The 2015 annual report of The Procter & Gamble Company (P&G) is available at www.pginvestor.com. After reviewing P&G’s annual report, respond to the following questions:

a. P&G’s 2015 statement of cash flow is presented using the indirect method format. Calculate P&G’s cash conversion ratio for 2015. What does the cash conversion ratio tell you about P&G’s operating revenues?Is this good news or bad news? Why?

b. Calculate P&G’s EBITDA, free cash flow, and discretionary cash flow for 2013, 2014, and 2015. What can you conclude about P&G’s cash position from these measures?

c. Calculate P&G’s sustainable earnings before taxes for 2013, 2014, and 2015. What can you conclude about the persistence of P&G’s earnings?