financial reporting problem the procter amp gamble company p amp g the financial sta 1574421

Financial Reporting Problem

The Procter & Gamble Company (P&G)

The financial statements of P&G are presented in Appendix 5B. The company’s complete annual report, including the notes to the financial statements, can be accessed at the book’s companion website, www. wiley.com/college/kieso.

Instructions

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

(a) What type of income statement format does P&G use? Indicate why this format might be used to present income statement information.

(b) What are P&G’s primary revenue sources?

(c) Compute P&G’s gross profit for each of the years 2009–2011. Explain why gross profit decreased in 2011.

(d) Why does P&G make a distinction between operating and non-operating revenue?

(e) What financial ratios did P&G choose to report in its “Financial Summary” section covering the years 2001–2011?