Procter and Gamble research report Term Paper Example | Topics and Well Written Essays - 1250 words

Procter and Gamble research report - Term Paper Example The company management has responded to investors worry on costly structure and slow top line growth rate by through a cost saving plan worth $10 billion. This is expected to reduce the headcount that will enable the company achieve its earning per share growth rate forecast to 8% and 10% in free up funds that can be reinvested. Third quarter results shows that the organic sales have increased by 3% from its previous quarter but the operating profit decreased by 11%. The management of the company lowered the earning per share to $3.82-$3.88 from the previous earning of $3.93-$4.08 as a result of the lowering operating profit. This means that Procter and Gambler 2012 fiscal year earning per share is expected to remain flat as compared to previous fiscal EPS of $3.87. The company gross margin has decreased by 150 bases to 49% on higher inputs and negative sales while it has increased by 32.9% on restructuring charges and overhead costs. The firm is supposed to restructure if it expects to gain full potential in its future growth. This is to be achieved by mean of calibrating its pricing by either adopting initial price or by promotion. Also, the company should invest more in the developing markets where it remains under penetrating where all other firms in packaged goods are moving. Business summary Procter & Gamble Company has famous line up of packaged brands which are sold and distributed through three global business units in over 180 countries world wide. The company brands include Tide laundry detergent, Pantene shampoo, Cover Girl cosmetics and lams pet food which means the company trades in household and personal products industry. The company is rated as an AAA credit worth company by Morningstar credit rating agency in the consumer product industry. The company strength and sustainability compared to other industry player has being rated wide by Morningstar which means its competitive advantage remains high. The competitors of the company are L’Oreal SA, Reckitt Benckiser Group and Kimberly-Clark Corporation which have market capitalization of $72,309, $47720, $42799 and $30972 millions respectively compared to Procter $ Gamble CO. market capitalization of $176134 millions. This shows that Procter & Gamble Company is more capitalized than its closest rival compa nies. Also, the sales revenue of its competitors are $26745.83, $15196.91 and $20,846 respectively compared to Procter $ Gamble sales revenue of $85374. Total sales revenue in the industry from the above sales revenues amounts to $148162.74. Procter & Gamble Co. thus, it contributes 57.62% of the total sales revenue. From the above findings, Procter $ Gamble Company stands as the most valued company compared to its competitors. Historical performance of the company shows that the performance of the company has being on a decline path from year 2009 to date. Financial forecasting of the company is that the share value is to be raised from the current price of $72 to $75 if the $10 billion saving plan is implemented together with Pringles divesture. This implies that in 2013, ratios of