Colgate-Palmolive Procter & Gamble

Accounting 647 Analyst Project and Opinion December 4, 2009

Pradnya Deshpande | Eric Ponzio | Mehgan Klare | Kim Wilken | Scott Musser

merged 1928 ‡ Initial Products: Soap. Source: Hoovers Online . Candles. ‡ Expanded by acquiring firms internationally.Colgate-Palmolive ‡ Founded by William Colgate in 1806 ± Palmolive founded by B. Starch. Toothpaste in Jars. and sells in about 200 countries. Johnson in 1864.J. ‡ Consumer Products Soap and Other Detergent Manufacturing ‡ Operations in more than 70 countries.

Colgate-Palmolive ‡ In 2008. completed a four year restructuring plan designed to: ± Reduce workforce ‡ Shut down 25 out of 78 factories ‡ Reducing 12% of workforce ± Increase profitability ± Reallocate resources to support expected growth ± Leverage global market efficiencies Source: Hoovers Online .

Procter & Gamble ‡ Founded in 1837 by William Procter (candle maker) & James Gamble (soap maker) ‡ Initial Products: Ivory Soap and Crisco Shortening ‡ 1947 Tide Detergent becomes a staple of the company. Source: Hoovers Online . company grew and diversified through aggressive acquisition strategy. ‡ After developing Tide.

in 2005 ‡ Reorganization strategy (2007) has enabled PG to react quickly and strategically in its industries Source: Hoovers Online .Procter & Gamble ‡ Divided into three global units ± Health and Well-being ± Beauty ± Household Care ‡ Consumer Products Soap and Other Detergent Manufacturing ‡ Purchased Gillette Company for $57 Bn.

6 .0% ± Beta: Colgate=0.Key Assumptions ‡ ‡ ‡ ‡ ‡ Forecasts based on sales growth (Jefferies) Operating items grown at percent of sales Non-operating items held constant Target cash balance and financial plug WACC ± Risk Free Rate 3.5% ± Market Premium 5.725. P&G=0.

Financial Comparison 80.000 Source: Hoovers Online Revenue ($ Mil.000 70.) .000 10.000 20.) Operating Income ($ Mil.000 50.000 60.) Total Net Income ($ Mil.000 40.000 Procter & Gamble Colgate-Palmolive 30.) Gross Profit ($ Mil.

48% 1.Financial Comparison ROE ROA Current Ratio Quick Ratio X Interest Earned Altman Z-Score 20.26 0.27% 9.71 0.64% 0.75 .74 31.60 6.87 2.20% 19.35 11.72 93.

Stock Price Comparison Source: Yahoo Finance Charts .

Stock Price Comparison Source: Yahoo Finance Charts .

87 2.000 70.000 60.27% Colgate-Palmolive 9.71 0.72 93.20% 19.26 0.Analyst Opinion 80.000 40.74 31.64% 0.75 .000 - Procter & Gamble ROE ROA Current Ratio Quick Ratio X Interest Earned Altman Z-Score 20.000 10.48% 1.000 30.000 50.60 6.35 11.000 20.