The Procter & Gamble Company. The 2019 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 decreased from 2017 through 2019, while sales increased during the sale period. What would account for this?

b. P&G’s total assets decreased by approximately $3.2 billion from 2018 to 2019. 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 2018 to 2019. Did the $3.2 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 2019? How did P&G finance these cash outflows?

e. Compare P&G’s dividend payments to its net income in 2018 and 2019. (Note: 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)? Do you agree with this dividend payment policy? What message does this policy convey to investors about the company’s future growth potential