Procter & Gamble Company (PG)
Profitability ratios
Return on sales
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 20.88% | 21.31% | 21.51% | 22.78% | 20.53% |
| Operating profit margin | 22.07% | 22.11% | 22.21% | 23.63% | 22.14% |
| Pretax margin | 22.21% | 22.28% | 22.38% | 23.08% | 22.21% |
| Net profit margin | 17.70% | 17.87% | 18.38% | 18.79% | 18.36% |
Procter & Gamble Company's profitability ratios have shown a slight decline over the past five years. The gross profit margin, which measures the profitability of core operations, decreased from 22.78% in 2021 to 20.88% in 2024, indicating a decrease in the company's ability to generate profits from sales after deducting the cost of goods sold.
Similarly, the operating profit margin, which gauges the efficiency of the company's operating activities, remained relatively stable around the low 20% range, showing a slight decrease from 23.63% in 2021 to 22.07% in 2024. This suggests that Procter & Gamble has been facing challenges in controlling its operating expenses relative to revenue.
The pretax margin, representing the proportion of profit before taxes to total revenue, has also been on a downward trend, declining from 23.08% in 2021 to 22.21% in 2024. This indicates that the company's profitability before accounting for taxes has been under pressure in recent years.
Lastly, the net profit margin, which reveals how much of each dollar of revenue translates into profit after all expenses have been deducted, decreased from 18.79% in 2021 to 17.70% in 2024. This decline suggests that Procter & Gamble's overall profitability has been decreasing, which could be attributed to various factors such as increased competition, rising costs, or changes in consumer preferences.
Overall, the declining trend in Procter & Gamble's profitability ratios signifies a potential need for the company to implement strategic measures to enhance its efficiency, streamline operations, and drive higher profitability in the future.
Return on investment
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 15.15% | 15.01% | 15.20% | 15.08% | 13.01% |
| Return on assets (ROA) | 12.16% | 12.13% | 12.58% | 11.99% | 10.79% |
| Return on total capital | 24.46% | 26.63% | 26.37% | 25.91% | 23.04% |
| Return on equity (ROE) | 29.43% | 31.13% | 31.46% | 30.66% | 27.79% |
Procter & Gamble Company has shown consistent profitability over the past five years as evidenced by its key profitability ratios.
- Operating return on assets (Operating ROA) has been relatively stable, ranging from 13.01% in 2020 to 15.20% in 2022. The company achieved a solid Operating ROA of 15.15% in 2024, indicating that it is effectively generating operating profits relative to its total assets.
- Return on assets (ROA) has also exhibited a positive trend, increasing from 10.79% in 2020 to 12.16% in 2024. This suggests that P&G has been successful in generating profits from its assets, with a higher return in 2024 compared to the previous years.
- Return on total capital has shown some fluctuations, with a peak of 26.63% in 2023 and a slight decrease to 24.46% in 2024. This ratio indicates the company's ability to generate returns from its total invested capital, including both debt and equity.
- Return on equity (ROE) has demonstrated an upward trend over the years, reflecting efficient utilization of equity financing to generate profits. P&G's ROE increased from 27.79% in 2020 to 29.43% in 2024, indicating strong returns for shareholders' equity.
Overall, Procter & Gamble Company's profitability ratios indicate a strong performance with consistent profitability, effective asset utilization, and robust returns for both capital providers and shareholders.