Procter & Gamble Company (PG)
Solvency ratios
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.40 | 2.43 | 2.58 | 2.52 | 2.57 |
The provided data indicates that Procter & Gamble Company has maintained a debt-free capital structure over the observed period, as evidenced by the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio remaining at zero from June 30, 2021, through June 30, 2025. This consistent absence of leverage suggests that the company relies entirely on equity financing and has not engaged in debt issuance or borrowing activities during these years.
The financial leverage ratio, which measures the degree to which the company employs debt to finance its assets, fluctuates between approximately 2.43 and 2.58 over the period. While this ratio generally indicates a moderate level of leverage, it is noteworthy that it remains unchanged in relative terms despite the absence of debt. This could imply that the leverage ratio is derived from other operational or financing considerations or may reflect internal accounting measures that do not directly correlate with debt levels.
Overall, the data indicates that Procter & Gamble’s solvency profile is characterized by a strong equity position with no reliance on external debt. This financial strategy results in minimal financial risk associated with leverage but may also limit opportunities for growth through debt financing. The stability in ratios underscores the company's conservative approach to capital structure management and suggests a robust solvency position over the analyzed period.
Coverage ratios
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Interest coverage | 0.00 | 21.28 | 25.21 | 41.99 | 36.09 |
The interest coverage ratios for Procter & Gamble Company over the fiscal years ending June 30 are as follows:
- In June 2021, the company exhibited a robust interest coverage ratio of 36.09. This indicates that earnings before interest and taxes (EBIT) were more than 36 times the company’s interest expenses, reflecting a strong capacity to meet interest obligations comfortably.
- The ratio increased in June 2022 to 41.99, further strengthening Procter & Gamble’s ability to service its interest costs. This improvement suggests increased earnings or effective cost management that enhanced the company's financial cushion.
- By June 2023, the interest coverage ratio decreased to 25.21. Although still indicating a comfortable margin, the decline signals a deterioration in profitability or an increase in interest expense relative to EBIT. Despite this reduction, the ratio remains well above the typical threshold of 3 to 5 times, signifying sustained financial strength.
- The downward trend persists into June 2024, with the ratio contracting to 21.28. This continued decrease further narrows the margin but still maintains a solid coverage level. Such a decline could point to rising interest expenses, a decrease in core earnings, or both.
- Notably, by June 2025, the interest coverage ratio is reported as 0.00. This suggests that EBIT has fallen to zero or negative levels, or this data may reflect an exceptional restructuring or reporting adjustment, implying that the company may be experiencing significant operational or financial difficulties impacting its ability to generate earnings sufficient to cover interest obligations.
Overall, the trend from 2021 through 2024 indicates a gradual decrease in Procter & Gamble’s interest coverage ratio, pointing toward diminishing earnings capacity relative to interest expenses but still maintaining a generally healthy coverage level up to 2024. The 2025 data represents a critical deterioration, indicating potential financial stress that warrants further investigation to understand its causes and implications for the firm’s debt servicing capacity.