Ratio Analysis and Statement of Cash Flow: The Proctor and Gamble Company

All caller accounts are prepared in consonance with the different accounting laws and regulations, and are designed for a encompassing audience. Therefore, to control data for specific purposes it is frequently necessary to confront the numbers to specific analysis. Following is an analysis of The P& conference A;G companys social class 2004 and 2005 fiscal statements. This analysis is intended to, through the deliberateness of ratios; assess the short-term and semipermanent liquidity, in addition to the profit world power of The P&G Corporation. Short-term liquidity is the ability of the alignment to meet its short-term financial commitments. Short-term liquidity ratios measure the relationship between menses liabilities and current assets. This helps us beatnik the P&Gs ability to sell inventory, to collect receivables and to fix current liabilities. Following is the authoritative Ratio, the return on rough sales ratio, earnings per share (EPS), deb t ratio, and the price earnings ratio. These measures are concentrate upon the current assets and current liabilities to asses the P&G Corporations ability to meet their financial commitments as they become due. authentic Ratio Current Ratio= Current Assets $20,329.00 = 0.81189 Current Liabilities $25,039.00 For the 2005 financial year, P&G Corporation had $20,329.00 in union current assets and $25,039.00 in total current liabilities. This gives the society $0.81 for ever dollar of current liabilities.

This could be seen as a dear situation, but by looking into the 2004 financial year didactics of Financial Position, it can be a! scertained that the company had $0.30 for ever dollar of current liabilities. That is $17,115.00 in total current assets and $57,048.00 in total current liabilities. This shows that P&G Corporation increased its ability to pay debts (The P&G Corporation, 2005) Free Cash Flow. Free cash mix is outlined as operating cash flow little neat spending. The company views free cash flow as an all important(p) measure because... If you want to get a generous essay, establish it on our website: BestEssayCheap.com

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