Colgate P&G comparative analysis
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Colgate P&G comparative analysis

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Compared Financial ratios and statements. Evaluated capital structure, fund flow and working capital flow. Forecasted financials of the next 3 years. Calculated the market Beta and WACC.

Compared Financial ratios and statements. Evaluated capital structure, fund flow and working capital flow. Forecasted financials of the next 3 years. Calculated the market Beta and WACC.

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Colgate P&G comparative analysis Colgate P&G comparative analysis Presentation Transcript

  • Procter& Gamble
    Colgate-Palmolive
    Accounting 647 Analyst Project and Opinion
    December 4, 2009
    Pradnya Deshpande | Eric Ponzio| Mehgan Klare | Kim Wilken | Scott Musser
  • Colgate-Palmolive
    Founded by William Colgate in 1806
    Palmolive founded by B.J. Johnson in 1864; merged 1928
    Initial Products: Soap, Candles, Starch, Toothpaste in Jars.
    Expanded by acquiring firms internationally.
    Consumer Products – Soap and Other Detergent Manufacturing
    Operations in more than 70 countries, and sells in about 200 countries.
    Source: Hoovers Online
  • 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
    View slide
  • 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.
    After developing Tide, company grew and diversified through aggressive acquisition strategy.
    Source: Hoovers Online
    View slide
  • 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. in 2005
    Reorganization strategy (2007) has enabled PG to react quickly and strategically in its industries
    Source: Hoovers Online
  • 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 5.0%
    Beta: Colgate=0.725, P&G=0.6
  • Financial Comparison
    Source: Hoovers Online
  • Financial Comparison
  • Stock Price Comparison
    Source: Yahoo Finance Charts
  • Stock Price Comparison
    Source: Yahoo Finance Charts
  • Analyst Opinion
    Buy Colgate-Palmolive