Question

THIS IS THE COMPLETE QUESTION!!

Procter & Gamble Company reports the following table in its 10-K report relating to the change in sales from 2017 to 2018.

Net Sales Growth 996 Net Sales Change Drivers 2018 vs. 2017 Foreign Volume Exchange Price Mix Beauty 296 296 5% Grooming 396 (3)% (1)96 Health care 396 396 (1)96 Fabric & home care 396 196 (1) Baby, feminine & family care (1)96 19 (1) Total company 196 296 (1) 196 (1)96 596 396 (1)% 396 a. Did total company net sales increase or decrease during the year? By what percentage did net sales increase (or decrease)? Do not use a negative sign with your answer to indicate a decrease. % b. What was the effect of foreign exchange rates on sales during the year? Foreign exchange rates caused sales to by %. From this result, what can we infer about the relative strength of the $US during the period? During the year, Othe U.S. dollar strengthened vis-à-vis the currencies in which P&G does business. Othe U.S. dollar weakened vis-à-vis the currencies in which P&G does business. c. The Grooming and the Baby, Feminine & Family Care segment sales both decreased by 1%. From this result, can we conclude that the dollar decrease in sales was the same for both segments? OYes, since both segments' sales decreased by the same percentage, the dollar amounts in sales were the same. ONo, the decrease is relative to each segment's sales. Both segments could have different sales levels but the same percentage change.

Answer 1

a. Total company Net Sales Increases During the year. The main reason for such increase can be increase in foreign exchange.

By 3% Net Sales increases.

b. Foreign Exchange rate caused sales to increase by 2%.

During the year, the US dollar weakened vis-a-vis the currencies in which P&G does business, as due to weakened dollar P&G would receive more dollars on exchange.

c. No, the decrease is relative to each segment sales. Both segments could have different sales levels but same percentage change. Dollar decrease in sale cannot be considered as same for both the segments. Segments may earn different amount of Dollars. However, % decrease in sales could be the same for both the segments.