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Kellogg Company : An American Multinational Food Manufacturing Company

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Introduction:
The Kellogg Company - an American multinational food manufacturing company was founded on February 09, 1906 and is headquartered in Battle Creek, Michigan, United States. Kellogg 's specializes in breakfast cereal and convenience foods, including cookies, crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles, and vegetarian foods. Among many Kellogg’s brands Froot Loops, Apple Jacks, Corn Flakes, Frosted Flakes, Rice Krispies, Special K, Cocoa Krispies, Keebler, Pringles, Pop-Tarts, Kashi, Cheez-It, Eggo, Nutri-Grain, Morningstar Farms are most popular. With a vision of "Nourishing families so they can flourish and thrive” Kellogg company has extended its operations in 180 countries worldwide. In …show more content…

The operative cash flow reports inflows and outflows because of regular operating activities. Cash flow from operating activities is the cash version of net income. Net income includes non-cash costs such as depreciation and does not consider other cash expenditures, such as purchases of properties or equipment. Cash flows from operating activities are contributed by earnings, cash receipts from the sale of products, net of costs to manufacture and market products, accrued income from employee wages, interest expenses and income taxes. As per the annual report for the financial year ended on Dec 31,2015, net cash provided by operating activities for 2015 amounted to $1,691 million. The net income for the same year amounted to $ 614 million which is approximately 36% of the total operating cash. The difference is the result of the factors such as, adjustments made to reconcile net income to operating cash flows, income from postretirement benefit plan contributions, variations in operating assets and liabilities, net of acquisitions.
Liquidity and Capital Structure Exhibits 2 shows that an inordinately large dividend payment in 2015 of the cash budget, coupled with a large asset purchase, places both companies in a negative cash position. Paying out such a large dividend can be a problem for lenders, who do not like to issue loans so that companies can use the funds to pay their shareholders and thereby weaken their ability to pay

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