Accounting Case Study on General Mills General Mills, Inc. Financial Accounting Case Study Module 1: A. General Mills Consolidated Statements of Earnings: 1. The recorded sale amount of almost $8 billion is not the actual amount of cash collected. The amount of $8 billion includes cash and credit sales. 2. Sales increased each year from 2000 to 2002. The difference between the year 2000 and 2001 was a 5.35% increase (5,450-5,173/5,173 = .0535). The difference between the year 2001 and 2002 was a 45.85% increase (7,949-5,450/5,450 = .4585). 3. The largest expense for General Mills for the years 2000, 2001, and 2002 was the same; over 50% of the revenue each year went towards the cost of sales. Sales in 2002 were the largest, …show more content…
Net cash provided by Net cash used by operating activities investment activities 2000: $722 million (564 million) 2001: $737 million (460 million) 2002: $913 million(3,271 million) It is clear to see that in the year 2000 and 2001, operating activities was large enough to cover the investing cash outflow, but in 2002, the investing cash outflow exceeded far past the amount of net cash provided by operating activities. Loans were used to make up the difference. 16. When comparing the dividend payments to the income amounts for the current year, we found that the dividend payout ratio for 2002 was 78.2% (358/458 = .7816 = 78.2) E. General Mills Report of Management Responsibilities and Reports of Independent Public Accountants: 17. The management of General Mills, Inc. is responsible for the accounting numbers in the annual report. 18. For safeguards, General Mills used internal controls to ensure the accuracy of the reported numbers, including: an audit program, a separation of duties and responsibilities, and instated policies that demand ethical behavior from employees. 19. The independent accountant does not say that the reported amounts are correct, but does state that they are reported fairly. "We believe these consolidated financial statements do not misstate or omit any material facts... In our opinion, the consolidated financial statements referred to above present fairly, in all material respects..." The CPA assures that the statements are in
Based on the income statement and balance sheet, we can get the cash flow statement for year 2002, 2003 and the first quarter of 2004. From the cash flow, it is obviously see that the main use of fund is for operations, materials purchasing, wages payment, interest payment etc. While the source of fund is from financing, bank loan and trade notes payables.
Climbing from $146.9 million in 2007 to $528.8 million in 2013, the net cash provided by operating activities has almost tripled and reached a CAGR of 23.79%.
1. Their uses of cash were primarily used for paying off debt and investing it in marketable securities. Also they spent some of their cash on fixed assets. Even though their ending cash was lower than the previous year, they were using their cash effectively.
b. What financial statements are commonly prepared for external reporting purposes? What titles does General Mills give these
a.) General Mills makes money through producing various food products and distributing them all over the world.
According to the financial report given, General Mills is an insolvent business. This is because even after making sum purchases and general expenses; it is still able to settle for them through its everyday operation. The various sources of money are also evidenced from the financial report.
General Mills runs a leveraged operation where, in average, the total assets are 3 times shareholders equity. Leverage ratio has decreased since 2010 as retained earnings have increased at a faster pace than assets driven by strong business performance. A slight revamp in the leverage ratio during fiscal 2012 was mainly driven by an increase in other comprehensive losses related to pensions and postemployment activity, and foreign currency translation that offset retained earnings for the same period.
This paper reviews the Cash Flow Statements of Yum Brands, Inc., Panera Bread, and Starbucks documented by case study 10-10 in our textbook for the purpose of analyzing financial health based on cash flow data. (Gibson, 2013).
In vertical analysis, it is easier to see elements as a percentage of Revenue. Between 2011-12, the portion that cost of sales takes in revenue has increased however, there is a bigger deterioration in distribution cost. In 2011, 9.21% of revenue remains as profit but in 2012 this figure decreases to 8.14%. Despite reduction in costs is one of the strategies of Ted Baker(part 1.4), analysis illustrates that costs increase each year.
Company operates in the Industrial Sector – Services, and Industry – Regional Airlines. According to the Standard Industrial Classification System (SIC), company belongs to the industry group 451: Air
General Mills is a company that has strategically developed and growth through mergers and acquisitions. Mergers are the fusion of two companies that join forces to compete in the market. There are two types of merger: Horizontal merger on which the company acquires a competitor and vertical merger, on which the fusion is with a supplier. Acquisitions, on the other hand occurs when a company buys another company and become the property of the buyer. Thorough study of the market has made General Mills maintains a leader position on the food industry through more than 100 years in the market. According to a business encyclopedia, Strategy is a plan a company develops to reach a determine objective and reflects the company’s strength,
Question 1: The situation in this case study revolves around Sally, a member of the Board of Sally Susie's Donut Shop, Inc. (SSDS). SSDS uses an accrual method of accounting and over the past three years has seen volatile sales. Sally is unhappy with her previous tax advisor and wants new advice. Our task is to outline a preliminary interview with Sally to ensure that we ask the right questions.
countries around the world, committing $1.2 million per year for the next 12 years. Finally,
Cash flows from operating activities includes changes in net assets followed by depreciation, inventories and so on. During FY 2014, net cash provided by operating activities increased from $82,492,192 to $110,474,934. This shows that the organization has been able to increase revenue, which will allow it to improve and expand its services.
- The standards and requirements that govern the preparation of the consolidated financial statements 2015 is International Financial Reporting Standards (IFRS). And it’s follow accounting policies.