through mid-2023, with minor fluctuations around 46,000 to 46,700 million USD. From mid-2023 onward, equity increased more significantly, reaching 52,012 million USD by mid-2025. This growth indicates strengthening net assets, potentially driven by retained earnings or value appreciation.

Debt to Equity Ratio

The debt-to-equity ratio declined from 0.75 in mid-2020 to a trough of 0.65 in mid-2024, suggesting an improvement in capital structure and a reduction in financial leverage relative to equity. However, by mid-2025, a slight increase to 0.66 occurred, indicating a marginal rise in leverage. Overall, the ratio reflects a cautious but effective management of debt relative to equity.

The financial data over the period from June 30, 2020 to June 30, 2025 reveal several notable trends regarding the company's capital structure and leverage.

Total Debt (including operating lease liability)

The total debt fluctuated over the years, starting at $35,611 million in 2020 and decreasing to $32,838 million in 2021. It continued to decline slightly to $32,293 million in 2022 before increasing again to $35,424 million in 2023. In 2024, debt fell to $33,369 million but rose once more to $35,464 million in 2025. This pattern indicates some volatility in borrowing levels, with a general oscillation around the $33 billion to $35 billion range.

Shareholders’ Equity Attributable to Procter & Gamble

Shareholders’ equity showed a steady upward trend throughout the period. Starting at $46,521 million in 2020, equity remained relatively stable through 2021 and 2022 at approximately $46,378 million and $46,589 million respectively. It increased slightly to $46,777 million in 2023 and then rose more significantly to $50,287 million in 2024 and $52,012 million in 2025. This rise suggests consistent value creation for shareholders and retained earnings accumulation over time.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio exhibited a downward trend from 0.77 in 2020 to 0.69 in 2022, indicating a gradual reduction in leverage relative to equity. However, the ratio increased again to 0.76 in 2023 before declining to its lowest point of 0.66 in 2024. It then slightly increased to 0.68 in 2025. This pattern reflects a generally conservative financial structure with intermittent adjustments in debt levels relative to equity, maintaining leverage well below 1.0 throughout the period.

Overall, the data show that the company has maintained a relatively stable and conservative capital structure, with a consistent emphasis on growing shareholders’ equity while managing debt levels within a moderate range. The fluctuations in total debt and the debt to equity ratio suggest active capital management, likely aimed at optimizing the cost of capital and maintaining financial flexibility.

Total Debt

The total debt experienced a moderate decline from 34,720 million USD in 2020 to a low of 31,493 million USD in 2022. Subsequently, there was an increase, reaching 34,607 million USD in 2023. The levels fluctuated slightly thereafter, with the debt amounting to 34,508 million USD by 2025, indicating a generally stable but somewhat cyclical debt profile over the period.

Total Capital

Total capital showed a slight downward trend from 81,241 million USD in 2020 to 78,082 million USD in 2022. After this trough, the capital base gradually increased, reaching 86,520 million USD by 2025, marking an overall increase in the capital employed in the business towards the end of the period.

Debt to Capital Ratio

The debt to capital ratio decreased from 0.43 in 2020 to 0.40 in 2022, indicating a reduction in the proportion of debt financing relative to total capital. It rose back to 0.43 in 2023 before declining again to 0.39 in 2024 and slightly increasing to 0.40 in 2025. This pattern suggests a fluctuating but overall moderate use of leverage, with the ratio remaining relatively stable around the 0.40 mark over the full time span.

The financial data reveals several notable trends regarding the company's leverage and capital structure over the recent years.

Total Debt (including operating lease liability)

The total debt experienced a decline from US$35,611 million in June 2020 to US$32,293 million in June 2022. However, this was followed by an increase in subsequent years, reaching US$35,464 million by June 2025. This indicates a moderate fluctuation in the debt levels, with an overall tendency to return to initial levels after a period of reduction.

Total Capital (including operating lease liability)

Total capital showed a slight decrease from US$82,132 million in June 2020 to US$78,882 million in June 2022, followed by a steady increase thereafter. By June 2025, total capital rose to US$87,476 million, surpassing the initial reported value in 2020. This suggests a phase of capital expansion after a brief contraction.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio started at 0.43 in June 2020, decreased slightly to 0.41 in 2021 and 2022, then rose again to 0.43 in 2023 before settling around 0.40-0.41 in the following years. This indicates that the proportion of debt in the overall capital structure remained relatively stable, fluctuating within a narrow range and reflecting consistent leverage management over the period.

Overall, the data displays a relatively stable capital structure with some volatility in absolute debt and capital amounts. The company's leverage ratio remained steady, suggesting a controlled approach in balancing debt and equity financing despite changes in absolute capital and debt levels. Such stability may indicate prudent financial management aligning with strategic objectives over the analyzed periods.

Total debt

The total debt level shows some fluctuations over the six-year period. It decreased from $34,720 million in 2020 to a low of $31,493 million in 2022, indicating a reduction in leverage during these years. However, debt increased again thereafter, reaching $34,508 million in 2025, close to its initial level in 2020. This suggests a cyclical pattern in borrowing or debt management strategies.

Total assets

Total assets exhibit a generally upward trend from 2020 through 2025. Starting at $120,700 million in 2020, assets slightly decreased to $117,208 million in 2022, but then consistently increased, reaching $125,231 million in 2025. This indicates gradual growth in the asset base, demonstrating potential expansion or investment activities within the company.

Debt to assets ratio

The debt to assets ratio remains relatively stable throughout the period, fluctuating narrowly between 0.27 and 0.29. This stability suggests the company has maintained a consistent balance between its debt levels and total asset base. Minor variations reflect the changes in debt and asset amounts but do not indicate any significant shifts in financial leverage.

Total Debt (including operating lease liability)

The total debt exhibited a fluctuating pattern over the observed period. Starting at 35,611 million USD as of June 30, 2020, it decreased over the next two years to reach a low of 32,293 million USD by June 30, 2022. This was followed by an increase back up to 35,424 million USD by June 30, 2023, then another decline to 33,369 million USD by June 30, 2024. The most recent data shows a slight rise to 35,464 million USD by June 30, 2025, nearly returning to the initial level.

Total Assets

Total assets demonstrated a general upward trend throughout the period. Beginning at 120,700 million USD on June 30, 2020, the total assets slightly decreased to 117,208 million USD by June 30, 2022. Following this dip, total assets steadily increased year over year, ending at 125,231 million USD by June 30, 2025. This indicates an overall growth of approximately 3.77% over the six-year span.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio remained relatively stable throughout the period, fluctuating moderately between 0.27 and 0.3. It started at 0.30 in June 2020 and decreased to a low of 0.27 by June 2024, with minor variations in between. By June 2025, the ratio rose slightly to 0.28. This stability suggests consistent leverage management relative to the size of the asset base despite fluctuations in absolute debt levels.

Total assets

Total assets exhibited a generally stable trend over the analyzed period. Beginning at $120,700 million in mid-2020, the value declined slightly to a low point of $117,208 million by mid-2022. After that, total assets increased steadily to reach $125,231 million by mid-2025, reflecting a moderate asset growth in the latter years.

Shareholders’ equity attributable to Procter & Gamble

The shareholders’ equity showed a consistent upward trajectory throughout the period. Starting at $46,521 million in mid-2020, it remained relatively flat through mid-2023, with minor fluctuations. From mid-2023 onwards, equity increased more substantially, reaching $52,012 million by mid-2025, indicating strengthened equity position and potentially improved retained earnings or capital injections.

Financial leverage

Financial leverage ratios remained within a narrow range during the period. The ratio began at 2.59 in mid-2020, declined gradually to 2.52 in mid-2022, then experienced a slight increase to 2.58 by mid-2023. Subsequently, the ratio decreased again to 2.41 by mid-2025. This overall decreasing trend in financial leverage suggests a modest reduction in reliance on debt relative to equity over time, implying improving financial stability and lower financial risk.

Earnings before interest and tax (EBIT)

The EBIT shows a consistent upward trend over the six-year period, increasing from 16,299 million US dollars in mid-2020 to 21,074 million US dollars by mid-2025. This represents a steady improvement in operating profitability, with the most significant annual increments occurring between mid-2023 and mid-2025.

Interest expense

The interest expense fluctuates across the years with an initial slight increase from 465 million US dollars in 2020 to 502 million in 2021, followed by a decrease to 439 million in 2022. From 2023 onwards, the interest expense rises notably to peak at 925 million in 2024, before decreasing marginally to 907 million in 2025. This pattern suggests variability in borrowing costs or debt levels, with a marked increase in the later years.

Interest coverage ratio

The interest coverage ratio, indicating the firm's ability to cover interest obligations from EBIT, demonstrates a decline over the period. Starting from a robust 35.05 in 2020, the ratio peaks slightly at 41.99 in 2022, indicating strong coverage. However, it subsequently decreases sharply to 25.28 in 2023 and further to 21.28 in 2024, with a slight recovery to 23.23 in 2025. Despite the decline, the ratio remains at a level typically considered safe, reflecting good but reduced capacity to meet interest expenses relative to EBIT.

Overall analysis

The data indicates ongoing growth in operating profitability, as evidenced by rising EBIT figures. The simultaneous increase in interest expenses in the later years suggests increased debt or cost of debt, which has exerted downward pressure on the interest coverage ratio. While the declining coverage ratio highlights a reduction in the margin of safety for interest payments, the company still appears capable of comfortably meeting its interest obligations based on EBIT levels. Monitoring the trend of rising interest expenses and its impact on financial stability is advisable.

Earnings before fixed charges and tax

There is a clear upward trend in earnings before fixed charges and tax over the six-year period. The values increased consistently from 16,570 million US dollars in June 2020 to 21,350 million US dollars in June 2025. This indicates steady growth in operating profitability before accounting for fixed charges and taxes.

Fixed charges

Fixed charges show a moderate increase overall, rising from 1,069 million US dollars in June 2020 to 1,553 million US dollars in June 2025. The amounts remained relatively stable from 2020 to 2022 but increased more sharply from 2023 onward, suggesting rising obligations such as interest expenses or lease payments during the last three years.

Fixed charge coverage ratio

The fixed charge coverage ratio experienced fluctuations despite the growth in earnings. Starting at 15.5 in June 2020, it peaked at 18.38 in June 2022, implying a comfortable ability to cover fixed charges at that time. However, the ratio then declined over the next three years, reaching a low of 12.98 in June 2024 before a slight improvement to 13.75 in June 2025. This decrease is primarily due to the accelerated increase in fixed charges relative to earnings, indicating a reduced cushion for meeting fixed financial obligations in the most recent years.