Question

Refer to P&G's financial statements and the accompanying notes to answer the following questions.

1. What type of income statement format does P&G use? Indicate why this format might be used to present income statement information.
2. What are P&G's primary revenue sources?
3. Compute P&G's gross profit for each of the years 2012–2014. Explain why gross profit decreased in 2014.
4. Why does P&G make a distinction between operating and nonoperating revenue?
5. What financial ratios did P&G choose to report in its “Financial Summary” section covering the years 2009–2014?

Answer 1

P&g uses a mix of comparative and condensed income statement.

2013 20l2 3ry 753 Oj Cad 58308296 y( 8129 202 20322 creasedm pear lows eCr ar On enj es venve as-there is rno mer hetueen everve earned to Show its seperde sovrce hetter pesenation of f

as the size of company is big so it uses condensed income statement which presents all the items in ne line like one for sales, one for cost of goods sold etc.also the company uses comparative statement for comparison purposes across time periods.

primary source of revenue for p&g is b2c model i.e. they manufacture their own goods to sell to customers.mainly they deal in grooming products and healthcare for which a major market for them is children.