P&G Financial Ratio Analysis

Liquidity proportions flyer the partnerships short-run skill to pay its maturing obligations. While analyzing the liquidity balances for Procter & Gamble and the diligence get along NAICS 325611, we build considerable differences. For 2009, the realistic proportionality for P & G was .71 comp ared to the sedulousness ratio of 1.4. This center that for every $ 1 that P & G has in menstruation liabilities, it has $.79 in underway assets. Since current ratio is a measure of short- terminal liquidity, this is not dodge for short-term creditors. This might be due to excessive inventory. The conjunction see a decrease trend from 2008 to 2009. The quick ratio for P & G for 2009 was .49 date the industry ratio was .7. This shows us that the ratios of the caller and industry stick with much closer when inventory, which is relatively illiquid, is subtracted from current assets so it shows that bingle reason P & G is experiencing busted liquidity is the amount of inventory held. The cash ratio for P & G in 2009 was .15 while in 2008 it was .11, so the political party experienced a significant make up of 36%, a very heavy sign for short term creditors. leverage ratios measure the firmlys long-run baron to fill its obligations. The total debt ratio for the company in 2009 was .53, opened matter they shed most $ .

53 of debt for every dollar in assets, which is not further as there is to a great extent percentage of debt, and the company experienced a change magnitude trend from the .52 ratio of 2008. However, the industry average is. The capital coordinate of this industry determines if these ratios are excessively proud or similarly low. The debt-equity ratio for the company in 2009 was 1.14, a fair increase from 2008 which was 1.07. Since the ratio is great than 1, the debt is greater than the stockholders equity, meaning the majority of the assets are financed through debt so it isnt attractive for investors as it is riskier to invest. ---- only another indicator that the company is relying more on debt to finance its asset base is their equity...If you pauperism to involve a salutary essay, order it on our website: Ordercustompaper.com

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