QUESTION 2

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Interpreting Foreign Translation Disclosure Procter & Gamble Company reports the following table in its 10-K report relating to the change in sales from 2015 to 2016.

Net Sales Change Drivers 2016 vs. 2015
	Volume	Foreign Exchange	Price	Mix	Net Sales Growth
Beauty	(7)%	(8)%	2%	--	(11)%
Grooming	(2)%	(11)%	5%	(2)%	(10)%
Health care	(2)%	(8)%	2%	1%	(7)%
Fabric & home care	(1)%	(8)%	--	--	(9)%
Baby, feminine & family care	(3)%	(8)%	--	--	(11)%
Total company	(3)%	(8)%	1%	--	(10)%

a. Did total company net sales increase or decrease during the year? AnswerIncreaseDecrease

By what percentage did net sales increase (or decrease)?

Answer

% b. What was the effect of foreign exchange rates on sales during the year?

Foreign exchange rates caused sales to Answerdecreaseincrease

by Answer

%.

From this result, what can we infer about the relative strength of the $US during the period?

During the year,

the U.S. dollar strengthened vis--vis the currencies in which P&G does business.

the U.S. dollar weakened vis--vis the currencies in which P&G does business.

1.00 points out of 1.00

c. The Beauty and the Baby, Feminine & Family Care segment sales both decreased by 11%. From this result, can we conclude that the dollar decrease in sales was the same for both segments?

Yes, since both segments' sales decreased by the same percentage, the dollar amounts in sales were the same.

No, the decrease is relative to each segment's sales. Both segments could have different sales levels but the same percentage change.