Question

Obtain a copy of Colgate’s annual report from the Ashford Online Library or from a valid academic source found elsewhere on the Internet. If researching online, go to the Colgate (Links to an external site.) company website. In your initial post, use the ratios discussed in Chapter 11 (dividend payout ratio and return on common stockholders’ equity) to evaluate Colgate’s dividend and earnings performance from a stockholder’s perspective. Your answer should illustrate understanding of dividend ratios and return on equity ratios, an analysis of financial statements.

Answer 1

Ten-year Highlights
colgate palmolive
Lacs	Net Profit After Tax	SHAREHOLDERS’ FUNDS	return on equity	growth
2005-06	13760	27107	50.7617958
2006-07	16017	28052	57.0975332	12.48%
2007-08	23171	16221	142.845694	150.18%
2008-09	29022	21630	134.174757	-6.07%
2009-10	42326	32611	129.790561	-3.27%
2010-11	40258	38405	104.824893	-19.24%
2011-12	44647	43539	102.544845	-2.18%
2012-13	49675	48959	101.462448	-1.06%
2013-14	53987	59988	89.9963326	-11.30%
2014-15	55598	77032	72.1751999	-19.80%

Colgate palmolive return on equity has decreased over the year if you will observe you will find that growth rate in return on equity is negative due to icrease in shareholders fund and not due to decrease in profits. Growth in shareholders funds is higher in comparison of growth of net profit after tax

Earning per share

Lacs	dividend	EPS	dividend payout ratio	growth
2005-06	7.5	10.12	74.1106719
2006-07	9.5	11.78	80.6451613	8.82%
2007-08	13	17.04	76.2910798	-5.40%
2008-09	15	21.34	70.2905342	-7.87%
2009-10	20	31.12	64.2673522	-8.57%
2010-11	22	29.6	74.3243243	15.65%
2011-12	25	32.83	76.1498629	2.46%
2012-13	28	36.53	76.6493293	0.66%
2013-14	27	39.7	68.0100756	-11.27%
2014-15	24	41.1	58.3941606	-14.14%

company dividend payout ratio has increased over the year except in the year of 13-14 & 14-15 due to the increase in number of issued common stock.

In general we can say that it is a good investment in the share of colgative palmolive from the study of dividend payout ratio and return on equity for an investor