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Answered 3 days AfterApr 29, 2024

Answer To: 5-7 sentences per responses. Around 400 words total.

Sandeep answered on May 03 2024
16 Votes
For this discussion, I've chosen to analyse the financial status Procter & Gamble (P&G) for the fiscal year 2023, I accessed their annual report. You can find the annual report for 2023 https://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_PG_2023.pdf
Profitability: P&G demonstrates strong profitability, with consistently high gross profit margins, averaging around 50% over the past few years. The net profit margins have also remained impressive, indicating efficient cost management and healthy profitability.
Liquidity: P&G maintains a strong liquidity position. With a current ratio of 0.88 and a quick ratio of 0.60, the company has enough current assets to cover its short-term liabilities. However, the current ratio being less than 1 suggests that P&G may need to improve its short-term liquidity position.
Efficiency: P&G exhibits efficient asset management. The asset turnover ratio, which measures the company's ability to generate sales from its assets, stands at around 0.78, indicating that P&G generates approximately $0.78 in sales for every $1 in assets.
Financial Leverage: P&G maintains a conservative level of financial leverage. With a debt-to-equity ratio of 0.52, the company relies more on equity financing than debt financing, which is a positive sign of financial stability.
In conclusion, based on the PICK analysis, Procter & Gamble is in a strong financial position, with high profitability, relatively solid liquidity, efficient asset management, and a conservative level of financial leverage. However, there is room for improvement in the liquidity position, as indicated by the current ratio being less than 1.
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