The 2015 annual report of The Procter & Gamble Company (P&G) is available at www.pginvestor.com. After reviewing P&G’s annual report, respond to the following questions:

a. P&G’s net income and net sales both decreased from 2013 through 2015. Which declined at a faster rate?
What do your calculations say about the cost controls at P&G?

b. P&G's total assets decreased by approximately \($14.771\) billion from 2014 to 2015. Which assets principally accounted for this decline? (To answer this question, calculate each asset as a percentage of total assets and then compare between years.) Is this decline a problem? If so, why? If not, why not?

c. Consider the change in P&G’s total debt and total shareholders’ equity from 2014 to 2015. Did the \($14.771\) billion decrease in its assets have an impact on debt? What was the impact on shareholders’
equity? Calculate P&G’s long-term debt-to-equity ratio and total debt to total assets ratio for both years as part of your analysis. What can you say about P&G’s apparent financing strategy?

d. Consider P&G’s statement of cash flow. What were the five major cash outflows for the company in 2015? How did P&G finance these cash outflows?

e. Compare P&G’s dividend payments to its net income in 2014 and 2015. (The ratio of dividends paid divided by net income is called the dividend payout ratio.) What percentage of net income does P&G pay to its shareholders? How does this payout percentage compare to P&G’s competitors (such as Johnson & Johnson, Kimberly-Clark Corporation)? Do you agree with this dividend payment policy?
What message does this policy convey to investors about the company’s future growth potential?