Interpreting Foreign Translation Disclosure | Procter & Gamble Company

Interpreting Foreign Translation Disclosure Procter & Gamble Company reports the following table in its 10-K report relating to the change

Interpreting Foreign Translation Disclosure
Procter & Gamble Company reports the following table in its 10-K report relating to the change in sales from 2015 to 2016.

 

Net Sales Change Drivers 2016 vs. 2015

   

Volume

Foreign

Exchange

 

Price

 

Mix

Net Sales

Growth

Beauty (3)% (4)% 2% (7)%
Grooming (2)% (7)% 5% (2)% (6)%
Health care (2)% (4)% 2% 1% (3)%
Fabric & home care (1)% (4)% (5)%
Baby, feminine & family care (3)% (4)% (7)%
Total company (3)% (4)% 1% (6)%

 

(A) Did total company net sales increase or decrease during the year? 
Answer = Decrease

By what percentage did net sales increase (or decrease)?

Answer = 06%

(B) What was the effect of foreign exchange rates on sales during the year?

Foreign exchange rates caused sales to

Answer = decrease

by Answer = 04%.

(C) From this result, what can we infer about the relative strength of the $US during the period?

During the year,

the U.S. dollar strengthened vis-à-vis the currencies in which P&G does business.

the U.S. dollar weakened vis-à-vis the currencies in which P&G does business.

The correct answer is: the U.S. dollar strengthened vis-à-vis the currencies in which P&G does business.

(D) The Beauty and the Baby, Feminine & Family Care segment sales both decreased by 7%. From this result, can we conclude that the dollar decrease in sales was the same for both segments?

Yes, since both segments’ sales decreased by the same percentage, the dollar amounts in sales were the same.

No, the decrease is relative to each segment’s sales. Both segments could have different sales levels but the same percentage change.

The correct answer is: No, the decrease is relative to each segment’s sales. Both segments could have different sales levels but the same percentage change.

 

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