The financial statements of P&G are presented in Appendix B. The companys complete annual report, including the notes to the financial statements, is available online. Refer to P&Gs financial statements and the accompanying notes to answer the following questions. (d) What was P&Gs inventory turnover in 2014? What is its gross profit percentage? Evaluate P&Gs inventory turnover and its gross profit percentage.
Inventory Turn over _____________
Gross Profit Percentage 2014 _______________
Gross Profit Percentage 2013__________________
2014 2013 2012 $ 83,062 82,58 $ 82,006 41 411 25,984 1,576 13.035 769 NET SALES Cost of products sold Selling, general and administrative expense Goodwll and indefinite-lived intangible asset impairment charges OPERATING INCOMH Interest expense Interest income Other non-operating income, net EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES Income taxes on continuing operations NET EARNINGS FROM CONTINUING OPERATIONS NET EARNINGS FROM DISCONTINUED OPERATIONS NET EARNINGS Less: Net earnings attributable to noncontrolling interests NET EARNINGS ATTRIBUTABLE TO PROCTER &GAMBLE 41391 26552 308 14330 667 87 942 14,692 3391 11301 101 11402 90 42.460 25,314 15,288 709 100 206 14,885 3,178 11,707 78 11,785 142 185 12,528 3.378 9.150 1.754 10,904 148 $ 11,643 11312 10,756 BASIC NET EARNINGS PER COMMON SHARE Earnings from continuing operation Earnings from discontinued operations BASIC NET EARNINGS PER COMMON SHARE DILUTED NET EARNINGS PER COMMON SHARE Earnings from continuing operations Earnings from discontinued operations DILUTED NET EARNINGS PER COMMON SHARE DIVIDENDS PER COMMON SHARE S4.16 S 4.00 S3.18 0.64 0.04 0.03 4.04 4.19 3.82 $3.98 $3.83 $3.06 0.60 3.66 $ 2.45 $ 2.29 $2.14 0.03 4.01 0.03 3.86 Baic et earnings per common share and diluted net earnings per common share are calculated on net earnings attributable to Procter& Gamble Amounts in millions: June 30 Assets CURRENT ASSETS Cash and cash equivalents Available-for-sale investment securities Accounts receivable INVENTORIES 2014 2013 $8,558 S 5,947 2,128 6,386 6,508 1,742 Materials and supplies Work in process Finished goods 1,704 722 4.483 6,909 948 3,678 684 Total inventories Deferred income taxes Prepaid expenses and other current assets Assets held for sale TOTAL CURRENT ASSETS 6,759 1,092 3,845 2,849 31,617 23,990 21,666 55,188 31,572 6,847 $144,266 S 39,263 22,304 53,704 30,843 5,798 PROPERTY, PLANT AND EQUIPMENT, NET GOODWILL TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET OTHER NONCURRENT ASSETS TOTAL ASSETS Liabilities and Shareholders' Equit CURRENT LIABILITIES Accounts payable Accrued and other liabilities Liabilities held for sale Debt due within one year TOTAL CURRENT LIABILITIES LONG-TERM DEBT DEFERRED INCOME TAXES OTHER NONCURRENT LIABILITIES TOTAL LIABILITIES SHAREHOLDERS' EQUITY Convertible Class A preferred stock, stated value $1 per share (600 shares authorized) Non-Voting Class B preferred stock, stated value $1 per share (200 shares authorized) Common stock, stated value $1 per share (10,000 shares authorized; shares issued: 2014-4009.2,2013-4.009.2) Additional paid-in capital Reserve for ESOP debt retirement Accumulated other comprehensive income (loss) Treasury stock, at cost (shares held: 2014 - 1,298.4, 2013 - 1266.9) Retained earnings Noncontrolling interest TOTAL SHAREHOLDERS' EQUITY TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $8,461 S 8,777 8,999 660 15,606 33,726 19,811 10,218 10,535 74,290 12,432 30,037 10,827 10,579 70,554 4,009 63,911 (1,340) (7,662) (75,805) 84,990 762 69,976 4,009 63.538 (7,499) (71,966) 80,197 645 68,709 $144,266 S 139.263 for Accumulated Other Additional Common ESOP on- Debt Comprehensive Treasury Retained controlling Interest Shares Common Preferred Outstanding Stock Earnings Total Dollars in millions/Shares in thousands BALANCE JUNE 30, 2011 Net earnings Other comprehensive loss Dividends to shareholders: StockCapital Retirement Income/ (Loss) 2.765,737 S4,008 1234 S 62.,405 S (1357) $ (2,054) $ (67.278) $ 70,682 $ 361 S 68,00 10,756 148 10,904 (7279) (7.279) (5,883) (256) (5883) (256) (4,024) 2.215 Common Preferred, net of tax benefits (61 826) 39-546 4,576 (4,024) 1,665 Treasury purchases 550 mployee plan issuances Preferred stock conversions ESOP debt impacts Noncontrolling interest, net BALANCE JUNE 30, 2012 Net earnings Other comprehensive income Dividends to shareholders: 50 50 87 220 596 64,035 90 11402 1,834 2,748,033 4,008 ,195 63,18(1357) (9333)(69.604) 75349 11312 1,834 Common (6.275) (6.275) (244) (5,986) Preferred, net of tax benefits (84,234) 70,923 7,605 (5,986) Treasury purchases Employee plan issuances Preferred stock conversions ESOP debt impacts Noncontrolling interest, net BALANCE JUNE 30, 2013 Net earnings Other comprehensive loss Dividends to shareholders: 51 60 2,742327 4,009 ,137 63538 (1352) (7499) (71966) 80,197 11,643 645 68,709 142 11,785 (163) (163) (6,658) (253) Common Preferred, net of tax benefits (6,658) (6,005) 2,144 (74,987) 40,288 3,178 Treasury purchases Employee plan issuances Preferred stock conversions ESOP debt impacts Noncontrolling interest, net BALANCE JUNE 30, 2014 (6,005) 2,508 364 (26) (25) (20) 2,710,806 $ 4,009 $ 1,111 63,911 $ (1,340) (7,662) $ (75,805) $84,990 762 $69,976 2014 2013 $ 5,947 4436 $ 2.768 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR OPERATING ACTIVITIES Net earnings Depreciation and amortization Share-based compensation expense Deferred income taxes Gain on sale and purchase of businesses Goodwill and indefinite-lived 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 TOTAL OPERATING ACTIVITIES INVESTING ACTIVITIES Capital expenditures Proceeds from asset sales Acquisitions, net of cash acquired Purchases of available-for-sale investment securities Proceeds from sales of available-for-sale investment securities Change in other investments TOTAL INVESTING ACTIVITIES FINANCING ACTIVITIES Dividends to shareholders Change in short-term debt Additions to long-term debt Reductions of long-term debt Treasury stock purchases Impact of stock options and other TOTAL FINANCING ACTIVITIES EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS CHANGE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, END OF YEAR 11.785 11,402 2,982 346 (307) 10,904 3,204 360 (44) (2,106) 308 (427) (225) 1,253 68 (1,557) 331 13.958 (444) 14,873 13.284 (3,848) 570 (24) (568) (4,008) 584 (3,964) 2,893 (134) (1,605) (4,107) (6,295) (1,093) (6,911) 3,304 4,334 (4,095) (6,005) 2,094 7,279) (6,519) 3406 2331 (3,752) (5,986) 3,449 (7,071) (6,139) (3,412) 3,985 (2,549) (4,024) 1,729 (10,410) 1668 $8,558 $5,947$ 4,436 2,611 SUPPLEMENTAL DISCLOSURE Cash payments for: $ 686 $ 3,320 683 Interest 3,780 4348 Income taxes Assets acquired through non-cash capital leases are immaterial for all periods. 2014 2013 2012 $ 83,062 82,58 $ 82,006 41 411 25,984 1,576 13.035 769 NET SALES Cost of products sold Selling, general and administrative expense Goodwll and indefinite-lived intangible asset impairment charges OPERATING INCOMH Interest expense Interest income Other non-operating income, net EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES Income taxes on continuing operations NET EARNINGS FROM CONTINUING OPERATIONS NET EARNINGS FROM DISCONTINUED OPERATIONS NET EARNINGS Less: Net earnings attributable to noncontrolling interests NET EARNINGS ATTRIBUTABLE TO PROCTER &GAMBLE 41391 26552 308 14330 667 87 942 14,692 3391 11301 101 11402 90 42.460 25,314 15,288 709 100 206 14,885 3,178 11,707 78 11,785 142 185 12,528 3.378 9.150 1.754 10,904 148 $ 11,643 11312 10,756 BASIC NET EARNINGS PER COMMON SHARE Earnings from continuing operation Earnings from discontinued operations BASIC NET EARNINGS PER COMMON SHARE DILUTED NET EARNINGS PER COMMON SHARE Earnings from continuing operations Earnings from discontinued operations DILUTED NET EARNINGS PER COMMON SHARE DIVIDENDS PER COMMON SHARE S4.16 S 4.00 S3.18 0.64 0.04 0.03 4.04 4.19 3.82 $3.98 $3.83 $3.06 0.60 3.66 $ 2.45 $ 2.29 $2.14 0.03 4.01 0.03 3.86 Baic et earnings per common share and diluted net earnings per common share are calculated on net earnings attributable to Procter& Gamble Amounts in millions: June 30 Assets CURRENT ASSETS Cash and cash equivalents Available-for-sale investment securities Accounts receivable INVENTORIES 2014 2013 $8,558 S 5,947 2,128 6,386 6,508 1,742 Materials and supplies Work in process Finished goods 1,704 722 4.483 6,909 948 3,678 684 Total inventories Deferred income taxes Prepaid expenses and other current assets Assets held for sale TOTAL CURRENT ASSETS 6,759 1,092 3,845 2,849 31,617 23,990 21,666 55,188 31,572 6,847 $144,266 S 39,263 22,304 53,704 30,843 5,798 PROPERTY, PLANT AND EQUIPMENT, NET GOODWILL TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET OTHER NONCURRENT ASSETS TOTAL ASSETS Liabilities and Shareholders' Equit CURRENT LIABILITIES Accounts payable Accrued and other liabilities Liabilities held for sale Debt due within one year TOTAL CURRENT LIABILITIES LONG-TERM DEBT DEFERRED INCOME TAXES OTHER NONCURRENT LIABILITIES TOTAL LIABILITIES SHAREHOLDERS' EQUITY Convertible Class A preferred stock, stated value $1 per share (600 shares authorized) Non-Voting Class B preferred stock, stated value $1 per share (200 shares authorized) Common stock, stated value $1 per share (10,000 shares authorized; shares issued: 2014-4009.2,2013-4.009.2) Additional paid-in capital Reserve for ESOP debt retirement Accumulated other comprehensive income (loss) Treasury stock, at cost (shares held: 2014 - 1,298.4, 2013 - 1266.9) Retained earnings Noncontrolling interest TOTAL SHAREHOLDERS' EQUITY TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $8,461 S 8,777 8,999 660 15,606 33,726 19,811 10,218 10,535 74,290 12,432 30,037 10,827 10,579 70,554 4,009 63,911 (1,340) (7,662) (75,805) 84,990 762 69,976 4,009 63.538 (7,499) (71,966) 80,197 645 68,709 $144,266 S 139.263 for Accumulated Other Additional Common ESOP on- Debt Comprehensive Treasury Retained controlling Interest Shares Common Preferred Outstanding Stock Earnings Total Dollars in millions/Shares in thousands BALANCE JUNE 30, 2011 Net earnings Other comprehensive loss Dividends to shareholders: StockCapital Retirement Income/ (Loss) 2.765,737 S4,008 1234 S 62.,405 S (1357) $ (2,054) $ (67.278) $ 70,682 $ 361 S 68,00 10,756 148 10,904 (7279) (7.279) (5,883) (256) (5883) (256) (4,024) 2.215 Common Preferred, net of tax benefits (61 826) 39-546 4,576 (4,024) 1,665 Treasury purchases 550 mployee plan issuances Preferred stock conversions ESOP debt impacts Noncontrolling interest, net BALANCE JUNE 30, 2012 Net earnings Other comprehensive income Dividends to shareholders: 50 50 87 220 596 64,035 90 11402 1,834 2,748,033 4,008 ,195 63,18(1357) (9333)(69.604) 75349 11312 1,834 Common (6.275) (6.275) (244) (5,986) Preferred, net of tax benefits (84,234) 70,923 7,605 (5,986) Treasury purchases Employee plan issuances Preferred stock conversions ESOP debt impacts Noncontrolling interest, net BALANCE JUNE 30, 2013 Net earnings Other comprehensive loss Dividends to shareholders: 51 60 2,742327 4,009 ,137 63538 (1352) (7499) (71966) 80,197 11,643 645 68,709 142 11,785 (163) (163) (6,658) (253) Common Preferred, net of tax benefits (6,658) (6,005) 2,144 (74,987) 40,288 3,178 Treasury purchases Employee plan issuances Preferred stock conversions ESOP debt impacts Noncontrolling interest, net BALANCE JUNE 30, 2014 (6,005) 2,508 364 (26) (25) (20) 2,710,806 $ 4,009 $ 1,111 63,911 $ (1,340) (7,662) $ (75,805) $84,990 762 $69,976 2014 2013 $ 5,947 4436 $ 2.768 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR OPERATING ACTIVITIES Net earnings Depreciation and amortization Share-based compensation expense Deferred income taxes Gain on sale and purchase of businesses Goodwill and indefinite-lived 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 TOTAL OPERATING ACTIVITIES INVESTING ACTIVITIES Capital expenditures Proceeds from asset sales Acquisitions, net of cash acquired Purchases of available-for-sale investment securities Proceeds from sales of available-for-sale investment securities Change in other investments TOTAL INVESTING ACTIVITIES FINANCING ACTIVITIES Dividends to shareholders Change in short-term debt Additions to long-term debt Reductions of long-term debt Treasury stock purchases Impact of stock options and other TOTAL FINANCING ACTIVITIES EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS CHANGE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, END OF YEAR 11.785 11,402 2,982 346 (307) 10,904 3,204 360 (44) (2,106) 308 (427) (225) 1,253 68 (1,557) 331 13.958 (444) 14,873 13.284 (3,848) 570 (24) (568) (4,008) 584 (3,964) 2,893 (134) (1,605) (4,107) (6,295) (1,093) (6,911) 3,304 4,334 (4,095) (6,005) 2,094 7,279) (6,519) 3406 2331 (3,752) (5,986) 3,449 (7,071) (6,139) (3,412) 3,985 (2,549) (4,024) 1,729 (10,410) 1668 $8,558 $5,947$ 4,436 2,611 SUPPLEMENTAL DISCLOSURE Cash payments for: $ 686 $ 3,320 683 Interest 3,780 4348 Income taxes Assets acquired through non-cash capital leases are immaterial for all periods
