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Execut i ve Summar y
The Pr oct er & Gambl e (P& G) and Col gat e-Pal mol i ve Company (Col gat e) ar e t he
Amer i can mul t i nat i onal consumer pr oduct s compani es. Bot h compani es have a f ai r r evenue
r ecogni t i on pol i cy t hat r ecogni zes w hen r i sk of ow ner shi p t r ansf er s t o cust omer s. In addi t i on,
bot h compani es mai nl y use f i r st -i n, f i r st -out (FIFO) i nvent or y met hod; yet mi nor amount s of
i nvent or y ar e sor t ed t he l ast -i n, f i r st -out (LIFO) met hod.
Usi ng t he common si zi ng t echni que, w e f ound t hat Col gat e hol ds a si gni f i cant hi gher
per cent age of cur r ent asset s and l ess per cent age of PPE t han P& G. In t er m of l i abi l i t i es, t he
per cent age of cur r ent l i abi l i t y of P& G w as al most unchanged dur i ng t he past t hr ee and a hal f
year s w hi l e t hat of Col gat e si gni f i cant l y decr eased due t o t he cur r ent por t i on of l ong-t er m debt
and account s payabl e. One si gni f i cant t hi ng i s Col gat e has a hi gh per cent age of t ot al l i abi l i t i es of
al most 80%, w hi ch means Col gat e i s most l i kel y t o have a gr eat er r i sk i ndi cat i ng t hat t he f i r m
w i l l exper i ence mor e f i nanci al di f f i cul t i es t han P& G.
Common si ze i ncome st at ement r eveal s t hat P& G exper i enced a decr easi ng pr of i t
mar gi n over t he l ast t hr ee year s as a r esul t of an i ncr easi ng cost of pr oduct s sol d t o sal es
per cent age, goodw i l l and i mpai r ment char ges, i ncr easi ng i ncome t axes on cont i nui ng
oper at i ons t o sal e per cent age, and decr easi ng ear ni ngs f r om di scont i nued oper at i ons. On t he
Col gat e si de, i t exper i enced a nar r ow l y f l uct uat ed pr of i t mar gi n over t hr ee year s.
The st at ement s of cash f l ow of P& G and Col gat e i l l ust r at e t he cash f l ow pat t er n of a
somew hat mat ur e f i r m. It gener at es suf f i ci ent cash f l ow f r om oper at i ons t o acqui r e new pl ant s
and equi pment , and t o r epay f i nanci ng and r epur chase shar es of i t s common st ock.
Never t hel ess, bot h f i r ms st i l l i nvest at some l evel .
Col gat e has a l ow er shor t -t er m l i qui di t y r i sk t han P& G due t o a hi gher cur r ent r at i o,
hi gher qui ck r at i o, and hi gher OCF t o CL. Not e t hat Col gat e has a sl i ght l y hi gher A/ P t ur nover
i ndi cat i ng t hat Col gat e pai d of f i t s suppl i er s at a f ast er r at e. On t he ot her hand, P& G pai d at a
sl ow er r at e by ext endi ng i t s payabl es. M or eover , Col gat e has a si gni f i cant hi gh debt f i nanci ng
t hat make t he Li abi l i t y-asset and debt equi t y r at i o unf avor abl y hi gher t han t hose of P& G;
how ever t he OCF t o l i abi l i t y and i nt er est cover age r at i o r eveal t hat Col gat e has an abi l i t y t o
cover i t s obl i gat i ons ver y w el l .
Fur t her mor e, pr of i t abi l i t y of Col gat e i s al so hi gher t han P& G l eadi ng t o a hi gher ROA
and ROE.
Bot h P& G and Col gat e have some i mpor t ant speci f i c f oot not e di scl osur es such as St ock
opt i ons, l i t i gat i on, and pensi on pl ans. These f oot not es shoul d be t hor oughl y r evi ew ed si nce
t hey mi ght af f ect t he f i nanci al st r engt h of t he compani es.
Last l y, t he st ock pr i ces of P& G and Col gat e r eveal t he same pat t er n. As of November 23,
2012, P& G s st ock pr i ce i s $69.59 per shar e, w hi l e Col gat e s st ock pr i ce i s $108 per shar e.
Por npong Lueang-A-Papong, M BA cl ass of 2 0 1 4
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Char act er i st i cs, St r at egi es, and t r ends

The Proct er & Gamble (P& G) i s one of t he bi ggest Amer i can mul t i nat i onal consumer
goods company. The company has f i ve r epor t abl e segment s under U.S. GAAP: Beaut y;
Gr oomi ng; Heal t h Car e; Fabr i c Car e and Home car e; and Baby Car e and Fami l y Car e. Whi l e none
of t he r epor t abl e segment s ar e hi ghl y seasonal , component s w i t hi n cer t ai n r epor t abl e
segment s, such as Bat t er i es (Fabr i c Car e and Home Car e), Appl i ances (Gr oomi ng) and Pr est i ge
Fr agr ances (Beaut y) ar e seasonal .
P& G s pr oduct s ar e sol d i n mor e t han 180 count r i es ar ound t he w or l d pr i mar i l y t hr ough
mass mer chandi ser s, gr ocer y st or es, member shi p cl ub st or es, dr ug st or es, depar t ment st or es,
sal ons and i n hi gh-f r equency st or es, t he nei ghbor hood st or es w hi ch ser ve many consumer s i n
devel opi ng mar ket s.

As of June 30, 2012, t ot al number of empl oyees, excl udi ng i nt er ns, coops and empl oyees of
j oi nt vent ur es i s 126,000 empl oyees appr oxi mat el y.

Colgat e-Palmolive Company ( Colgat e) i s an Ameri can mul t i nat i onal consumer pr oduct s
company f ocused on t he pr oduct i on, di st r i but i on and pr ovi si on of househol d, heal t h car e and
per sonal pr oduct s, such as soaps, det er gent s, and or al hygi ene pr oduct s. Col gat e manages i t s
busi ness i n t w o pr oduct segment s: Or al , Per sonal and Home Car e; and Pet Nut r i t i on. Col gat e i s
a gl obal l eader i n Or al Car e w i t h t he l eadi ng t oot hpast e and manual t oot hbr ush br ands
t hr oughout many par t s of t he w or l d accor di ng t o val ue shar e dat a pr ovi ded by ACNi el sen.

Col gat e s pr oduct s ar e mar ket ed i n over 200 count r i es ar ound t he w or l d. As of
December 31, 2011, Col gat e empl oyed appr oxi mat el y 38,600 empl oyees.
Si gni fi cant Account i ng Pol i ci es

P& G s pol i cy i s t o r ecogni ze r evenue w hen t i t l e t o t he pr oduct , ow ner shi p and r i sk of
l oss t r ansf er t o t he cust omer , w hi ch can be on t he dat e of shi pment or t he dat e of r ecei pt by
t he cust omer . A pr ovi si on f or payment di scount s and pr oduct r et ur n al l ow ances i s r ecor ded as
a r educt i on of sal es i n t he same per i od t hat t he r evenue i s r ecogni zed.
P& G s Invent or i es ar e val ued at t he l ow er of cost or mar ket val ue. Pr oduct -r el at ed
i nvent or i es ar e pr i mar i l y mai nt ai ned on t he f i r st -i n, f i r st -out (FIFO) met hod. M i nor amount s of
pr oduct i nvent or i es, i ncl udi ng cer t ai n cosmet i cs and commodi t i es, ar e mai nt ai ned on t he l ast -
i n, f i r st -out met hod.
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Colgat e s sal es ar e r ecor ded at t he t i me pr oduct s ar e shi pped t o t r ade cust omer s and
w hen r i sk of ow ner shi p t r ansf er s. Net sal es r ef l ect uni t s shi pped at sel l i ng l i st pr i ces r educed by
sal es r et ur ns and t he cost of cur r ent and cont i nui ng pr omot i onal pr ogr ams. Cur r ent
pr omot i onal pr ogr ams, such as pr oduct l i st i ng al l ow ances and co-oper at i ve adver t i si ng
ar r angement s, ar e r ecor ded i n t he per i od i ncur r ed. The r edempt i on cost of consumer coupons
i s based on hi st or i cal r edempt i on exper i ence and i s r ecor ded w hen coupons ar e di st r i but ed.
Vol ume-based i ncent i ves of f er ed t o t r ade cust omer s ar e based on t he est i mat ed cost of t he
pr ogr am.
The Company account s f or i nvent or i es usi ng bot h t he f i r st -i n, f i r st -out (FIFO) met hod
(80% of i nvent or i es) and t he l ast -i n, f i r st -out (LIFO) met hod (20% of i nvent or i es).

Bal ance sheet Common si ze anal ysi s
Not e t ha t t he Bal a nce sheet w a s a dj ust ed by oper a t i ng l ea se pa yment
Current Asset s
P& G - The per cent age of cur r ent asset s t o t ot al asset s gr adual l y i ncr eased dur i ng t he
t hr ee and a hal f year per i od f r om June 30, 2010 t o Sept ember 30, 2012 due t o many f act or s.
Fi r st of al l , t he company hel d mor e cash and cash equi val ent f r om 2.25% i n June 2010 t o 3.90%
i n Sept ember , 2012. Second of al l , t he account r ecei vabl e al so i ncr eased f r om 4.16% i n June
2010 t o 5.15% i n Sept ember 2012. Thi r d of al l , t he i nvent or i es, t oo, i ncr eased f r om 4.98% t o
5.40% i n June 2010 and Sept ember 2012, r espect i vel y.
Colgat e The per cent age of cur r ent asset s sl i ght l y i ncr eased dur i ng t he same per i od
mai nl y due t o t he hi gher per cent age of ot her cur r ent asset s (e.g. M ar ket abl e secur i t i es
consi st ed of bank deposi t s w i t h mat ur i t i es gr eat er t han 90 days) w hi ch i ncr eased f r om 3.37% i n
December 2009 t o 4.55% i n Sept ember 2012, and due t o t he hi gher per cent age of cash and
cash equi val ent s, w hi ch i ncr eased f r om 5.39% t o 6.77%.
Col gat e hol ds a si gni f i cant hi gher per cent age of cur r ent asset s t han P& G do. (Col gat e =
35.47%, P& G = 17.75%)
Non-Current Asset s
P& G The per cent age of Net pr oper t y, pl ant and equi pment (PPE) al most unchanged
dur i ng t he past t hr ee and a hal f year . The onl y i ncr eased f i gur e her e i s ot her noncur r ent asset s
(e.g. Invest ment secur i t i es and der i vat i ve asset s), w hi ch i ncr eased f r om 3.51% i n June 2010 t o
3.97% i n Sept ember 2012.

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Colgat e The per cent age of net pr oper t y, pl ant and equi pment obvi ousl y decr eased
si nce December 2010, f r om 33.06% t o 27.45% because t he absol ut e val ue of net pr oper t y,
pl ant and equi pment gr ow s at t he sl ow er r at e of t ot al asset s. The onl y i ncr eased f i gur e i s al so
ot her asset s w hi ch i ncr eased f r om 4.22% t o 7% i n 2010 and 2012 r espect i vel y.
As cont r ast t o cur r ent asset s, Col gat e hol ds l ess per cent age of PPE, Goodw i l l , and ot her
noncur r ent asset s t han does P& G.
Current Liabilit ies
P& G The per cent age of cur r ent l i abi l i t i es f l uct uat ed ar ound 18% - 20% dur i ng t he
t hr ee and a hal f year per i od. Account payabl e st ayed ar ound 5% t o 6%. Accr ued and ot her
l i abi l i t i es st ayed bet w een 6.6% and 6.8%. How ever , Debt due w i t hi n one year gr adual l y
decr eased f r om 7.21% i n June 2011 t o 6.12% i n Sept ember 2012 because of a r educt i on i n
commer ci al paper out st andi ng.
Colgat e The per cent age of cur r ent l i abi l i t i es gr adual l y decr eased f r om 32.32% t o
27.56% i n 2009 and 2012, r espect i vel y, mai nl y due t o t he per cent age decr eased of cur r ent
por t i on of l ong-t er m debt and of account s payabl e. In 2010, t he cur r ent por t i on of l ong-t er m
debt account ed at 5.02% w hi l e i n 2012, i t w as onl y 1.86%. Account payabl e, al so, decr eased
f r om 10.53% t o 8.80% i n 2009 and 2012, r espect i vel y.

The per cent age of cur r ent l i abi l i t y of P& G al most unchanged dur i ng t he past t hr ee and a
hal f year s w hi l e t hat of Col gat e si gni f i cant l y decr eased due t o t he cur r ent por t i on of l ong-t er m
debt and account payabl e.

Noncurrent Liabilit y and Tot al Liabilit ies
P& G The per cent age of Long-t er m debt i ncr eased f r om 16.67% i n June 2010 t o 17.34%
i n Sept ember 2012. The per cent age of Tot al l i abi l i t y i s sl i ght l y i ncr eased f r om 50.85% i n June
2011 t o 52.20% i n Sept ember 2012 due t o t he i ncr eased i n t he per cent age of Long-t er m debt
f r om 15.93% i n June 2011 t o 17.34% i n Sept ember 2012. Thi s i ndi cat es t hat P& G f i nances
appr oxi mat el y 51%-53% of i t s asset s w i t h debt , i mpl yi ng t hat i t f i nances t he r emai nder (47%-
48%) w i t h equi t y.
Colgat e The per cent age of Tot al l i abi l i t i es i ncr eased f r om 70.75% i n December 2009 t o
79.91% i n Sept ember 2012 due t o t he hi gher per cent age of Long-t er m debt , w hi ch i ncr eased
f r om 25.34% i n December 2010 t o 36.82 and Sept ember 2012 r espect i vel y ($3,585 mi l l i on vs.
$4,430 mi l l i on). Thi s i ndi cat es t hat Col gat e f i nances al most 80% of i t s asset s w i t h debt .

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Not e t hat Col gat e i s most l i kel y t o have gr eat r i sk t hat t he f i r m w i l l exper i ence f i nanci al
di f f i cul t i es, compar ed t o P& G.

Shareholders equit y
P& G - Tot al shar ehol der s equi t y i s bet w een 47% and 49.15%. Tw o si gni f i cant t r ends ar e
t hat t he per cent age of Noncont r ol l i ng i nt er est i ncr eased f r om 0.26% t o 0.48% i n 2010 and 2012
r espect i vel y, and t hat P& G i s pur chasi ng i t s st ock back. We can see f r om t he per cent age of
Tr easur y st ock i n w hi ch t he absol ut e val ue w as i ncr easi ng f r om 48.63% i n June 2011 t o 52.31%
i n Sept ember 2012.
Colgat e Tot al shar ehol der s equi t y account s about 20% of Col gat e s asset s. The
i ncr easi ng per cent age of Tr easur y st ock i ndi cat es t hat Col gat e i s pur chasi ng i t s st ock back. The
per cent age of noncont r ol l i ng i nt er est i ncr eased f r om 1.27% t o 1.42 i n 2009 and 2012
r espect i vel y.

Col gat e has a si gni f i cant l ow er per cent age of t ot al shar ehol der s equi t y compar ed w i t h
t hat of P& G. Bot h compani es have an i ncr easi ng per cent age of noncont r ol l i ng i nt er est and
t r easur y st ock.
I ncome St at ement Common si ze anal ysi s

P& G P& G exper i enced a decr easi ng pr of i t mar gi n per cent age (Net ear ni ngs di vi ded by
Net sal es) over t hr ee year s, f r om16.56% f or t he year ended June 2010, t o 14.71% f or t he year
ended June 2011, and t o 13.03% f or t he year ended June 2012. The decr easi ng pr of i t mar gi n
r esul t s f r om
1. An i ncr easi ng cost of pr oduct s sol d t o sal es per cent age
2. Goodw i l l and i mpai r ment char ges f or t he year ended June 2012
3. An i ncr easi ng i ncome t axes on cont i nui ng oper at i ons t o sal e per cent age
4. A decr easi ng ear ni ngs f r om di scont i nued oper at i ons
How ever , f or t hr ee mont h per i od dur i ng Jul y Sept ember 2012, t he company s pr of i t mar gi n
sl i ght l y i ncr eased t o 13.76%.
Colgat e Col gat e exper i enced a nar r ow l y f l uct uat ed pr of i t mar gi n over t hr ee year s,
f r om 15.64% f or year ended December 2009, t o 14.86% f or t he year ended December 2010,
and t o 15.26% f or t he year ended December 2011.For ni ne mont hs ended at Sept ember 30
2012, t he pr of i t mar gi n i ncr eased t o 15.59%. Al most ever y i t em i s nar r ow l y var i ed. For exampl e,
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gr oss pr of i t mar gi n i s about 57%-59% and oper at i ng pr of i t i s about 22%-24%. One obvi ous
t r end i s t he decr easi ng i nt er est expense t o sal e per cent age si nce2009.
P& G ( June 2011 June 2012) Colgat e ( Dec 2010 Dec 2011)
Gross prof it margin 49.34% 57.3%
Operat ing prof it margin 15.88% 22.95%
Net prof it margin 13.03% 15.26%

Col gat e s pr of i t mar gi n of 15.26% f or t he year ended December 2011 i s about 1.17 t i mes
P& G s r at i o of 13.03% f or t he year ended June 2012. Common-Si ze i ncome st at ement s r eveal
t hat bot h oper at i ng and nonoper at i ng i t ems cont r i but ed t o Col gat e s hi gher pr of i t mar gi n.
Col gat e has a hi gher gr oss pr of i t mar gi n (57.3%) t han P& G (49.34%). In addi t i on, Col gat e al so
has a hi gher oper at i ng pr of i t mar gi n (22.95%) t han P& G (15.88%). Col gat e s hi gher oper at i on
pr of i t mar gi n comes f r om a l ow er cost of sal e r at i o (42.69% ver sus 50.66%). In t er m of
nonoper at i ng act i vi t y, Col gat e r epor t s an i nt er est expense of 0.31%, compar ed t o P& G s 0.92%.
Cash fl ow
(M illions of dollar)
P& G s cash f l ow Col gat e s cash f l ow
3 mont hs
Sep 2012
June
2012
June
2011
June
2010
9 mont hs
Sep 2012
Dec
2011
Dec
2010
Dec
2009
OCF 2,770 13,284 13,231 16,072 2,133 2,896 3,211 3,277
I CF (739) (1,093) (3,482) (597) (624) (1,213) (658) (841)
FCF (1,231) (10,410) (10,023) (17,255) (1,458) (1,242) (2,624) (2,270)

P& G Oper at i ng cash f l ow of P& G decr ease f r om $16,072 f or t he year ended June 2010
t o $13,284 f or t he year ended June 2012 due t o t he l ow er net ear ni ngs ($12,736 vs. $10,904)
and hi gher account r ecei vabl e( change i n AR i s mor e negat i ve).
Invest i ng cash f l ow i s onl y -597 f or t he year ended June 2011 because of a hi gh number
Cash pr oceeds f r om asset sal es of $3,068. Int er est i ngl y, P& G s Capi t al expendi t ur es st i l l
i ncr ease si nce 2010; yet t he company al so sal e some asset s. So t hat makes i nvest i ng cash f l ow
t o f l uct uat e dur i ng t he past t hr ee year s.
Fi nanci ng cash f l ow w as l ess negat i ve i n 2012 compar ed t o 2010 (-$10,410 vs. -$17,255)
because of t he i ncr easi ng Addi t i ons t o l ong t er m debt and decr easi ng Tr easur y st ock pur chases.
It means t he company t ur ns t o i nvest mor e and do l ess st ock r epur chase f or t he year ended
June 2012. One si gni f i cant t r end i s t he i ncr easi ng number of Impact of st ock opt i on and
ot her .
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Colgat e Al t hough net i ncome of Col gat e i ncr eased dur i ng t he l ast t hr ee year s,
oper at i ng cash f l ow of Col gat e decr ease f r om $3,277 f or t he year ended December 2009 t o
$2,896 f or t he year ended December 2011 due t o t he changes i n many i t ems. For i nst ance, a
hi gher Gai n on sal e on non-cor e pr oduct l i nes , a hi gher Vol unt ar y benef i t pl an cont r i but i ons,
a hi gher Recei vabl es , and a hi gher Invent or i es Al l of t hese changes decr ease t he oper at i ng
cash f l ow .
Invest i ng cash f l ow decr eased f r om -$841 i n 2009 t o -$1,213 i n 2011 because t he
company pur chase mor e mar ket abl e secur i t i es and i nvest ment s ($289 vs. $356). Al so Col gat e
made an acqui si t i on, net of cash, of $966 i n 2011.
Fi nanci ng cash f l ow s w as l ess negat i ve i n 2011 compar ed t o 2009 (-$2,270 vs. -$1,242)
because of t he hi gher debt f i nanci ng t hat w e can see f r om a hi gher amount of Pr oceeds f r om
i ssuance of debt . How ever , f or t he l ast ni ne mont hs per i od, Col gat e s f i nanci ng cash f l ow w as
at -$1,458, hi gher t han 12 mont hs per i od i n 2011. One r eason i s t hat Col gat e i ssue l ess debt
compar ed t o t he l ast year .
In shor t , P& G and Col gat e s st at ement of cash f l ow s i l l ust r at e t he cash f l ow pat t er n of ,
somew hat , a mat ur e f i r m. It gener at es suf f i ci ent cash f l ow f r om oper at i ons t o acqui r e new
pl ant and equi pment and t o r epay f i nanci ng and r epur chase shar es of i t s common st ock.
Never t hel ess, bot h f i r ms st i l l i nvest at some l evel .
Cash Conver si on Cycl e ( CCC)
CCC i s a met r i c t hat expr esses t he l engt h of t i me, i n days, t hat i t t akes f or a company t o
conver t r esour ce i nput s i nt o cash f l ow s. The cash conver si on cycl e at t empt s t o measur e t he
amount of t i me each net i nput dol l ar i s t i ed up i n t he pr oduct i on and sal es pr ocess bef or e i t i s
conver t ed i nt o cash t hr ough sal es t o cust omer s. Bel ow i s t he Cash Conver si on Cycl e f or P& G
and Col gat e


P& G Colgat e
Jun 2012 Jun 2011 Jun 20120 Dec 2011 Dec 2011 Dec 2011
CCC 17.91 20.91 25.56 40.29 40.78 43.44
Days I nvent ory
Out st anding
60.70 63.02 65.35 65.12 69.76 69.49
Days Sale
Out st anding
26.92 26.12 26.28 35.83 37.94 38.32
Days Payable
Out st anding
69.71 68.23 66.07 60.65 66.92 64.37

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P& G The decr easi ng CCC i s a r esul t f r om a decr easi ng Days Invent or y Out st andi ng,
w hi ch i ndi cat es t hat P& G has a bet t er i nvent or y f l ow , and an i ncr easi ng Days Payabl e
Out st andi ng, w hi ch i ndi cat es t hat P& G pays of f i t s suppl i er at sl ow er r at e.
Colgat e The decr easi ng CCC i s a r esul t f r om a decr easi ng Days Invent or y Out st andi ng,
w hi ch i ndi cat es t hat Col gat e al so has a bet t er i nvent or y f l ow .
Bot h compani es have a shor t er CCC w hi ch i s a good si gn. In addi t i on, P& G s CCC i s l ow er
t han Col gat e s CCC.

Shor t -t er m l i qui di t y r i sk

Al l of t he r at i os cal cul at ed her e r epr esent t he company s abi l i t y t o cover i t s shor t -t er m
obl i gat i on. Si nce bot h P& G and Col gat e have oper at i ng l ease agr eement t hat consi der t o be
Of f -bal ance sheet f i nanci ng, w e w oul d r ecal cul at e cer t ai n i t ems i n t he bal ance sheet by addi ng
t he operat ing lease amount i n or der t o r ef l ect t he r eal obl i gat i on t he company f ace. The
f ol l ow i ng t abl e show s t he exampl e of t he changes and ef f ect s bef or e and af t er adj ust ment t he
oper at i ng l ease t o t he bal ance sheet f or most r ecent year ended.
(M illions of dollar)
P& G
For year ended June 2012
Colgat e
For year ended Dec 2012
Bef ore Af t er % Bef ore Af t er %
Current
Liabilit ies
24,907 25,196 1.16% 3,716 3,917 5.41%
Long-t erm debt 21,080 22,608 7.25% 4,430 5,511 24.40%
Tot al Liabilit ies 68,209 70,026 2.66% 10,183 11,465 12.59%
Tot al Asset s 132,244 134,061 1.37% 12,724 14,006 10.08%

The t abl e above r eveal s t hat af t er add back oper at i ng l ease payment , P& G s l ong-t er m
debt i ncr ease 7.25% and t ot al l i abi l i t i es i ncr eased 2.66%. On t he ot her si de, Col gat e show s a
si gni f i cant i ncr ease i n l ong-t er m debt of 24.40%, and t ot al l i abi l i t i es of 12.59%, i ndi cat i ng t hat
Col gat e use a l ot of oper at i ng l ease agr eement . We w i l l use t he oper at i ng l ease adj ust ed i t ems
t o cal cul at e t he shor t -t er m l i qui di t y r i sk r at i os, Long-t er m l i qui di t y r i sk, and ROA. Not e t hat ROE
w oul d not be af f ect ed.





9

Short -t erm liquidit y risk rat ios
P& G Colgat e
June 2012 June 2011 Comment
Dec
2011
Dec
2010
Comment
Current
Rat io
0.87 0.80 Favorable 1.12 0.95 Favor abl e
Quick Rat io 0.42 0.33 Favorable 0.65 0.54 Favor abl e
OCF t o CL 0.50 0.51 Unf avor abl e 0.74 0.83 Unf avor abl e
A/ P
Turnover
5.24 5.35 Favor abl e 6.02 5.45 Unf avor abl e

Current Rat io
P& G Cur r ent r at i o r eveal s t he f i r m s abi l i t y t o pay i t s shor t -t er m obl i gat i ons w i t h
shor t -t er m asset s. P& G s cur r ent r at i o i ncr eased f r om 0.80 t o 0.87, due t o a sl i ght l y decr ease i n
cur r ent asset s and a l ar ger decr eased i n cur r ent l i abi l i t y
1
. Ever y i t em i n cur r ent asset s decr eases
except cash and cash equi val ent w hi ch i ncr eased f r om $2,768 mi l l i on t o $4,436 mi l l i on. In
cont r ast , ever y i t em i n cur r ent l i abi l i t i es account payabl e, Accr ued and ot her l i abi l i t i es, and
Debt due w i t hi n one year decr eased dur i ng t he f i scal year 2011 and 2012. Typi cal l y a hi gher
cur r ent r at i o i s consi der abl y f avor abl e.
Colgat e Col gat e s cur r ent r at i o i ncr eased f r om 0.95 t o 1.12, due t o a si gni f i cant
i ncr ease i n cur r ent asset s and a sl i ght l y decr ease i n cur r ent l i abi l i t i es. An i ncr easi ng cash and
cash equi val ent f r om $490 mi l l i on t o $878 mi l l i on i s t he mai n r eason al ong w i t h t he i ncr ease i n
anot her cur r ent asset i t ems. In cont r ast , a decr easi ng cur r ent por t i on of l ong-t er m debt i s a
maj or r eason caused cur r ent l i abi l i t i es t o decl i ne. Agai n, a hi gher cur r ent r at i o i s consi der abl y
f avor abl e f or Col gat e.
Bot h P& G and Col gat e have a bet t er shor t -t er m l i qui di t y posi t i on, based on cur r ent
r at i o. How ever , Col gat e s posi t i on i s sl i ght l y bet t er .

Quick Rat io
P& G Cur r ent r at i o r eveal s t he f i r m s abi l i t y t o pay i t s shor t -t er m obl i gat i ons w i t h i t s
hi gh l i qui d asset s: cash and cash equi val ent , mar ket abl e secur i t i es, and account r ecei vabl es.
P& G s qui ck r at i o i ncr eased f r om 0.33 t o 0.42 due t o an i ncr ease i n cash and a decr ease i n
cur r ent l i abi l i t y.
Colgat e Col gat e s qui ck r at i o i ncr eased f r om 0.54 t o 0.65, due t o a si gni f i cant i ncr ease
i n cash and cash equi val ent al ong w i t h t he i ncr ease i n an ot her cur r ent asset i t ems.
A hi gher qui ck r at i o i s consi der abl y f avor abl e f or bot h Col gat e and P& G.


1
If bot h nomi nat or and denomi nat or decr ease, a l ar ger decr ease of denominat or w oul d causes t he r at i o t o go up
10

OCF t o CL
P& G Thi s r at i o measur es how w el l t he oper at i ng cash f l ow cover s cur r ent l i abi l i t i es.
Thi s r ef l ect s a company s l i qui di t y posi t i on i n t he shor t t er m based on cash basi s. P& G s OCF t o
CL r at i o sl i ght l y decr eased f r om 0.51 t o 0.50. The mar gi nal l y decr ease of t hi s r at i o came f r om
t he i ncr eased i n aver age cur r ent l i abi l i t i es, i mpl yi ng t hat P& G s l i qui di t y i s a l i t t l e bi t w or se of f .
Heal t hy mat ur e f i r ms, how ever , t ypi cal l y have a r at i o of 0.4 or mor e
2
. Thus, P& G s r at i o w as
hi gher t o t he 0.4 benchmar k.
Colgat e Col gat e s OCF t o CL r at i o decr eased f r om 0.83 t o 0.74, due t o bot h an i ncr ease
i n aver age cur r ent l i abi l i t i es ($3,850 mi l l i on t o $3,916 mi l l i on), and a decr ease i n oper at i ng cash
f l ow ($3,211 mi l l i on t o $2,896 mi l l i on).
Compar i ng t he r at i o of P& G and Col gat e, w e f ound t hat bot h f i r ms have t he decr easi ng
r at i os, w hi ch ar e consi der abl y unf avor abl e. Never t hel ess, t he r at i o of Col gat e i s bet t er si nce i t i s
si gni f i cant l y hi gher t han t hat of P& G, and t he 0.4 benchmar k.

A/ P Turnover
P& G A/ P t ur nover measur es how f ast a company pays of f i t s suppl i er s. P& G s A/ P
Tur nover decr eased f r om 5.35 f or t he year ended June 2011 t o 5.24 f or t he year ended June
2012. A f al l i ng r at i o means t hat P& G pai d of f i t s suppl i er s at a sl ow er r at e. In ot her w or ds, Days
Account s Payabl e out st andi ng i ncr eased f r om 68.23 days t o 69.71 days. In t er ms of l i qui di t y,
P& G i s bet t er of f .
Colgat e Col gat e s A/ P Tur nover i ncr eased f r om 5.45 f or t he year ended December
2010 t o 6.02 f or t he year ended December 2011. A r i si ng r at i o means t hat Col gat e pai d of f i t s
suppl i er s at a f ast er r at e. In ot her w or ds, Days Account s Payabl e out st andi ng decr eased f r om
66.92 days t o 60.65 days. In t er ms of l i qui di t y, Col gat e i s w or se of f .
In shor t , w hi l e Col gat e pai d of f i t s suppl i er s at a f ast er r at e, P& G pai d at a sl ow er r at e by
ext endi ng i t s payabl es.











2
p. 267, Fi nanci al Account ing An int r oduct i on t o concept s, met hods, and uses, 13
t h
edi t i on
11

Long-t erm liquidit y risk
P& G Colgat e
June 2012 June 2011 Comment Dec 2011 Dec 2010 Comment
Liabilit ies-
Asset s
52.23% 51.38%
Al most
unchanged
81.86% 77.28% Hi gher f i nanci al r i sk
Debt -Equit y
0.3304 0.3301
Al most
unchanged
0.70 0.62 Hi gher f i nanci al r i sk
OCF t o TL
18.73% 18.89%
Al most
unchanged
27.52% 34.27% Unf avor abl e
I nt erest
Coverage
17.28 18.65
Unf avor abl e but
st i l l hi gh
73.87 59.14
Favor abl e/ Obvi ous
hi gh


Liabilit ies Asset rat io
P& G - Thi s r at i o show s t he pr opor t i on of l i abi l i t i es a f i r m has compar ed t o i t s t ot al
asset s. The r at i o gi ves an i dea how t he company f i nances i t s asset s al ong w i t h t he pot ent i al
f i nanci al r i sk. P& G s Li abi l i t i es-asset s r at i o st ayed at 51.38% and 52.23% f or year ended June
2011 and 2012, r espect i vel y, i ndi cat i ng t hat P& G used al most t he same pr opor t i on of debt
f i nanci ng and had t he same f i nanci al r i sk dur i ng t he per i od.
Colgat e - Col gat e s Li abi l i t i es-asset s r at i o i ncr eased f r om 77.28% t o 81.86% f or year
ended December 2010 and 2011, r espect i vel y, i ndi cat i ng t hat Col gat e used t he mor e debt
f i nanci ng. Col gat e s l ong-t er m debt i ncr eased f r om $3,853 mi l l i on t o $5,511 mi l l i on. Not e t hat
w e al r eady i ncl uded oper at i ng l ease payment t o long-t er m debt . The oper at i ng l ease payment s
w er e $1,038 mi l l i on and $1,081 mi l l i on i n 2010 and 2011 r espect i vel y.
In shor t , Col gat e has a si gni f i cant hi gher f i nanci al r i sk t han P& G

Debt -Equit y
P& G - Thi s r at i o st ayed al most at t he same l evel at about 0.33.
Colgat e - Col gat e s Debt -Equi t y r at i o i ncr eased f r om 0.62 t o 0.70 due t o t he i ncr eases i n
l ong-t er m debt . Not e t hat t he mor e st abl e t he ear ni ngs and cash f l ow , t he hi gher i s t he debt
r at i o t hey deem accept abl e or saf e.
Agai n Col gat e cl ear l y has a si gni f i cant hi gher f i nanci al r i sk t han P& G.

OCF t o TL
P& G - Thi s r at i o r eveal s a company s abi l i t y t o cover shor t -t er m and l ong-t er m l i abi l i t i es
w i t h i t s cash f l ow f r om oper at i ons. A mat ur e, f i nanci al l y heal t hy company t ypi cal l y has a cash
12

f l ow f r om oper at i on t o t ot al l i abi l i t i es r at i o of 20% or mor e
3
. P& G s OCF t o TL r at i o w as
appr oxi mat el y at 17%-18% a l i t t l e bel ow t he 20% benchmar k l evel .
Colgat e Col gat e s OCF t o TL r at i o decr ease f r om 34.27% t o 27.52%, mai nl y due t o t he
decr ease i n OCF, f r om $2,896 t o $2,133, and t he i ncr eased i n aver age t ot al l i abi l i t i es, f r om
$9,370 mi l l i on t o $10,523 mi l l i on. The decr easi ng r at i o suggest s t hat Col gat e has hi gher
f i nanci al r i sks, compar ed t o t he pr evi ous year .
Al t hough Col gat e has t he decr easi ng OCF t o TL r at i o, Col gat e, based on t hi s r at i o, has a
bet t er f i nanci al r i sk posi t i on t han has P& G.

I nt erest Coverage
P& G Thi s r at i o at t empt s t o i ndi cat e t he r el at i ve pr ot ect i on t hat oper at i ng pr of i t abi l i t y
w i l l meet r equi r ed i nt er est payment s. P& G s i nt er est cover age r at i o decr eased f r om 18.65 t o
17.28. One r eason i s t hat oper at i ng i ncome decl i ned f r om $15,495 mi l l i on t o $13,292 mi l l i on f or
t he year ended June 2011 and 2012, r espect i vel y. Int er est expense, how ever , sl i ght l y decr eased
f r om $831 mi l l i on t o $769 mi l l i on i n t he same per i od.
Al t hough P& G s abi l i t y t o cover i nt er est expenses decr eased, i t i s not a ser i ous pr obl em
si nce t he r at i o i s st i l l hi gh. Anal yst s gener al l y vi ew an i nt er est cover age r at i o bel ow 3.0 as r i sky.
Colgat e Col gat e has a consi der abl y hi gh i nt er est cover age r at i o i ncr eased f r om 59.14
t o 73.87 f or t he year ended December 2010 and 2011 r espect i vel y. The i ncr easi ng i nt er est
cover age r at i o r esul t s f r om bot h an i ncr eased oper at i ng i ncome and decr eased i nt er est
expense.
In shor t , t he decr easi ng of i nt er est cover age r at i o of P& G i s l i kel y unf avor abl e. On t he
ot her hand, t he i ncr easi ng of i nt er est cover age r at i o of Col gat e i s l i kel y f avor abl e.
Pr ofi t abi l i t y and l ever age

Ret urn on Asset
ROA =
Nct Incomc + Intcrcst cxpcnscs ( tax adjustcd
4
)
Avcragc Asscts

=
Nct Incomc + Intcrcst cxpcnscs ( tax adjustcd)
Rcvcnucs

Rcvcnucs
Avcragc Asscts



3
p. 270, Fi nanci al Account ing An int r oduct i on t o concept s, met hods, and uses, 13
t h
edi t i on
4
Ef f ect i ve t ax r at e di f f er s f r om t he company s st at ed r at e due t o some account i ng f act or s. The ef f ect i ve t ax r at e
gi ves a good under st andi ng r egar di ng t o t he t ax r at e P& G and Col gat e ar e f aci ng.
P& G Col gat e
June 2012 June 2011 Dec 2011 Dec 2010
Effect i ve T ax r at e 27.1% 22.0% 32.6% 32.6%

13

( M illions of dollar)
P& G Colgat e
June 2012 June 2011 Dec 2011 Dec 2010
ROA 8. 36% 9. 34% 20. 64% 20. 11%
Pr of i t M ar gi n 13.52% 15.34% 14.74% 14.41%
TA Tur nover 0.62 0.61 1.40 1.40

Ret ur n on asset f or P& G (w i t hout adj ust i ng oper at i ng l ease payment ) decl i ned f r om
9.34% i n June 2011 t o 8.36% i n June 2012 because of t he decr easi ng pr of i t mar gi n f r om 15.34%
t o 13.52%. Not e t hat t ot al asset t ur nover i s al most unchanged. On t he ot her hand, r et ur n on
asset f or Col gat e i ncr eased f r om 20.11% t o 20.64% mai nl y due t o t he hi gher pr of i t mar gi n.
Af t er w e t ake t he oper at i ng l ease payment i nt o account , ROA f or bot h P& G and Col gat e
decr eased as show n bel ow .
P& G Colgat e
June 2012 June 2011
Dec 2011 Dec 2010
ROA w it h OPL
adjust ed
8. 26% 9. 23% 18. 68% 18. 08%
Pr of i t M ar gi n 13.52% 15.34% 14.74% 14.41%
TA Tur nover 0.6110 0.6018 1.27 1.25

Annualized ROA
( M illions of dollar)
P& G Colgat e
3 mont hs Ended
Sep 2012
9 mont hs Ended
Sep 2012
Net sale 20,739 12,799
I nt erest
expense
172 20
Ef f ect ive t ax
rat e
0.254 0.318
Net I ncome 2,814 1,874
Average CSE 64,492 2,784
Average
Asset s
134,066 13,424


14

P& G s annual i zed ROA = [ 2,814+172(1-0.254)] / 134,066 x 4
= 8.78%

Col gat e s annual i zed ROA = [ 1,874+20(1-0.318)] / 13,424 x (4/ 3)
= 19.22%

Ret urn on Equit y

ROE =
Nct ncomc-Pc]ccd stock ddcnds
Acugc CSL


=
Nct ncomc-Pc]ccd stock ddcnds
Rccnucs

Rccnucs
Acugc Asscts

Acugc Asscts
Acugc CSL


P& G Colgat e
June 2012 June 2011 Dec 2011 Dec 2010
ROE 15.90% 17. 87%% 90. 74% 71. 42%
Pr of i t M ar gi n 12.55% 14.26% 14.53% 13.94%
TA Tur nover 0.62 0.61 1.40 1.40
Equi t y M ul t i pl i er 2.05 2.06 4.46 3.67

Not e t hat Of f -bal ance sheet f i nanci ng such oper at i ng l ease w i l l not af f ect ROE si nce i t i s
not af f ect net i ncome or equi t y.
P& G - Ret ur n on common equi t y f or P& G decr eased f r om 17.87% t o 15.90% f or t he year
ended June 2011 and 2012 r espect i vel y. The r eason behi nd a decl i ni ng ROE i s a f al l i ng pr of i t
mar gi n
5
t hat decr eased by 171 basi s poi nt s, f r om 14.26% t o 12.55%. How ever , t ot al asset
t ur nover r at i o, w hi ch i ndi cat es how w el l a company manage i t s asset s, and Equi t y mul t i pl i er ,
w hi ch i ndi cat es f i nanci al l ever age, w er e st abl e at appr oxi mat el y 0.62 and 2.05 r espect i vel y.
Colgat e - Ret ur n on common equi t y f or Col gat e si gni f i cant l y i ncr eased f r om 71.42% t o
90.74% f or t he year ended December 2010 and 2011 r espect i vel y. The r easons behi nd a r i si ng
ROE ar e an i ncr easi ng pr of i t mar gi n t hat i ncr eased by 59 basi s poi nt s, f r om 13.94% t o 14.53%,
and an i ncr easi ng equi t y mul t i pl i er f r om 3.67 t o 4.46, w hi l e t ot al asset t ur nover st ays const ant .
In shor t , Col gat e has somew hat a sur pr i si ngl y hi gher ROE t han t hat of P& G, r esul t i ng
f r om a hi gher pr of i t abi l i t y (pr of i t mar gi n) and a hi gher f i nanci al l ever age (equi t y mul t i pl i er ).


5
Not e t hat pr of i t mar gin f or ROE i s di f f er ent f r om pr of i t mar gi n f or ROA
15

Annualized ROE

P& G s annual i zed ROE = (2,814-57) / 64,492 x 4
= 17.01%

Col gat e s annual i zed ROE = (1,874 0) / 2,784 x (4/ 3)
= 89.77%
P& G Annual i zed ROE f r om a t hr ee mont hs per i od, Jul y t o Sept ember 2012, i s 17.01%,
a bi t hi gher t han ROE f or year ended June 2012 at 16.29%
Colgat e Annual i zed ROE f r om ni ne mont hs per i od, Januar y t o Sept ember 2012, i s
89.77%, a mi ni mal l ess t han ROE f or year ended December 2012 at 90.74%
Annual i zed ROEs f or P& G and Col gat e r eveal t hat bot h f i r ms per f or m al most t he same
as t hey di d l ast year .

Comparing t he same Period ( June 2011 t o December 2011)
Si nce P& G has a year ended at June, w hi l e Col gat e has a year ended at December .
Compar i ng t hese t w o f i r ms usi ng t he dat a f r om t he same per i od w oul d gi ve a cl ear pi ct ur e how
w el l t he compani es per f or m dur i ng t he same t i me. Thus, t he f ol l ow i ng sect i on w i l l show t he
cal cul at i on of ROE and ROE of bot h compani es usi ng dat a f r om June 2011 t o December 2011.
P& G Colgat e
Si x mont hs
per i od
(June Dec
2011)
Annual i zed
Si x mont hs
per i od
(June Dec
2011)
Annual i zed
ROE 7. 09% 14. 19% 46. 02% 92. 05%
Pr of i t M ar gi n 10.70% n/ a 14.41% n/ a
TA Tur nover 0.3231 n/ a 0.7160 n/ a
Equi t y M ul t i pl i er 2.0516 n/ a 4.4599 n/ a

ROA 3. 67% 7. 33% 10. 46% 20. 92%
Pr of i t M ar gi n 11.35% n/ a 14.61% n/ a
TA Tur nover 0.3231 n/ a 0.7160 n/ a

For t he si x mont hs per i od f r om June t o December 2011, Col gat e has hi gher Ret ur n on
Equi t y and Ret ur n on Asset t han P& G. A hi gher ROE (46.02% vs. 7.09%) i s a r esul t of a hi gher
pr of i t mar gi n (14.41% vs. 10.70%), a hi gher t ot al asset t ur nover (0.7160 vs. 0.3231), and a
16

si gni f i cant l y hi gher f i nanci al l ever age, w hi ch i s r ef l ect ed i n t he Equi t y mul t i pl i er (4.4599 vs.
2.0516). Ret ur n on Asset r eveal s t he same i nf or mat i on.

Speci fi c Foot not es

St ock opt ions
Bot h P& G and Col gat e have st ock-based compensat i on pl ans under w hi ch t he
compani es annual l y gr ant s st ock opt i on, r est r i ct ed st ock, r est r i ct ed st ock uni t , and per f or mance
st ock uni t aw ar ds t o key manager s and di r ect or s. The f ol l ow i ng t abl e show s t he i mpact of
compensat i on cost t o net i ncome.


(M i l l i ons of dol l ar )
P& G Colgat e
Jun 2012 Jun 2011 Dec 2011 Dec 2010
Net i ncome af t er
consi der i ng st ock opt i on
expense vi a t he Fai r Val ue
M et hod
$10,756 $11,797 $2,554 $2,313
Net i ncome bef ore
consi der i ng st ock opt i on
expense vi a t he Fai r Val ue
M et hod
$11,031 $12,094 $2,636 $2,394
$ Decl i ne i n Net Income
f r om st ock opt i on
expense vi a t he Fai r Val ue
M et hod
$275 $297 $82 $ 81
% Decl i ne i n Net Income
f r om st ock opt i on
expense vi a t he Fai r Val ue
M et hod
2.49% 2.46% 3.11% 3.38%
Black-Scholes assumpt ions:
Ri sk-f r ee r at e 1.9% 3.4% 0.8% 1.3%
Expect ed vol at i l i t y 15% 16% 21.3% 22.5%
Expect ed l i f e 8.5 yr s 8.8 yr s 4.5 yr s 4.5 yr s
Di vi dend yi el d 2.6% 2.4% 2.6% 2.8%

Si nce net i ncome bef or e consi der i ng st ock opt i on expense vi a t he Fai r Val ue M et hod i s
di f f er ent f r om bet i ncome af t er due t o t he st ock opt i on expense, cal cul at i ng ROA usi ng net
17

i ncome bef or e consi der i ng st ock opt i on expense vi a t he Fai r Val ue M et hod w oul d r eveal
anot her aspect of oper at i ng per f or mance t o i nvest ment w i t hout r egar d t o f i nanci ng. Tabl e
bel ow r epr esent ROA f or t he cur r ent f i scal year f r om t hr ee di f f er ent aspect s:






Lit igat ion
P& G P& G i s subj ect t o var i ous l egal pr oceedi ngs and cl ai ms w hi ch cover a w i de r ange
of mat t er s such as ant i t r ust , t r ade and ot her gover nment al r egul at i ons, pr oduct l i abi l i t y, pat ent
and t r ademar k mat t er s, adver t i si ng, cont r act s, envi r onment al i ssues, l abor and empl oyment s
mat t er s and i ncome and ot her t axes. Sever al r egul at or y aut hor i t i es i n Eur ope have i ssued
separ at e deci si ons pur suant t o t hei r i nvest i gat i ons al l egi ng t hat t he Company, al ong w i t h
sever al ot her compani es, engaged i n vi ol at i ons of compet i t i on l aw s i n t hose count r i es.
The Company has accr ued t he assessed f i nes f or each of t he deci si ons, of w hi ch al l but
$15 has been pai d as of June 30, 2012. M ost of t hose ar e on appeal . As a r esul t of our i ni t i al and
on-goi ng anal yses of ot her f or mal compl ai nt s, t he Company has accr ued l i abi l i t i es f or
compet i t i on l aw vi ol at i ons t ot al i ng $18 as of June 30, 2012.
Colgat e Col gat e i s subj ect t o a w i de var i et y of l egal pr oceedi ngs. These i ncl ude
di sput es r el at i ng t o i nt el l ect ual pr oper t y, cont r act s, pr oduct l i abi l i t y, mar ket i ng, adver t i si ng,
f or ei gn exchange cont r ol s, ant i t r ust and t r ade r egul at i on, as w el l as l abor and empl oyment ,
envi r onment al and t ax mat t er s.
The Company al so det er mi nes est i mat es of r easonabl y possi bl e l osses or r anges of
r easonabl y possi bl e l osses i n excess of r el at ed accr ued l i abi l i t i es, i f any, w hen i t has det er mi ned
t hat a l oss i s r easonabl y possi bl e and i t i s abl e t o det er mi ne such est i mat es. The Company
cur r ent l y est i mat es t hat t he aggr egat e r ange of r easonabl y possi bl e l osses i n excess of any
accr ued l i abi l i t i es i s $ 0 t o appr oxi mat el y $ 200 mi l l i on (based on cur r ent exchange r at es).




P& G Colgat e
General ROA 8.36% 20.64%
ROA w it h operat ing lease
adjust ed
8.26% 18.68%
ROA w it h operat ing lease and
st ock opt ion adjust ed
8.46% 20.23%
18

Def ined-benef it pension plans
P& G Colgat e
Jun 2012 June 2011 Dec 2011 Dec 2010
PBO 13,573 12,229 2,025 1,952
FM V of plan asset 7,974 7,962 1,426 1,377
Funded st at us (5,599) (4,267) (599) (575)
ABO 11,763 10,436 1,892 1,808

Bot h P& G and Col gat e have a negat i ve f unded st at us. One si gni f i cant t r end i s t he
f unded st at us become mor e negat i ve i n t he l ast t w o year s.
Audit ors opinion
P& G - The audi t i ng f i r m of Del oi t t e & Touche LLP gi ves Pr oct er & Gambl e Company a
clean opinion. Accor di ng t o t he f or m 10-K, i t st at es t hat In our opi ni on, such Consol i dat ed
Fi nanci al St at ement s present f airly, i n al l mat er i al r espect s i n conf or mi t y w i t h account i ng
pr i nci pl es gener al l y accept ed i n t he Uni t ed St at es of Amer i ca.
In addi t i on, t he audi t i ng f i r m of KPM G al so gi ves an unqualif ied opinion t o Pr oct er & Gambl e
Company.
Colgat e - The audi t i ng f i r m of Pr i cew at er houseCooper s LLP gi ves Col gat e-Pal mol i ve
Company a clean opinion. Accor di ng t o t he f or m 10-K, i t st at es t hat In our opi ni on, t he
consol i dat ed f i nanci al st at ement s l i st ed i n t he accompanyi ng i ndex present f airly, i n al l mat er i al
r espect s i n conf or mi t y w i t h account i ng pr i nci pl es gener al l y accept ed i n t he Uni t ed St at es of
Amer i ca.
How ever , at t he end of Report of I ndependent Regist ered Public Account ing Firm sect ion, i t
st at es t hat Because of i t s i nher ent l i mi t at i ons, i nt er nal cont r ol over f i nanci al r epor t i ng may not
pr event or det ect mi sst at ement s. Al so, pr oj ect i ons of any eval uat i on of ef f ect i veness t o f ut ur e
per i ods ar e subj ect t o t he r i sk t hat cont r ol s may become i nadequat e because of changes i n
condi t i ons, or t hat t he degr ee of compl i ance w i t h t he pol i ci es or pr ocedur es may det er i or at e.




19

Accr ual effect s
P& G Colgat e
Year Ended June 2012 Year Ended December 2011
Accr ual s (0.0088) 0.0537

The accr ual s met r i cs of bot h P& G and Col gat e ar e consi der abl y l ow . The accr ual s met r i c
r eveal s t hat bot h compani es ar e unl i kel y t o manage ear ni ngs or t hat t hey have a l i mi t ed
gr ow t h.


Basi c and Di l ut ed Ear ni ngs per Shar e ( EPS)
P& G Col gat e
Jun 2012 Jun 2011 Dec 2011 Dec 2011
Basi c EPS $3.82 $4.12 $4.98 $4.45
Di l ut ed EPS $3.66 $3.93 $4.94 $4.31
% Di l ut ed 4.37% 4.83% 0.81% 3.25%

P& G Basi c EPS decr eased 7.85% f r om t he pr evi ous year t o $3.82 i n f i scal year 2012.
Di l ut ed net ear ni ngs per shar e decr eased 7% f r om t he pr i or year t o $3.66 i n f i scal 2012 behi nd
a decr ease i n net ear ni ngs f r om cont i nui ng oper at i ons, par t i al l y of f set by an i ncr ease i n net
ear ni ngs f r om di scont i nued oper at i ons and a r educt i on i n shar es out st andi ng. The r educt i on i n
t he number of shar es out st andi ng w as dr i ven b y t r easur y shar e r epur chases of $4.0 bi l l i on,
w hi ch w er e made under our publ i cl y announced shar e r epur chase pr ogr am.
The per cent ages of di l ut i on w er e 4.37% and 4.83% i n f i scal year 2012 and 2011,
r espect i vel y.
Colgat e Basi c EPS i ncr eased 11.91% f r om t he pr evi ous year t o $4.98 i n f i scal year
2011. Di l ut ed net ear ni ngs per shar e i ncr eased 14.62% f r om t he pr i or year t o $4.94 i n f i scal
2011. Net i ncome at t r i but abl e t o Col gat e-Pal mol i ve Company w as $2,431, or $4.94 per shar e
on a di l ut ed basi s, i n 2011 compar ed w i t h $2,203, or $4.31 per shar e on a di l ut ed basi s, i n 2010
and $2,291, or $4.37 per shar e on a di l ut ed basi s, i n 2009.



20

Per for mance of t he compani es st ock








P& G and Col gat e s st ocks ar e cur r ent l y t r aded on t he New Yor k St ock Exchange (NYSE),
w hi ch i s t he l ar gest st ock exchange mar ket . P& G s t i cker i s PG . Col gat e s t i cker i s CL
Accor di ng t o t he char t f r om Bi gChar t .com, dur i ng t he past t w o year s P& G s st ock and
Col gat e s st ock have al most t he same pr i ce pat t er n. Dur i ng l ast t w o year s, P& G s st ock pr i ce
r eached t he l ow est pr i ce at 59.83 on Januar y 22, 2011, and r eached t he hi ghest pr i ce at $69.63
on Oct ober 5, 2012. The st ock pr i ce on November 23, 2012 i s at 69.59, cl ose t o t he hi ghest l evel
r epor t ed on Oct ober 5.
On t he ot her si de, Col gat e s st ock pr i ce r eached t he l ow est pr i ce at 76.24 on Febr uar y 4,
2011, and r eached t he hi ghest pr i ce at $108.45 on Oct ober 5, 2012 (t he same dat e as P& G! ).
The st ock pr i ce on November 23, 2012 i s at $108. 00, al so cl ose t o t he hi ghest l evel r epor t ed on
Oct ober 5.
M arket capit alizat ion
P& G has t he mar ket capi t al i zat i on of 190.93 bi l l i on as of November 30, 2012
Col gat e has t he mar ket capi t al i zat i on of 51.26 bi l l i on as of November 30, 2012








21

Common sized Balance sheet P& G


22

Common sized Balance sheet Colgat e





































23

Common sized I ncome St at ement P& G



















24

Common sized I ncome St at ement Colgat e