Price to FCFE (P/FCFE)
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Procter & Gamble Co. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Debt to Equity since 2005
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Free Cash Flow to Equity (FCFE)
Procter & Gamble Co., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
The analysis of the financial data over the six-year period reveals several noteworthy trends in cash flow activities.
- Operating Activities
- The cash generated from operating activities demonstrated an overall upward trend from 2019 to 2024. Starting at $15,242 million in 2019, this figure increased steadily, reaching a peak of $19,846 million in 2024. Some fluctuations are evident, with a slight decrease observed in 2022 and 2023 compared to 2021, but the overall direction remained positive, indicating improved operational efficiency or increased revenue generation over the period.
- Free Cash Flow to Equity (FCFE)
- The Free Cash Flow to Equity showed more volatility throughout the examined years. Beginning at $11,078 million in 2019, it experienced a substantial increase in 2020 to $19,179 million, followed by a significant decline in 2021 to $11,681 million. Afterward, FCFE rose again in 2022 and 2023, reaching $15,459 million and $16,723 million respectively, before dropping to $14,082 million in 2024. Despite these fluctuations, FCFE levels remained generally robust, reflecting the company's capacity to generate cash available to shareholders, albeit with some variability potentially linked to investment activities, debt servicing, or changes in working capital.
In summary, the operational cash flow exhibited a solid upward trend, suggesting strengthening core business performance. The free cash flow to equity, while remaining positive and healthy, showed greater instability, which could warrant further analysis to identify underlying causes such as capital expenditure patterns, financing decisions, or changes in cash management strategies.
Price to FCFE Ratio, Current
Procter & Gamble Co., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | |
| FCFE per share | |
| Current share price (P) | |
| Valuation Ratio | |
| P/FCFE | |
| Benchmarks | |
| P/FCFE, Industry | |
| Consumer Staples | |
Based on: 10-K (reporting date: 2024-06-30).
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Procter & Gamble Co., historical P/FCFE calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 Data adjusted for splits and stock dividends.
3 2024 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =
4 Closing price as at the filing date of Procter & Gamble Co. Annual Report.
5 2024 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =
- Share Price Trend
- The share price of the company demonstrates a consistent upward trajectory over the analyzed period from June 2019 to June 2024. Starting at $114.28, the price increased steadily each year, reaching $168.06 by June 2024. This represents a compound increase, indicating sustained investor confidence and perceived growth prospects.
- FCFE per Share Analysis
- Free Cash Flow to Equity (FCFE) per share shows fluctuations within the timeframe. Initially, there was a significant increase from $4.43 in mid-2019 to $7.71 in mid-2020. Subsequently, FCFE declined to $4.81 in mid-2021, recovered to $7.09 by mid-2023, and then decreased slightly to $5.98 by mid-2024. This variation suggests volatility in the firm’s free cash flows available to equity shareholders, with no clear monotonic trend.
- P/FCFE Ratio Insights
- The Price to Free Cash Flow to Equity (P/FCFE) ratio exhibits variability over the period. The ratio decreased sharply from 25.81 in 2019 to 17.2 in 2020, corresponding with the spike in FCFE per share, indicating a potentially stronger valuation due to improved cash flows. It then rose to 29.39 in 2021, followed by a decline to around 21.89 in 2023 before increasing again to 28.09 in 2024. These fluctuations reflect changing market perceptions relative to the company’s free cash flows, suggesting periods of both premium and discount valuation relative to FCFE.
- Overall Observations
- While the share price shows a clear positive trend, FCFE per share and P/FCFE ratio highlight underlying variability in free cash flow generation and market valuation metrics. The increase in share price despite FCFE volatility may indicate that market expectations incorporate additional factors beyond immediate cash flow performance. The variations in P/FCFE ratio further suggest that investor sentiment and valuation multiples are influenced by broader market conditions and company performance dynamics.