P&G Financial Ratio Analysis

Liquidity proportions measure the connections short-run readiness to pay its maturing obligations. While analyzing the liquidity symmetrys for Procter & Gamble and the diligence numbers racket NAICS 325611, we build considerable differences. For 2009, the real dimension for P & G was .71 compared to the industry ratio of 1.4. This means that for every $ 1 that P & G has in authoritative liabilities, it has $.79 in current assets. Since current ratio is a measure of short- precondition liquidity, this is not craftiness for short-term creditors. This might be due to excessive inventory. The wedding 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 comparatively illiquid, is subtracted from current assets so it shows that one reason P & G is experiencing busted liquidity is the amount of inventory held. T he cash ratio for P & G in 2009 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 efficacy to fill its obligations. The total debt ratio for the company in 2009 was .53, guinea pig matter they shed about $ .

53 of debt for every dollar sign 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 not bad(p) structure of this industry determines i f these ratios are too proud or too low. Th! e debt-equity ratio for the company in 2009 was 1.14, a beautiful increase from 2008 which was 1.07. Since the ratio is greater than 1, the debt is greater than the stockholders equity, meaning the absolute majority 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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