P&G Financial Ratio Analysis

Liquidity proportions measure the connections short-run energy to pay its maturing obligations. While analyzing the liquidity proportions for Procter & Gamble and the diligence poesy NAICS 325611, we build considerable differences. For 2009, the real symmetry for P & G was .71 compared to the industry ratio of 1.4. This means that for every $ 1 that P & G has in veritable liabilities, it has $.79 in current assets. Since current ratio is a measure of short- bound liquidity, this is not trade for short-term creditors. This might be due to excessive inventory. The pairing see a decreasing trend from 2008 to 2009. The quick ratio for P & G for 2009 was .49 while the industry ratio was .7. This shows us that the ratios of the company and industry come much closer when inventory, which is relatively illiquid, is subtracted from current assets so it shows that one reason P & G is experiencing busted liquidity is the amount of inventory held. The cash ratio for P & G in 20 09 was .15 while in 2008 it was .11, so the company experienced a significant increase of 36%, a very good sign for short term creditors. leverage ratios measure the firms long-run competency to fill its obligations. The total debt ratio for the company in 2009 was .53, upshot matter they shed about $ .

53 of debt for every sawbuck in assets, which is not further as there is to a greater extent percentage of debt, and the company experienced a decreasing trend from the .52 ratio of 2008. However, the industry average is. The neat structure of this industry determines if these ratios are too proud or too low. The debt-equity ratio for the company in 20! 09 was 1.14, a fair(a) increase from 2008 which was 1.07. Since the ratio is greater than 1, the debt is greater than the stockholders equity, meaning the volume of the assets are financed through debt so it isnt attractive for investors as it is riskier to invest. ---- Yet another indicator that the company is relying more on debt to finance its asset base is their equity...If you want to involve a full essay, order it on our website: OrderCustomPaper.com

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