Colgate-Palmolive Company Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Colgate-Palmolive Company Case Solution

Leverage Ratio

A Leverage Ratio is one of many financial estimates, which-knows how much money comes in the form of a loan, which evaluates the company's ability to meet its financial requirements. The worth rating type is important because firms-depend on the worth and due ratios to keep operating. By having the knowing of the amount that is due by the company, helps in assessing whether it can repay its dues or not. And by looking at leverage ratios of the Colgate Firm, it shows a figure of 0.93, as it had more assets than liabilities in 2020, and in comparison to the Johnson & Johnson; the Colgate Firm has more good Total liabilities to Total Assets.

Profitability Ratios

Profitability is the financial standard used by researcher and investors to calculate and find the firm's-capacity to produce Sales (profit) in connection to the revenue, balance sheet and valuation of investors over a period of time. Greater or higher ratios for most firms, as it means that the firm is doing well in terms of sales, income and generating cash. This ratio is very helpful when analyzed in differentiating with the same companies. The profitability ratios exactly shows that the Colgate firm has good Return on Assets Ratio, which means if the company values its assets; it will get much better returns than the Johnson & Johnson firm.

Market Multiples

A market-multiples is used for relative processing that seeks to evaluate the similar companies using the same financial indicators.

Investors also mentioned the method of enlarging as the analysis of addition or multiplication increase of prices. By doing so, they might have the estimation of a financial measure, such as: the price to pay (P / E), as a general accession. The Colgate firm has earned 3.15 per share, which it had sold in 2020 as it had 2,000,000,000, out of which 1,465,706,360 were issued.

DuPont Ratio

The DuPont Analysis (also known as the DuPont or the DuPont design) is a structure for judging the basic performance increased by the DuPont Corporation. DuPont analysis is a helpful method, which is used in breaking down various operators of (ROE).The Colgate Firm has good DuPont ratio as compared to the Johnson & Johnson Firm, i.e. 2.60 in 2020. By looking at all these ratio; it can be stated that the Colgate is performing well in terms of returns of its as increasing in sales etc.

Company’s Valuation

Colgate-Palmolive shows the current real value of $5.07 or 372 per share. At this time, the firm seems to be well- appreciated. My calculations suggest that Colgate&Palmolive values on a hard basis examination,such as: Profit Margin of 61%, return on Assets of 17%, and the current revenue of 12.28 billion,testing its practical measure and the probability of insolvency. In general, I would like to suggest that with the passage of time; the company’s assets and revenue will increase. The current pandemic has affected the operations and profitability of every company on a global scale, which includes the negative impact that the virus has lasted on the revenues of Colgate & Palmolive as well,but I think Colgate is a well-known and a reputable brand, which has the potential to succeed in increasing its revenues as the grip of Covid-19 loosens. And the stock price is overvalued because the market price is 78 and based on my calculation; the market value on per share is 372.

Recommendation

Colgate-Palmolive is a usual name for many financers. Investing in companies that are as well-known and successful as Colgate-Palmolive has the higher chances to turn out to be a better and profitable decision, and investing in such strengthened companies is one of the most important investment guiding principles. However, just getting used to it is not enough to determine whether stock is a good investment; I would definitely buy Colgate’s stock by looking at its assets and its returns, which seems to be good.......................

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Colgate-Palmolive Company Harvard Case Solution & Analysis