PG: Financial Gauge Analysis for the June 2009 Quarter (Updated)

We previously posted Procter & Gamble's (NYSE: PG) preliminary Financial Gauge scores for the June 2009 quarter.  We also listed the financial metrics that determined the scores.  The results took into account the financial statements in P&G's earnings announcement. 

P&G later filed a 10-K annual report with much more detail, including a complete Balance Sheet and the first characterization of P&G's inventory at the end of June 2009.  We used this additional information to recompute the scores and metrics.

As it happens, the data in the 10-K did not change the gauge scores from our initial report.

• Cash Management: 5 of 25 (down from 6 in March)
  
• Growth: 1 of 25 (down from 6)
  
• Profitability: 6 of 25 (down from 7)
  
• Value: 20 of 25 (down from 23)
  

• Overall: 44 of 100 (down from 52)

However, some of the financial metrics did change by minor amounts.  The 10-K also gave us a chance to collect some historical figures that were restated after the sale of the Folgers coffee business to J.M. Smucker (NYSE: SJM).

For the record, the latest set of data is listed below.

Cash Management	Jun 2009	Mar 2009	Jun 2008	5-Yr Avg
Current Ratio	0.7	0.7	0.8	0.9
LTD/Equity	32.7%	33.7%	33.9%	46.1%
Debt/CFO (years)	2.5	2.8	2.4	2.8
Inventory/CGS (days)	71.8	72.8	70.3	68.5
Finished Goods/Inventory	67.6%	66.7%	64.0%	66.4%
Days of Sales Outstanding (days)	29.1	28.5	29.9	30.0
Working Capital/Invested Capital	-9.4%	-11.4%	-6.3%	-5.8%
Cash Conversion Cycle Time (days)	38.6	51.9	44.8	52.8
Gauge Score (0 to 25)	5	6	5	3

	Jun 2009	Mar 2009	Jun 2008	5-Yr Avg
Revenue growth	-3.3%	1.4%	6.9%	9.1%
Revenue/Assets	56.7%	58.5%	58.0%	67.1%
Operating Profit growth	9.9%	13.6%	19.1%	14.4%
CFO growth	-0.6%	-6.9%	11.9%	16.2%
Net Income growth	-4.3%	5.9%	14.1%	18.4%
Gauge Score (0 to 25)	1	6	13	10

1. Revenue, CFO, and Net Income growth rates compare the last four quarters to the four previous quarters.  The Operating Profit rate is the annualized rate of growth in Operating Profit after Taxes over the last 16 quarters.

Profitability	Jun 2009	Mar 2009	Jun 2008	5-Yr Avg
Operating Expenses/Revenue	79.6%	80.0%	79.6%	80.2%
ROIC	12.0%	12.5%	12.6%	14.4%
Free Cash Flow/Invested Capital	11.8%	10.5%	12.0%	13.6%
Accrual Ratio	0.6%	2.1%	-0.3%	-0.1%
Gauge Score (0 to 25)	6	7	9	9

Value	Jun 2009	Mar 2009	Jun 2008	5-Yr Avg
P/E	11.8	10.5	16.5	20.4
P/E vs. S&P 500 P/E	0.5	0.6	0.9	1.2
PEG	1.2	0.8	0.8	1.1
Price/Revenue	2.0	1.8	2.4	2.7
Enterprise Value/Cash Flow (EV/CFO)	12.8	13.1	15.5	16.7
Gauge Score (0 to 25)	20	23	12	6

Overall	Jun 2009	Mar 2009	Jun 2008	5-Yr Avg
Gauge Score (0 to 100)	44	52	40	27

Full disclosure: No position in PG at time of writing.