Proctor and Gamble 2007 Annual Report Download - page 23

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
Total Shareholder Return (TSR) is a key measure of business performance
and management evaluation and compensation. It is a cash ow return
on investment (CFROI) tool that ensures P&G’s businesses are focused on
the key drivers of shareholder value creation: sales growth, prot margin
improvement and asset efciency.

We improve the return on assets by making
disciplined choices about where to invest
cash and how to maximize the productivity
of our assets. In manufacturing, we optimize
production line capacity utilization rates.
In working capital, we lower inventory levels,
increase payables, and maintain our industry-
leading receivables levels.

We improve prot margin by driving out
costs and complexities that do not add
value for consumers or retail customers.
We do this by leveraging P&G’s signicant
manufacturing and purchasing scale,
by maximizing the return on marketing
investments and by constantly improving
organizational effectiveness and productivity.
Total
Shareholder
Return











We grow sales organically by building market
share where brands are currently sold,
expanding existing products into new markets
and creating entirely new consumer product
categories. In addition, we regularly make
strategic acquisitions that enhance our product
portfolio and provide new opportunities
for growth.
The Procter & Gamble Company 21