Stock Analysis on Net

Procter & Gamble Co. (NYSE:PG)

Return on Capital (ROC)

Microsoft Excel

Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.


Return on Invested Capital (ROIC)

Procter & Gamble Co., ROIC calculation

Microsoft Excel
Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 15,111 14,689 14,588 14,283 12,785 3,768
Invested capital2 97,641 96,550 93,924 95,095 101,100 89,875
Performance Ratio
ROIC3 15.48% 15.21% 15.53% 15.02% 12.65% 4.19%

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

1 NOPAT. See details »

2 Invested capital. See details »

3 2024 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 15,111 ÷ 97,641 = 15.48%

Performance ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. Procter & Gamble Co. ROIC deteriorated from 2022 to 2023 but then improved from 2023 to 2024 not reaching 2022 level.

Decomposition of ROIC

Procter & Gamble Co., decomposition of ROIC

Microsoft Excel
ROIC = OPM1 × TO2 × 1 – CTR3
Jun 30, 2024 15.48% = 22.90% × 0.86 × 78.52%
Jun 30, 2023 15.21% = 23.00% × 0.85 × 77.90%
Jun 30, 2022 15.53% = 22.79% × 0.85 × 79.81%
Jun 30, 2021 15.02% = 23.52% × 0.80 × 79.77%
Jun 30, 2020 12.65% = 22.81% × 0.70 × 78.99%
Jun 30, 2019 4.19% = 9.38% × 0.75 × 59.33%

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

1 Operating profit margin (OPM). See calculations »

2 Turnover of capital (TO). See calculations »

3 Effective cash tax rate (CTR). See calculations »

The primary reason for the increase in return on invested capital (ROIC) over 2024 year is the increase in efficiency measured by turnover of capital (TO) ratio.


Operating Profit Margin (OPM)

Procter & Gamble Co., OPM calculation

Microsoft Excel
Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 15,111 14,689 14,588 14,283 12,785 3,768
Add: Cash operating taxes2 4,135 4,168 3,691 3,623 3,400 2,583
Net operating profit before taxes (NOPBT) 19,246 18,858 18,279 17,906 16,184 6,350
 
Net sales 84,039 82,006 80,187 76,118 70,950 67,684
Profitability Ratio
OPM3 22.90% 23.00% 22.79% 23.52% 22.81% 9.38%

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2024 Calculation
OPM = 100 × NOPBT ÷ Net sales
= 100 × 19,246 ÷ 84,039 = 22.90%

Profitability ratio Description The company
OPM The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. Procter & Gamble Co. OPM improved from 2022 to 2023 but then slightly deteriorated from 2023 to 2024.

Turnover of Capital (TO)

Procter & Gamble Co., TO calculation

Microsoft Excel
Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Selected Financial Data (US$ in millions)
Net sales 84,039 82,006 80,187 76,118 70,950 67,684
Invested capital1 97,641 96,550 93,924 95,095 101,100 89,875
Efficiency Ratio
TO2 0.86 0.85 0.85 0.80 0.70 0.75

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

1 Invested capital. See details »

2 2024 Calculation
TO = Net sales ÷ Invested capital
= 84,039 ÷ 97,641 = 0.86

Efficiency ratio Description The company
TO The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. Procter & Gamble Co. TO deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

Effective Cash Tax Rate (CTR)

Procter & Gamble Co., CTR calculation

Microsoft Excel
Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 15,111 14,689 14,588 14,283 12,785 3,768
Add: Cash operating taxes2 4,135 4,168 3,691 3,623 3,400 2,583
Net operating profit before taxes (NOPBT) 19,246 18,858 18,279 17,906 16,184 6,350
Tax Rate
CTR3 21.48% 22.10% 20.19% 20.23% 21.01% 40.67%

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2024 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 4,135 ÷ 19,246 = 21.48%

Tax rate Description The company
CTR Effective cash tax rate on operating income. Procter & Gamble Co. CTR increased from 2022 to 2023 but then slightly decreased from 2023 to 2024.