The Procter & Gamble Company Essay

Words: 3913
Pages: 16
Open Document
Case study

at BI Norwegian Business School

- Case 1: The Procter & Gamble Company: Mexico 1991-

Exam code and name:
GRA 6544 – Multinational Corporate Finance

Hand out date:
11.09.2012

Hand in date:
25.09.2012

Study place:
BI Oslo

Table of Contents Abstract: ii 1. Mexican economic conditions 1 a. Change in Mexican economic and political conditions during the 1970s and 1980s 1 b. Mexico’s economic and political climate in 1991 2 2. Financing options 2 3. Financing risk, foreign exchange risk and business risk 8 4. Attractiveness of Mexico’s capital market 9 5. Conclusion: 10 References: 11

Abstract:
Procter & Gamble (P&G) needs to borrow an average of $55 million over the next …show more content…
(www.naftanow.org) This set of undertakings resulted in regained economic growth (estimated expansion in GDP by 4%-5 %), increased social spending and a huge drop in inflation (to 8% per 22.09.1991 from 52% in 1988).

2. Financing options
In order to pursuit its growth strategy in Mexico, Procter & Gamble (P&G) has four financing options available: a loan in Peso, a guaranteed dollar loan, an unguaranteed dollar loan, or a guaranteed medium-term maturity debt note (MTN).

Our analysis yields four comparative tables, containing forecasted figures on the fours different scenarios. The comparison of the four financing options entails a common approach to the analytical problem and it is based on calculating the final after-tax cost of each scenario. Exhibit 9 serves as a basis for the inputs regarding the average amount of outstanding debt, the choice of interest rates, the size of the devaluation effect, and the applicable tax rate. The pretax cost of debt is simply the sum of the interest expense, the structuring fee, and the devaluation effect. The applicable tax rate amounts to 10% social contribution together with 35% income tax, a total of 45%. The inflationary component tax (ICT) is calculated as the tax rate times estimated inflation rate times average outstanding debt. The ICT stems from the
Show More

Related Documents: The Procter & Gamble Company Essay

Analyzing the Annual Report Essay

Writing Assignment: Analyzing the Annual Report Procter & Gamble is the world’s largest packaged goods company. Its products range from pet foods and cleaning agents, to personal care products. It is so big and profitable that its products are sold in more than 180 countries. To highlight the aforementioned successes and to target its investors, Procter and Gamble developed a 92-page 2012 annual report. In its report, Procter and Gamble uses the following three verbal and visual strategies: descriptive…

Words 684 - Pages 3

procter and gamble Essay examples

Background of the company Procter and Gamble was first founded in 1837 by William Procter and James Gamble. P&G carries about more or less than 50 top names products with the headquartered located in Cincinnati. Procter and Gamble is one of Americas largest company that sells multinational consumer goods. The product ranges varies from personal care, pet foods, diapers, cleaning supplies, medications and etc. The hundreds of different brand that P&G carries is available all around the world in more…

Words 608 - Pages 3

Proctor and Gamble Essay

Procter and Gamble as a whole, is the world’s largest and most profitable consumer products company. With domination in the realms of shampoos, fragrances, cosmetics, shaving, pharmaceuticals, and fabric care, Procter and Gamble has acquired a total market capitalization value of 200 billion dollars. Household and fabric care being P&G’s largest segment; it holds responsibility for almost half of Procter and Gamble’s revenue. Beauty, cosmetics, and grooming second largest and health care last…

Words 410 - Pages 2

AI FND153 W2 A2 Crabtree T Essay

(competition). Strategic and operational business information reported subjectively kept short and simple. Procter & Gamble SWOT Analysis Strength 1. Strong brands 2. Worlds largest manufacturer. 3. Reasonable pricing 4. Global exposure. 5. Its products are sold in180 countries 6. Distribution channels including mass merchandisers and grocery stores 7. Innovative unique product Weaknesses 1.The company continues to rely heavily on mature markets. 2.The emerging markets will outperform mature markets…

Words 946 - Pages 4

Intro: Procter & Gamble and Membership Club Stores Essay

Purpose Of Procter and Gamble organisation We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper. PG ABOUT The Procter & Gamble Company (P&G) is focused on providing consumer packaged goods. The Company’s products…

Words 705 - Pages 3

Essay on Marketing Strategy: Tide Detergent

Marketing Strategy for Procter & Gamble’s Tide® Liquid Laundry Detergent Measure Trigger Paul Lane Marketing 1001 Professor Norman Hansen February 20, 2010 Abstract Procter & Gamble (P&G) and its competitors package laundry detergents in various sizes and packaging alternatives. Tide® liquid laundry detergent is available in sizes ranging from 40 ounces (25 loads) to 150 ounces (96 loads). Current packaging requires lifting and pouring from bottles weighing over nine…

Words 1478 - Pages 6

procter & gamble Essay

SERELS Managing with Analytics at Procter & Gamble Alan Torres, vice-president of North America Fabric Care at Procter & Gamble (P&G), watched and listened as his embedded IDS analyst, Julia Wright, graphically displayed the initial results. Torres leaned back to take in the complete set of 12 graphs and charts on the massive 8-foot by 32foot screens in a specialized meeting room called a Business Sphere at P&G’s headquarters in Cincinnati, Ohio. The company had introduced a more concentrated…

Words 7920 - Pages 32

Innovation and Change - P & G Essay

Business Innovation and Creativity Proctor and Gamble (P & G) was established in Cincinnati in 1837 by William Proctor and James Gamble manufacturing Soap and Candles. The partners grew the business from strength to strength through ingenious innovations, with the help of successive generations then through none family management to create the $70 billion enterprise. P & G is a business where innovation flows throughout every sector both internally and externally, from suppliers to distributors…

Words 603 - Pages 3

Essay on MARKETING 301 PRELIMINARY REPORT

Michael B Jones Description of the Firm and Its Strategy Procter and Gamble (P&G) is the world's largest consumer goods company and owns twenty-four brands comprising a wide variety and substantial number of products. Their products are sold in “140 countries and employ almost 140,000 people in 80 countries worldwide” (Osborne 1). “Three billion times a day, P&G brands touch the lives of people around the world” (“Procter & Gamble”). Their “corporate tradition is rooted in the principles of…

Words 3950 - Pages 16

Colgate Max Fresh: Global Brand Roll-Out Essay

Colgate Max Fresh: Global Brand Roll-Out Nigel Burton, the president of global oral care at Colgate-Palmolive Company (CP), is reviewing market launch plans for a new toothpaste, Colgate Max Fresh (CMF) by CP’s Chinese and Mexican subsidiaries. Both launch plans involved departures from the CMF marketing program for the USA launch six months earlier. Burton must decide whether the costs of marketing program adaptation in China and Mexico can be justified. “Was CMF launched in the U.S. with…

Words 1080 - Pages 5