Calculate the company's debt to total assets ratio (also called total debt ratio) for both the recent year and the prior year. Show your computations. Write the textbook formula here: Recent year: Prior year: Explain what information this ratio provides (define), and what the results mean to this company. Use complete sentences and your own words. Compare the two, has the ratio improved? The Procter& Gamble Company 37 Consolidated Statements of Earnings 2018 2017 2016 NET SALES S 66,832 S 65,058 S 65,299 34,268 32,535 32,909 18,853 18,568 18,949 13,441 579 Cost of products sold Selling, general and administrative expense OPERATING INCOME 13.711 13,955 465 Interest expense Interest income Other non-operating income/(expense), net 506 247 (126) 13.326 3,465 9,861 325 13,369 3,342 10,027 577 10,604 96 9,750 S 15,326 S 10,508 (404) 13,257 3,063 10,194 5,217 15.411 85 EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES Income taxes on continuing operations NET EARNINGS FROM CONTINUING OPERATIONS NET EARNINGS FROM DISCONTINUED OPERATIONS NET EARNINGS 9,861 Less: Net earnings attributable to noncontrolling interests NET EARNINGS ATTRIBUTABLE TO PROCTER&GAMBLE BASIC NET EARNINGS PER COMMON SHARE: Earnings from continuing operations Earnings from discontinued operations S 3.75 $ 3.79 3.59 0.21 S 3.75 S5.80 S 3.80 2.01 BASIC NET EARNINGS PER COMMON SHARE DILUTED NET EARNINGS PER COMMON SHARE: S 3.67 $3.69 3.49 0.20 S 3.67 S 5.59 S 3.69 S 2.79 2.70 2.66 Basic net earnings per common share and Diluted net earnings per common share are calculated on Net earnings attributable to Procter& Earnings from continuing operations Earnings from discontinued operations 1.90 DILUTED NET EARNINGS PER COMMON SHARE DIVIDENDS PER COMMON SHARE Gamble 8 The Procter& Gamble Company Consolidated Statements of Comprehensive Income 2018 2017 2016 NET EARNINGS S 9,861 S15,411 S 10,604 OTHER COMPREHENSIVE INCOME/(LOSS), NET OFTAX Financial statement foreign currency translation Unrealized gains/(losses) on hedges (net of S(279), S(186) and S5 tax, respectively) Unrealized gains/(losses) on investment securities (net of SO, S(6) and $7 tax, respectively) Unrealized gains/(losses) on defined benefit retirement plans (net of S68, $551 and S(621) tax, respectively) 239 (306) (1,679) (299) (59) 1.401 1:75 16,686 85 (148) 28 (1,477) (3,127) 334 (119) 9.742 109 TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX TOTAL COMPREHENSIVE INCOME 477 Less: Total l comprehensive income attributable to noncontrolling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO PROCTER&GAMBLE 9.633 16,601 7.381 The Procter& Gamble Company 39 Consolidated Balance Sheets Assets CURRENT ASSETS Cash and cash equivalents Available-for-sale investment securities Accounts receivable INVENTORIES S 2,569 S 5,569 9,568 4,594 9.281 4,686 Materials and supplies 1,308 529 2,787 4,624 2,139 26,494 19,893 44,699 24,187 5,133 S 118,310 120,406 1.335 588 2,815 4,738 2,046 23.320 20.600 45,175 23,902 5,313 Work in process Finished goods Total inventories Prepaid expenses and other current assets TOTAL CURRENT ASSETS PROPERTY, PLANTAND EQUIPMENT, NET GOODWILL TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET OTHER NONCURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Accounts payable S 10.344 S9,632 7,024 13,554 30,210 18,038 8,126 Accrued and other liabilities Debt due within one year TOTAL CURRENT LIABILITIES LONG-TERM DEBT DEFERRED INCOME TAXES OTHER NONCURRENT LIABILITIES TOTAL LIABILITIES SHAREHOLDERS EQUITY 7.470 0.423 28.237 20,863 6.163 10.164 65,427 64.628 Convertible Class A preferred stock, stated value S1 per share (600 shares authorized) Non-Voting Class B preferred stock, stated value S1 per share (200 shares authorized) Common stock, stated value SI per share (10,000 shares authorized; shares issued: 967 1,006 2018-4,009.2, 2017-4,009.2) Additional paid-in capital Reserve for ESOP debt retirement 4,009 63,641 (1,249) (14,749 (14,632) 99,217) 93,715) 96,124 594 5,778 S 118,310 S20,406 4,009 63,846 (1,204) Treasury stock, at cost (shares held: Retained earnings Noncontrolling interest 2018-1,511.2, 2017-1,455.9) 98,641 590 52,883 TOTAL SHAREHOLDERS' EQUITY TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 40 The Procter&Gamble Company Consolidated Statements of Shareholders' Equity Commen Seeck tienal Reserveor rehensive Piederred Paid-ln EsoFbt Inceme Treasury Retained controlling belders Stock Earnings Interest Equity Share Ameut Stock Capital Retirement BALANCE JUNE 30, 2015 Net earning Other comprehensive loss Dividends and dividand 2,714,571 $4,009 $1,077 s63852 ($1.320) ($12,780) (577,226) s84,807 96 10,604 (3,127) (3,127) 7,181) 255) 7,181 Common Preferred, net of tax benetits Treasary stock purchases Employee stock plans Preferred slock conversioes ESOP debt impacts Noncontrolling interest, net BALANCE JUNE 30, 2016 2,668074 Net carning Other comprehensive loss Dividends and dividend equivalerts 8,217) (8,217) 52,089 (144) (39) (85) (85) $4,009 $1,038 563,714 (S1,290) (S13,907) (S82,176) 587953 $642 $57,983 5 15,411 (6,989) 6,989) 247) Preferred. net of tax beneits Treasary stock purchases Employee stock plans Preferred stock conversions ESOP debt impacts Noncontsolling interest, net BALANCE JUNE 30, 2017 Net earnings Other comprehensive loss Dividends and dividand (14,625) 3,058 (14,625) 2,981 45,848 4.241 122 (133) (133) 594 S55,778 111 9,861 2,553297 $4,009 $1,006 563641 ($1 249) (S14,632) ($93,715) $96,124 9.750 (117 7,057 7,057 Common Preferred, net of tax benefits Treasury stock purchase Employee stock plans Preferred stock conversions ESOP debe impacts (7,004) (7,004) 21,655 199 134 113) (113) BALANCE JUNE 30. 2018 2.498,093 54,009 S967 S63.846 (S1.204) (514,749) (S99217) $98,641 S990 S52.883 Inclales 54,213 of treasury shares acquired in the divestiture of the Batteries business (see Note 13) Includes $9,421 of treasury shares received as part of the share exchange in the Beauty Brands transaction (see Note 13). The Procter & Gamble Company41 Consolidated Statements of Cash Flows 2018 2017 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR OPERATING ACTIVITIES S 5569 7,102 S 6836 9362820 Net eamings Depreciation and amortization Loss on early extinguishment of debt 15.411 3,078 543 351 (601) 335 (815) (41) Deferred income taxes Gain on sale of assets Goodwill and intangible asset impairment charges Change in accounts receivable Change in inventories Change in accounts payable, accrued and other liabilities Change in other operating assets and liabilities Other (176) (177) (188) 1385 322) 71 149 35 116 184 12,753 15435 TOTAL OPERATING ACTIVITIES INVESTING ACTIVITIES 14,867 (3,717) ,384) 3,314) 432 (186) (2815) Capital expenditures Proceeds from asset sales Acquisitions, net of cash acquired Purchases of short-term investments Proceeds from sales and maturities of short-term investments Pre-divestiture addition of restricted cash related to the Beauty Brands divestiture Cash transferred at closing related to the Beauty Brands divestiture Release of restricted cash upon closing of the Beauty Brands divestiture Cash transferred in Batteries divestiture Change in other investments 71 (16) 4.843) (3,909) 874) 1870 TOTALINVESTING ACTIVITIES FINANCING ACTIVITIES 3511) (7.310) (7236) 2,727 7.436) (418) 3,916 2.213) Change in short-term debt Additions to long-term debt Reductions of long-term debt Treasury stock purchases Treasury stock from cash infused in Batteries divestiture Impact of stock options and other 5,072 4.931) (5,204) (7,004) (1,730) 2.672 2.473 1,177 (14.375) TOTALFINANCING ACTIVITIES EFFECT OF EXCHANGE RATE CHANGES ON CASHAND CASH EQUIVALENTS CHANGE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, END OF YEAR 381 S 256 57,102 SUPPLEMENTAL DISCLOSURE Cash payments for interest Cash payment for income taxes Divestiture of Batteries business in exchange for shares of P&G stock Divestiture of Beauty business in exchange for shares of P&G stock and assumption of debt Assets acquired through non-cash captal leases are immaterial for all periods. th Includes carly extinguishment of debt costs of $346 and $543 in 2018 and 2017, respectively en Includes $1,730 from cash mfused mo the Batteries business pursuant to e divestiture agreement (see Note 13). S 529 518 S569 3,730 213 3,714