21 August 2009

PG: Financial Gauge Analysis for the June 2009 Quarter (Updated)

We previously posted Procter & Gamble's (NYSE: PG) preliminary Financial Gauge scores for the June 2009 quarter.  We also listed the financial metrics that determined the scores.  The results took into account the financial statements in P&G's earnings announcement

P&G later filed a 10-K annual report with much more detail, including a complete Balance Sheet and the first characterization of P&G's inventory at the end of June 2009.  We used this additional information to recompute the scores and metrics.

As it happens, the data in the 10-K did not change the gauge scores from our initial report.

However, some of the financial metrics did change by minor amounts.  The 10-K also gave us a chance to collect some historical figures that were restated after the sale of the Folgers coffee business to J.M. Smucker (NYSE: SJM).

For the record, the latest set of data is listed below.

Cash ManagementJun 2009Mar 2009Jun 20085-Yr Avg
Current Ratio0.
Debt/CFO (years)
Inventory/CGS (days)71.872.870.368.5
Finished Goods/Inventory67.6%66.7%64.0%66.4%
Days of Sales Outstanding (days)29.128.529.930.0
Working Capital/Invested Capital-9.4%-11.4%-6.3%-5.8%
Cash Conversion Cycle Time (days)38.651.944.852.8
Gauge Score (0 to 25)5

Jun 2009Mar 2009Jun 20085-Yr Avg
Revenue growth-3.3%1.4%6.9%9.1%
Operating Profit growth9.9%13.6%19.1%14.4%
CFO growth-0.6%-6.9%11.9%16.2%
Net Income growth-4.3%5.9%14.1%18.4%
Gauge Score (0 to 25)161310
1. Revenue, CFO, and Net Income growth rates compare the last four quarters to the four previous quarters.  The Operating Profit rate is the annualized rate of growth in Operating Profit after Taxes over the last 16 quarters.

ProfitabilityJun 2009Mar 2009Jun 20085-Yr Avg
Operating Expenses/Revenue79.6%80.0%79.6%80.2%
Free Cash Flow/Invested Capital11.8%10.5%12.0%13.6%
Accrual Ratio0.6%2.1%-0.3%-0.1%
Gauge Score (0 to 25)6799

ValueJun 2009Mar 2009Jun 20085-Yr Avg
P/E vs. S&P 500 P/E
Enterprise Value/Cash Flow (EV/CFO)12.813.115.516.7
Gauge Score (0 to 25)2023126

OverallJun 2009Mar 2009Jun 20085-Yr Avg
Gauge Score (0 to 100)44524027

Full disclosure: No position in PG at time of writing.

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