The following data were obtained prior to the acquisition of Gil- lette Company by Procter &...
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The following data were obtained prior to the acquisition of Gil- lette Company by Procter & Gamble. Gillette Company, the Procter & Gamble Company, and Colgate-Palmolive Company are three firms in the personal care consumer products industry. During the prior year, the average return on equity for the personal care consumer products indus- try was 28.1 percent. In the same year, the relevant financial data for Gillette, Procter & Gamble, and Colgate-Palmolive were as follows (in millions): Stockholders' equity, beginning Stockholders' equity, ending. Net income... Gillette 1,397.2 1,380.0 426.9 Procter & Gamble 5,472.0 6,890.0 2,211.0 Colgate- Palmolive 2,201.5 1,460.7 548.1 Required a. Calculate Gillette Company's return on equity. b. Evaluate Gillette Company's return on equity by comparing it with the following: The average for the personal care consumer products industry. 1. 2. The return earned by the Procter & Gamble Company. 3. The return earned by Colgate-Palmolive Company. The following data were obtained prior to the acquisition of Gil- lette Company by Procter & Gamble. Gillette Company, the Procter & Gamble Company, and Colgate-Palmolive Company are three firms in the personal care consumer products industry. During the prior year, the average return on equity for the personal care consumer products indus- try was 28.1 percent. In the same year, the relevant financial data for Gillette, Procter & Gamble, and Colgate-Palmolive were as follows (in millions): Stockholders' equity, beginning Stockholders' equity, ending. Net income... Gillette 1,397.2 1,380.0 426.9 Procter & Gamble 5,472.0 6,890.0 2,211.0 Colgate- Palmolive 2,201.5 1,460.7 548.1 Required a. Calculate Gillette Company's return on equity. b. Evaluate Gillette Company's return on equity by comparing it with the following: The average for the personal care consumer products industry. 1. 2. The return earned by the Procter & Gamble Company. 3. The return earned by Colgate-Palmolive Company.
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a To calculate Gillette Companys return on equity we can use the formula Return on equity Net income ... View the full answer
Related Book For
Financial and Managerial Accounting
ISBN: 978-1285078571
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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