Case Analysis of Procter and Gamble

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Question 1 What is the nature of this company’s operations? P & G primarily provides branded consumer goods. They operate under three general business units: beauty and health, household care, and Gillette. Beauty, healthcare, fabric care and home care, baby and family care, snacks, coffee, and pet care, blades and razors, and Duracell and Braun all fall under one of these three general business units. (Page 31) Question 2 Does the company do business domestically and/or internationally? P & G markets its goods both domestically as well as internationally. Their products have presence in over 180 countries where they appear primarily in high frequency stores. They have actual operations in over 80 countries. (Page 31)…show more content…
P & G’s three larges asset account balances are goodwill, trademarks and other intangible assets, and machinery and equipment. These assets’ fair value will always be more than the balance of the asset account because net book value equals original cost minus accumulated depreciation. Also in the case of real estate the actual purchase price and what the real estate is worth today will greatly differ especially if the property was purchased some years ago. (Page 50, Page 200 textbook) Question 12 What are the company’s total current assets? P & G’s total current assets are $24, 031 million. (Page 50) Question 13 What cost flow assumption does this company use to price its inventories? P & G uses the first-in, first-out method for product related inventories, last-in, first-out method for minor amounts of product such as cosmetics and commodities, and the average cost method for the cost of spare parts. (Page 55) Question 14 What are the total current liabilities of the company? P & G’s total current liabilities are $30,717 million. (Page 51) Question 15 Identify the types and amounts of property, plant, and equipment, if any, as well as any related accumulated depreciation accounts. P & G considers buildings, machinery and equipment, and land as its property, plant, and equipment. The total amount for buildings is $6,380 million, total amount for machinery and equipment is $27,492 million, and the

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