Source: P&G. Year Ending June 30, 2017 Total Revenue 65,058 June 30, 2016 June 30, 2015 65,299 70,749 Operating Income 13,955 13,441 11,049 EBIT 13,257 13,369 11,012 Net Income 15,411 10,604 7,144 EXHIBIT 2 Balance Sheet (in millions of $) Year Ending June 30, 2017 June 30, 2016 June 30, 2015 Current Assets 26,494 33,782 29,646 Total Assets 120,406 127,136 129,495 Current Liabilities 30,210 30,770 29,790 Total Liabilities 64,628 69,153 66,445 Stockholder Equity 55,778 57,983 63,050 EXHIBIT 4 Business Segments, 2016 Reportable Segments % of Not % of Net Sales Product Categories (Sub- Earnings Categories) Major Brands Hair Care (Conditioner. Beauty 18% 20% Grooming 11% 15% Health Care 11% 12% Fabric & 32% 27% Home Care Shampoo, Styling Aids, Treatments) Skin and Personal Care (Antiperspirant and Deodorant, Personal Cleansing, Skin Care) Grooming (Shave Care - Female Blades & Razors, Male Blades & Razors, Pre- and Post-Shave Products, Other Shave Care; Appliances) Oral Care (Toothbrushes, Toothpaste, Other Oral Care) Personal Health Care (Gastrointestinal, Rapid Diagnostics, Respiratory. Vitamins/Minerals /Supplements, Other Personal Health Care) Fabric Care (Fabric Enhancers, Laundry Additives, Laundry Detergents) Home Care (Air Care, Dish Care, P&G Professional, Head & Shoulders, Pantene, Rejoice Olay, Old Spice, Safeguard, SK-II Braun, Fusion, Gillette, Mach3, Prestobarba, Venus Crest, Oral-B Prilosec, Vicks Ariel, Downy, Gain, Tide Cascade, Dawn, Febreze, Mr. Surface Care) Clean, Swiffer Baby Care (Baby Wipes. Luvs, Pampers Diapers, and Pants) Feminine Care (Adult Always, Tampax Baby, Incontinence, Feminine & 28% 26% Feminine Care) Family Care Family Care (Paper Towels, Bounty, Charmin Tissues, Toilet Paper) Part 1: Key Financial Ratios 1. Using available data in the case, calculate the requested financial ratios. Round all numbers to the nearest hundredth. For example, answers should look like -0.05 or 1.33. Net Income to Total revenue 2017 23.69 % 2016 16.24 % 2015 10.10 % EBIT to Total Revenue 20.38 % 20.47 % 15.56% Current ratio 0.88% 1.10% 1.00 % Total Liabilities to Total Assets 54.68 54.39 51.31 Shareholder's Equity to Total Assets 46.32 % 45.61% 48.69 % Part 2: Annual Growth Activity Exhibit 1, 2, and 4 in the case provide performance information for P&G for the years 2015 through 2017. For each item listed below, calculate the rate of annual growth (or decline) from 2015 to 2016 and for 2016 to 2017. All calculations should be rounded to one decimal (e.g., 12.7%) 2016-2017 2015-2016 Revenue Operating Income Net Income % % % % % % Total Assets % % Total Liabilities % % Total Stockholder Equity % % Part 3: Questions Based on the case and previous calculations, please answer the following short answer questions. Note: Your instructor will need to manually grade these questions. 1. Refer to Exhibit 4 (Financial Breakdown). What were the largest and smallest divisions by net sales in 2017? Identify the one most important division in terms of the proportionate net earnings for the company. 2. Based on the financials presented in Exhibits 1 and 2, how would you describe P&G's financial position in the years 2016 and 2017? Do you think the company ought to make any major changes to improve its financial outlook? What changes would you suggest?