ACC 101

ACC 101 Financial Accounting

Name of Company:  The Procter & Gamble Company

Please go to the home page for The Procter & Gamble Company. (www.pg.com). At the top of the page you will see a link to “Investor/Shareholder Relations”.  Click this link.  NOTE the current stock price to the right; you will need this information for the case.  In the middle of the page, click on the link in the 2012 Annual Report box with this link: “View the P&G 2012 Annual Report.  Then click “Download the 2012 Annual Report”.  The report is 92 pages.  You will NOT need to print out the entire report. Please scroll through the report and print out ONLY the following .pdf page numbers:

Consolidated Statements of Earnings (another name for the Income Statement) – page 49; Consolidated Balance Sheets – page 50;

Consolidated Statements of Shareholders’ Equity – page 51;

Consolidated Statements of Cash Flows – page 52.

Use the information contained in these financial statements to complete this case.  All answers should be for the most current year ONLY unless asked otherwise.  Many companies show amounts in the thousands or millions – please state amounts as shown on the financial statements.  Do not add zeros. You do not need to include dollar signs.

I. Balance Sheet

1.   What is the amount of Accounts Receivable?

2. What is the net amount of Property, Plant and Equipment?

3. What is the amount of Current Assets?

4.  Does the company have any intangible assets?  If yes, name the type and amount.

Type: Goodwill

Trademarks and other intangible assets, net

Total intangible assets, net

5. What is the amount of current portion of long-term debt? (Debt due within one year)

6. What is the amount of total current liabilities?

7. What is the amount of long-term debt?

8. What is the total amount of all long-term liabilities?

9. Does the company have Preferred Stock (yes or no)?  If yes, give the number of shares authorized and the par (stated) value.

Convertible Class A: Par, $1 per share; 600 shares authorized

Non-Voting Class B: Par, $1 per share; 200 shares authorized

10 Answer the following questions regarding Common Stock:

a. Number of shares authorized.

 b. Number of shares issued.

 c. Par or stated value per share.

 d. What is the total dollar amount of common stock?

11. What is the amount of Additional paid-in capital?

12. What is the amount of Retained Earnings?

13. What is the amount of Total Stockholders’ Equity?

14 What is the amount of Total Liabilities and Stockholders’ Equity?

15. Does Total Assets = Total Liabilities + Stockholders’ Equity?

16. What is the current market price of the stock? This is not in the report.  It is noted on the website or go finance.yahoo.com to get the quote. The ticker symbol for The Procter & Gamble Company is PG.

Date found: 12/5/2012

II. Income Statement

1. What is the total net revenue (sales) for the current year?

2.  What is the cost of merchandise sold?

3.  Calculate gross profit (margin).

4. What is the amount of depreciation/amortization for the current year? (See Statement of Cash Flows.)

5. What is the amount of selling, general and administrative expense?

6. What is the amount of net income (loss) for the current year?  (Note:  may be referred to as net earnings (loss))

7. What is the dollar amount that net income (loss) has increased or (decreased) from the previous year?

8. What is the amount of basic net earnings per share for the current year?

III. Statement of Shareholders’ Equity

1. Describe the changes to retained earnings for the year. (Note: the information is contained in columnar form, read down the column marked Retained Earnings to obtain the information.)

Describe the items included in “Other”: ESOP debt impacts

Ending Retained Earnings

IV. Statement of Cash Flows

1. For the current and previous years, place the appropriate dollar amount of cash provided by (used in) each activity.

Operating Activities

Investing Activities

Financing Activities

Effect of Exchange Rate

2. What is the amount of increase (decrease) in cash (net change) for each year:

3. What do you think is the major reason for the change in cash for the current year only?

V. Financial Analysis – Show your work for all ratios to receive partial credit! Calculate each ratio to three decimal places.

1. Chapter 3 (pages 119, 575)

a. Calculate the Current ratio.  Does this ratio appear favorable or unfavorable?  Why?

b. Calculate the Profit Margin ratio. Does this ratio appear favorable or unfavorable?  Why?

2. Chapters 6 and 7 (pages 269, 309, 575)

a. Calculate the Accounts Receivable Turnover ratio.

 

b. Calculate the Days’ Sales Uncollected ratio.  Does this ratio appear favorable or unfavorable?  Why?

3. Chapter 8 (pages 347, 575)

a. Calculate the Total Asset Turnover ratio.

4. Chapter 2 (pages 72, 575)

a. Calculate the Debt ratio. Does this ratio appear favorable or unfavorable?  Why?

5. Chapter 10 (pages 429, 575)

a. Calculate the Debt-to-Equity Ratio.  Does this ratio appear favorable or unfavorable?  Why?

6. Chapter 11 (pages 477, 478, 575)

a. Calculate the Dividend Yield.  The dividend per share of common stock is $2.14.

b. Calculate the Price-Earnings Ratio. Does this ratio appear favorable or unfavorable?  Why?

7. Chapter 5 (page 219, 575)

a. Calculate the Inventory Turnover ratio.

VI. Summary

If your superior asks you to analyze this company’s financial condition, would you recommend it as a worthy investment (yes or no)?  Support your opinion using answers from parts I, II, III, IV and V of your report and data from the financial statements.