Procter & Gamble’s profitability review shows a fluctuating trend. The Net Profit Margin declined slightly from 18.47% in 2020 to 17.82% in 2024.
The average EBIT Margin across the period was strong at 22.42%.
However, interest coverage weakened, falling from 33.78 times in 2020 to 20.05 times in 2024, though it still reflects a solid ability to meet interest obligations.
Asset turnover improved from 0.59 in 2020 to 0.69 in 2024, indicating a fair efficiency in utilizing assets to generate revenue
Profitability
Procter & Gamble’s revenue has shown fluctuations over the review period. The company recorded a 16.57% increase between 2020 and 2021, followed by a strong 22.70% rise between 2022 and 2023, and a further 24.16% increase in the current period (2023–2024).
Despite the volatility, profitability performance remains solid, with the return on capital employed reflecting strong efficiency and good overall results during the analysis period.
Liquidity
The company’s liquidity position remains weak, despite a slight improvement in the current ratio from 0.63:1 to 0.73:1 in the last year. This still indicates that the business does not hold sufficient current assets to cover its short-term liabilities, highlighting ongoing challenges in meeting immediate financial obligations
Capital Structure
Procter & Gamble is financed through a combination of equity and debt.
Although the debt-to-equity ratio has fluctuated year on year, the company’s gearing remains high at 142% in the current year. This indicates a significant reliance on debt financing relative to equity, which elevates financial risk despite the mixed trend in leverage
