This case compares two similar but very different companies (all financials have
This case compares two similar but very different companies (all financials have been placed in Google Sheets here). P&G is often thought of as one of the great consumer product companies in the world. Colgate, relatively speaking, flies under the radar and is not as well known or respected. The case presents the history of the two companies and the recent issues at P&G. Be sure to address the following points in your write-up of the case:
Perform a DuPont analysis of P&G and Colgate from 2008 through 2012. Include sustainable growth (for the retention ratio, you can use (1 – payout-ratio), where the payout-ratio can be calculated as dividends-per-share/basic-earnings-per-share). For 2012 only, calculate each companies’ P/E and M/B (for P&G, assume a year-end stock price of $67.89). Assume that Net Income equals ‘net earnings attributable’ or ‘net income attributable.’
Evaluate the overall financial performance of the two companies. Which company is doing better? Are there interesting trends happening over this time period?
What can the DuPont analysis and other financial information tell us about the company’s marketing and operations? (the Note on the DuPont Analysis provides some guidance; use of outside resources is unnecessary). What do you think about Cook’s leadership at Colgate or Lafley’s and McDonald’s at P&G?
OPTIONAL (to increase your chance of receiving 4’s): Draw meaningful insights from a common size analysis of the companies and from a DuPont analysis of the companies’ segments.
NOTE:
In some instances, financial figures or stock prices presented in the case may differ from what you can find online or in annual reports (since the case was written, financials may have been restated and stock “splits” can affect stock price units). If so, please use the financials from our case. There is no need to use outside data.
You are free to help each other and review each other’s work as long as no copying and pasting occur and you submit your own work.
Be sure to follow these guidelines:
**Do not put your name anywhere **on the assignment or on shared exhibits (Forum will track your submission). Your assignment will be graded blindly.
Be sure you submit a single PDF on Forum (do NOT submit Zip files).
Assume your audience is knowledgeable about the accounting/finance concepts we’ve covered in class and is familiar with the case facts. Don’t waste words explaining what asset turnover is or what P&G sells. Jump right into the analysis. Also, there’s no need to replicate case exhibits (you may reference them directly).
Go deep. When formulating a response, ask why. Then ask why again and justify your explanation by citing case facts and material. Back up your explanations with evidence. Integrate numbers into your arguments.
Use no more than two significant digits for all numbers in the text and exhibits (12%, 3.5%, or 0.46%, not .12480294). Less is more. Displaying too many digits makes numbers hard to read and actually obscures their value and intuition.
All exhibits you create yourself and referenced in your write-up must be included in the write-up itself and be properly formatted. You must also include a link to all your exhibits so that your calculations can be seen and checked (only those exhibits that appear in the write-up and are explicitly discussed will be assessed). Place your link at the very beginning of the write-up and be sure to grant your professor and peer tutors viewing privileges. Follow these guidelines (e.g. avoid including numbers in a calculation cell but instead, reference inputs/assumptions cells that do contain numbers; use black text for calculations and blue text for inputs).
Check your spelling and grammar. Poor writing conveys carelessness and unprofessionalism.
The course-related LO’s that are #financials (x2) and #bizfunctions (x1) will be graded based on your answers to the 3 questions above, with each corresponding to a specific LO as described below. You should tag these LO’s and explain in detail how you used them.
In addition to the LO’s mentioned above, use and tag #breakitdown in the text wherever appropriate.
Add a word count at the end of the assignment (exclude exhibits, footnotes, and the bibliography).
For assignment deadline extensions please refer to the policies section written at the end of the course syllabus.
Assignment Information
Length:
1000 – 1250 words plus as many exhibits as necessary to show results of analysis.
Weight:
15%
Learning Outcomes Added
Financials: Evaluate business situations by identifying or calculating accounting and financial information.
BizFunctions: Analyze how improved operating, marketing, or other business functions can enhance financial performance.
links provided:
https://course-resources.minervaproject.com/uploaded_files/production/00230158-5804/assignment-1—procter—gamble-and-colgate-palmolive.pdf
https://docs.google.com/spreadsheets/d/1qwbg3Fz0SSsdmTNJkVbZziCMOxNA5q0h3vXRYHoVRh0/edit?gid=1098908424#gid=1098908424
https://course-resources.minervaproject.com/uploaded_files/production/00230028-2556/note-on-the-dupont-analysis.pdf
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