GENERAL MILLS, INC. General Mills, I.docx

GENERAL MILLS, INC.
General Mills, Inc.
FINC 330
Student 2
June 4, 2017

Running head: GENERAL MILLS, INC.
Table of Contents
Table of Tables ii
Introduction 1
Common Size Analysis:
Consolidated Statement of Earnings 1
Consolidated Balance Sheets 2
Percentage of Change Analysis:
Consolidated Statement of Earnings 2
Consolidated Balance Sheets 3
Financial Ratio Analysis:
Liquidity 4
Operating Performance 5
Profitability 6
Return on Investment 7
DuPont Analysis: Return on Equity (ROE) 8

Summary 9
References 10
Appendix A: Common Size Analysis of Consolidated Statement
of Earnings 11
Appendix B: Common Size Analysis of Consolidated Balance
Sheets 12
Appendix C: Percentage Change Analysis of Consolidated
Statement of Earnings 13
Appendix D: Percentage Change Analysis of Consolidated
Balance Sheet 14
Table of Tables
Figure One: Liquidity Ratios 4
Figure Two: Operating Performance Ratios 5
Figure Three: Turnover Ratios 6
Figure Four: Profitability Ratios 7
Figure Five: Return on Investment Ratios 8
Figure Six: DuPont Formula Calculations 9
GENERAL MILLS, INC.
i
Introduction
General Mills, Inc., founded in 1866, is a multinational

corporation that manufactures and markets branded consumer
foods sold through retail stores and a leading supplier of food
products to the foodservice and commercial baking industries
(Form 10-K, 2016). The company, which operates in the food
processing industry, categorizes its business operations into
three operating segments: U.S. Retail; International; and
Convenience Stores and Foodservice (Form 10-K, 2016). Well-
known brands include Cheerios cereal, Yoplait yogurt, Nature
Valley, Pillsbury refrigerated dough and Betty Crocker baking
products (Businesses, June 3, 2017). General Mills’ stock is
traded on the New York Stock Exchange (NYSE) under ticker
symbol GIS.
Common Size Analysis
Consolidated Statement of Earnings (See Appendix A).
Common size analysis of the consolidated statement of earnings
using net sales as the base indicates that cost of sales remained
relatively steady over the three-year period from fiscal year
2014 to 2016, with an approximate 2 percent increase noted in
fiscal year 2015 that declined again in 2016 to within 0.37
percent of the percentage of sales calculated in fiscal year 2014.
Thus, gross profit on sales remained relatively steady over the
same three-year period except for a slight decrease in fiscal
year 2015 that correlates to the increase of cost of sales in that
same year. General Mills, Inc. has slightly decreased expenses
related to selling, general and administrative over this three-
year period, however total change is less than 1 percent so this
is not particularly an item of note. Operating profit was
approximately 5 percent lower in 2015 because of not only
increased cost of sales, but an impairment charge related to the
Green Giant brand intangible asset (Form 10-K, p. 20, 2016).
Due to these same factors, General Mills’ net earnings in 2015
decreased from 10.19 percent in 2014 to 6.93 percent in 2015
before returning to 10.25 percent in fiscal year 2016.
Consolidated Balance Sheet (See Appendix B). The most
significant changes noted during a common size analysis of the
consolidated balance sheets using total assets as the base relate

to the company’s total liabilities, specifically long-term debt.
General Mills’ long-term debt as a percentage of assets
increased from 27.84 percent to 34.70 percent in fiscal year
2015. During this same fiscal year, the company’s cash and
cash equivalents decreased from 3.76 percent to 1.53 percent.
Goodwill increased from 37.49 percent in fiscal year 2014 to
40.65 percent in 2015 which indicates acquisition growth.
General Mills’ total liabilities as a percentage of total assets
increased from 65.37 percent in fiscal year 2014, to 71.73
percent and 71.66 percent in fiscal years 2015 and 2016
respectively. These numbers are relatively high and indicate a
significant amount of leverage and risk that may be an area of
concern. Common stock in treasury consistently increased from
22.62 percent in fiscal year 2014 to 29.14 percent in 2016 which
indicates the company purchased back some of its common
stock during those years. Accumulated other comprehensive
loss increased significantly over this three-year period as well,
noting an increase of 6.22 percentage points from fiscal year
2014 to 2016. Amounts recorded relate to hedge derivatives for
risk associated with interest rates and foreign currency and
accumulated benefit obligations for all defined pension plans
(Form 10-K, 2016).
Percentage of Change Analysis
Consolidated Statement of Earnings (See Appendix C).
Percentage change analysis of General Mills’ consolidated
statement of earnings indicates that net sales have decreased
over the three-year fiscal period from 2014 to 2016 resulting in
a total decrease of 7.52 percent from 2014 to 2016. The
company reported a decrease in cost of sales and gross profit on
sales for this same period due to a decrease in net sales.
Selling, general and administrative expenses decreased over this
three-year period as well, most likely because of lower sales. A
significant increase in restructuring, impairment, and other exit
costs was noted in 2015 due to the impairment cost of the Green
Giant brand previously discussed. In addition, stock-based

compensation expense related to restricted stock units and
performance share units were recognized in this category in
fiscal year 2015 and 2016 (Form 10-K, p. 85, 2016). While
operating profit decreased by 29.76 percent from 2014 to 2015,
the overall decrease of 8.45 percent from 2014 to 2016 was not
as significant. Percentage change decreases for income taxes
and net earnings directly correlate to the decreases noted above.
Consolidated Balance Sheets (See Appendix D). Percentage
change analysis of the consolidated balance sheets indicate a
significant decrease in cash and cash equivalents from 2014 to
2015, which increased slightly from 2015 to 2016, but still
resulted in a 11.95 percent decrease from the amount recorded
in 2014. As previously noted during the common size analysis,
long-term debt significantly increased in 2015, and slightly
decreased in 2016 resulting in a 9.87 percent increase from
2014 to 2016. The significant decrease in notes payable in 2015
and 2016, as well as the decrease of the current portion of long-
term debt for these years, may explain the decrease in cash and
cash equivalents. The percentage change analysis indicates that
General Mills increased the amount of common stock in
treasury in 2015 and 2016, most likely related to stock based
compensation. A 94.9 percent increase was recorded from 2014
to 2016 in accumulated other comprehensive loss, where a
significant increase was also noted in the common size analysis.
Overall, the company experienced a 5.89 percent decrease in
total assets which included decreases in receivables and
inventories most likely a result of a decrease in net sales.
While retained earnings increased 7.04 percent from 2014 to
2016, total stockholders’ equity decreased by 24.55 percent
over the same period.
Financial Ratio Analysis
Liquidity. General Mills’ current ratio declined slightly
during the three-year period from 2014 to 2016, with a current
ratio of 0.79 calculated in 2016. A ratio under 1 indicates that a
company’s liabilities are greater than its assets therefore,

General Mills’ financial health appears to be poor and it is
questionable whether the company can pay off its debt should it
become due (Current ratio, n.d.). The company’s quick ratio
has also slightly declined during this period ending at 0.50 in
2016, giving further indication that General Mills’ short-term
liquidity is not at a healthy number since only $0.50 of liquid
assets are available to cover each $1 of current liabilities
(Quick ratio, n.d.). Additionally, the company has consistently
had a negative net working capital-to-sales ratio for the three-
period. All three liquidity ratios indicate that the company will
most likely be required to take on more debt over the next 12-
month period to meets its obligations.
Figure One: Liquidity Ratios
Operating Performance. General Mills’ operating
performance ratios such as days of sales in inventory and days
of sales in receivables remained relatively stable during the
three-year period from fiscal year 2014 to 2016. In 2016, it
took the company approximately 48.07 days to turn its
inventory into sales, which is relatively quick. These sales took
approximately 29.99 days to become cash in 2016, indicating
that the company can collect its receivables in a timely manner.
The number of days’ payables outstanding increased by 16.97
days from 2015 to 2016 in which it took the company an
average of 69.59 days to pay out cash for its purchases. By
taking longer to pay its creditors the company keeps more
money on hand. This contributed to the company significantly
lowering its cash conversion cycle in 2016 to 8.47 days, and
reducing its liquidity needs.
Figure Two: Operating Performance Ratios
As exhibited in figure three below, General Mills’ accounts
receivable turnover ratio, fixed assets turnover ratio, and total
assets turnover ratio remained steady from 2014 to 2016.
However, the company’s inventory turnover ratio increased

significantly from 2015 to 2016. In 2016 inventory turned over
approximately 11.72 times versus 7.58 times in 2015. This
indicates that General Mills is becoming more efficient at
managing its inventories.
Figure Three: Turnover Ratios
Profitability. General Mills’ experienced no significant
changes in its gross profit margin from 2014 to 2016, in which
it ranged from 33.74 percent to 35.57 percent. The company’s
gross profit margin for 2016 was 35.20 percent indicating 35
cents profit for each dollar of revenue the company generated.
Operating profit margin for the same period ranged from a low
11.78 percent in 2015 to 16.51 percent in 2014. In fiscal year
2016, the company recovered some of the decrease that resulted
in 2015 to end the year back at a 16.35 percent operating profit
margin. As noted previously, operating expenses increased in
2015 and 2016 due to a significant increase in restructuring,
impairment, and other exit costs. Additionally, the company’s
net profit margin reflected correlating changes over the same
three-year period resulting in a 10.25 percent net profit margin
in 2016. This percentage indicates that every dollar of revenue
contributes approximately 10 cents to the overall earnings of the
company.
Figure Four: Profitability Ratios
Return on Investment. General Mills’ operating earning
power briefly decreased in 2015 but returned closely to its 2014
ratio in 2016. The basic earning power ratio calculated for
2016 is 12.47 percent. Therefore, for every dollar invest in
assets, General Mills earned about 12 cents in 2016. The
company’s return on assets (ROA) ratio followed a similar
trend. When taking into consideration how the company’s
assets are financed, General Mills’ return on assets in 2016 was
7.82 percent. The company incurred interest of $302.4 million
in 2016 in addition to paying $883.3 million in taxes (Form

10K, p. 53, 2016). These ratios indicate that 4.65 percent of
revenue is expensed out as interest and taxes (Basic…Ratio,
n.d.). The trend indicates that while the company’s profitability
deteriorated in 2015, it rebounded in 2016 indicating
improvement. Per Loth (n.d.) a return on investment of 5
percent or above is desired by investment professionals,
therefore while General Mills is not generating a substantial
profit on its assets, it is generating a sufficient return.
Figure Five: Return on Investment Ratios
DuPont Analysis
Return on Equity (ROE). Using the DuPont formula for
calculating General Mills’ return on equity for the three- year
period of 2014-2016 indicates that the company is generating
and sustaining an excellent return on equity (see figure six).
The company’s ROE declined slightly from 27.92 percent in
2014 to 24.44 percent in 2015, before increasing to 34.43
percent in 2016. In 2016, General Mills created 34 cents of
earnings for each dollar originally invested in the company. Per
Loth (n.d.) “financial analysts consider return of equity ratios in
the 15-20 percent range as representing attractive levels of
investment quality” (para. 4). While it appears that General
Mills’ ROE is at a superior level, the company has a
disproportionate amount of debt in its capital structure. The
company’s debt to equity ratio for 2016 was 3.15 or 315 percent
calculated by taking its total liabilities of $15,559.6 million
divided by its stockholder equity of 4,930.2 million (Form 10-
K, p. 55, 2016). This indicates that the company is heavily
taking on debt and has a high level of risk (Investopedia staff,
n.d.).
Figure Six: DuPont Formula Calculations

Summary
General Mills, Inc. has experienced decreased sales over
the three-year fiscal period from 2014 to 2016. However, cost
of sales and gross profit on sales as remained relatively steady.
Operating profits were approximately 5 percent lower in 2015
due to a significant increase in restructuring, impairment and
other exit costs. During this same three-year period the
company’s cash and cash equivalents decreased while long-term
debt increased. Liquidity ratios indicate that the company may
have to incur additional debt to meet current obligations. The
company kept more cash on hand by extending the number of
days it took to pay for purchases in 2016 which contributed to a
lower cash conversion cycle. Turnover ratios remained
relatively steady over the three-year period except for an
increase in inventory efficiency in 2016. General Mills’ is
generating sufficient profit on it assets, and while the
company’s return on equity appears to be at a superior level, the
company’s debt to equity ratio indicates that the company is
heavily in debt and may be at risk. Overall, it appears that
General Mills’ is not currently in a healthy financial position.
References
Basic earning power ratio. (n.d.). Retrieved June 3, 2017, from
http://xplaind.com/531544/basic-earning-power-ratio
Businesses. (June 3, 2017). Retrieved from
https://www.generalmills.com/en/Company/Businesses
Current ratio. (n.d.). Retrieved June 2, 2017, from
http://www.investopedia.com/terms/c/currentratio.asp
Form 10-K. (2016). General Mills, Inc. Retrieved May 20, 2017,
from
https://www.sec.gov/Archives/edgar/data/40704/0001193125166
38404/d221637d10k.htm

Form 10-K. (2015). General Mills, Inc. Retrieved May 20, 2017,
from
https://www.sec.gov/Archives/edgar/data/40704/0001193125152
45476/d947722d10k.htm
Investopedia Staff. (n.d.). Debt/equity ratio. Retrieved June 3,
2017, from
http://www.investopedia.com/terms/d/debtequityratio.asp
Loth, R. (n.d.). Profitability indicator ratios: Return on assets.
Retrieved June 3, 2017, from
http://www.investopedia.com/university/ratios/profitability-
indicator/ratio3.asp
Loth, R. (n.d.). Profitability indicator ratios: Return on equity.
Retrieved June 3, 2017, from
http://www.investopedia.com/university/ratios/profitability-
indicator/ratio4.asp
Quick ratio. (n.d.). Retrieved June 2, 2017, from
http://www.investopedia.com/terms/q/quickratio.asp
Appendix A: Common Size Analysis of Consolidated Statement
of Earnings
(Form 10-K, p. 53, 2016)

Appendix B: Common Size Analysis of Consolidated Balance
Sheets
(Form 10-K, p. 55, 2016; p. 53, 2015)
Appendix C: Percentage Change Analysis of Consolidated
Statement of Earnings
(Form 10-K, p. 53, 2016)
Exhibit D: Percentage Change Analysis of Consolidated
Balance Sheets
(Form 10-K, p. 55, 2016; p. 53, 2015)
2014
Net profit margin Operating profit margin Gross profit

margin 0.1019 0.1651 0.3557 2015 Net profit margin
Operating profit margin Gross profit margin 0.0693
0.1178 0.3374 2016
Net profit margin Operating profit margin Gross profit
margin 0.1025 0.1635 0.352
1
201420152016
Total assets23,071.6$ 21,832.0$
21,712.3$
Total stockholders' equity6,534.8$
4,996.7$ 4,930.2$
Revenues17,909.6$ 17,630.3$
16,563.1$
Net income1,824.4$ 1,221.3$
1,697.4$
Net profit margin:
Net income/revenues1,824.4/17,909.6 =
10.19%1,221.3/17,630.3 = 6.93%1,697.4/16,563.1 = 10.25%
Total assets turnover:
Revenues/total assets17,909.6/23,071.6 =
0.7817,630.3/21,832 = 0.8116,563.1/21,712.3 = 0.76
Equity multiplier:
Total assets/common equity 23,071.6/6,534.8 =
3.5321,832/4,996.7 = 4.3721,712.3/4,930.2 = 4.40
Return on Equity (ROE)
Net profit margin * total assets turnover * equity
multiplier10.19 * 0.78 * 3.53 = 27.92%6.93 * 0.81 * 4.37 =
24.44%10.25 * 0.76 * 4.40 = 34.43%
DuPont Analysis
General Mills, Inc. and Subsidiaries
Net sales100.00%100.00%100.00%
Cost of sales64.43%66.26%64.80%

Gross profit on sales35.57%33.74%35.20%
Selling, general and administrative expenses
19.40%18.88%18.83%
Divestitures (gain)-0.37%0.00%-0.89%
Restructuring, impairment, and other exit
costs0.02%3.09%0.91%
Operating profit16.51%11.78%16.35%
Interest, net1.69%1.79%1.83%
Earnings before income taxes and after-tax
earnings from joint ventures14.82%9.99%14.51%
Income taxes4.93%3.33%4.56%
After tax earnings from joint ventures0.50%0.48%0.53%
Net earnings, including earnings attributable to
redeemable and noncontrolling interests10.39%7.14%10.49%
Net earnings attributable to redeemable and
noncontrolling interests0.21%0.22%0.24%
Net earnings attributable to General Mills
10.19%6.93%10.25%
Common Size Analysis of Consolidated Statement of Earnings
2015-162014-152013-14
ASSETS
Current assets:
Cash and cash equivalents3.76%1.53%3.52%
Receivables6.43%6.35%6.27%
Inventories6.76%7.06%6.51%
Prepaid expenses and other current assets1.77%1.94%1.84%
Total current assets18.72%16.88%18.13%
Land, buildings, and equipment17.09%17.33%17.24%
Goodwill37.49%40.65%40.26%
Other intangible assets21.73%21.42%20.90%
Other assets4.96%3.72%3.46%
Total assets100.00%100.00%100.00%
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable6.98%7.71%9.43%

Current portion of long-term debt5.42%4.58%5.08%
Notes payable4.82%2.82%1.24%
Other current liabilities6.28%7.28%7.35%
Total current liabilities23.51%22.40%23.10%
Long-term debt27.84%34.70%32.51%
Deferred income taxes6.90%6.64%6.45%
Other liabilities7.12%7.99%9.61%
Total liabilities65.37%71.73%71.66%
Redeemable interest4.27%3.57%3.89%
Stockholders' equity:
Common stock, $0.10 par value0.33%0.35%0.35%
Additional paid-in capital5.34%5.94%5.42%
Retained earnings51.09%54.92%58.11%
Common stock in treasury, at cost-22.62%-27.74%-29.14%
Accumulated other comprehensive loss-5.81%-10.58%-12.03%
Total stockholders' equity28.32%22.89%22.71%
Noncontrolling interest2.04%1.81%1.74%
Total equity30.36%24.70%24.44%
Total liabilities and equity100.00%100.00%100.00%
Common Size Analysis of Consolidated Balance Sheets
2015-162014-152013-14
(in millions)
Net sales-1.56%-7.52%
Cost of sales1.22%-6.99%
Gross profit on sales-6.60%-8.48%
Selling, general and administrative expenses -4.21%-10.23%
Divestitures (gain)-100.00%126.26%
Restructuring, impairment, and other exit
costs15008.33%4105.56%
Operating profit-29.76%-8.45%
Interest, net4.30%0.46%
Earnings before income taxes and after-tax
earnings from joint ventures-33.64%-9.47%
Income taxes-33.57%-14.50%
After tax earnings from joint ventures-5.92%-1.34%

Net earnings, including earnings attributable to
redeemable and noncontrolling interests-32.34%-6.69%
Net earnings attributable to redeemable and
noncontrolling interests
3.25%6.78%
Net earnings attributable to General Mills
-33.06%-6.96%
Percentage
Change
2014-16
Percentage
Change
2014-15
Percentage Change Analysis of Consolidated Statement of
Earnings
(in millions)
ASSETS
Current assets:
Cash and cash equivalents-61.47%-11.95%
Receivables-6.53%-8.28%
Inventories-1.19%-9.34%
Prepaid expenses and other current assets3.59%-2.47%
Total current assets
-14.67%-8.85%
Land, buildings, and equipment-4.02%-5.03%
Goodwill2.59%1.05%
Other intangible assets-6.73%-9.49%
Other assets-29.18%-34.38%
Total assets-5.37%-5.89%
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable4.51%27.01%
Current portion of long-term debt-20.01%-11.77%
Notes payable-44.61%-75.73%
Other current liabilities9.66%10.01%

Total current liabilities
-9.83%-7.54%
Long-term debt17.93%9.87%
Deferred income taxes-8.90%-12.08%
Other liabilities6.18%27.04%
Total liabilities3.83%3.17%
Redeemable interest-20.85%-14.07%
Stockholders' equity:
Common stock, $0.10 par value0.00%0.00%
Additional paid-in capital5.27%-4.45%
Retained earnings1.73%7.04%
Common stock in treasury, at cost16.02%21.21%
Accumulated other comprehensive loss72.40%94.90%
Total stockholders' equity-23.54%-24.55%
Noncontrolling interest-15.85%-19.91%
Total equity-23.02%-24.24%
Total liabilities and equity-5.37%-5.89%
Percentage
Change
2014-15
Percentage
Change
2014-16
Percentage Change Analysis of Consolidated Balance Sheets
1
Running head: STAGE 1
2
STAGE 1

Stage 1- ConAgra Brands Inc. (CAG)
Student 1
Business Finance- FINC 330
University of Maryland University College

COMPANY BACKGROUND
ConAgra Brands Inc. is well known manufacturer of food
products. This company has approximately 40 different
locations and its headquarters is located in Chicago, Illinois
(Conagra Brands, n.d.). The company that was started around
100 years ago now employees over 13,000 people at its different
locations (Conagra Brands, n.d.). The successful and growing
company is known to be worth approximately 8 billion dollars
(Conagra Brands, n.d.). Additionally, some of the well known
brands manufactured by ConAgra are, Rotel, Hunts, Marie
Callender’s, Orvill Redenbacher’s, Reddi Wip, Bertolli, Bigs,
Peter Pan, Pam, and many more (Conagra Brands, n.d.).
COMMON SIZE ANALYSIS
The net sales of the company have stayed relatively the same
for the last three years only showing slight increases and
decreases over the last three years. The 2014 balance for net
sales was 11,838.2 with a slight increase to 11,937.0 in 2015
followed by a slight decrease for the 2016 with a balance of
11,642.9. The cost of goods sold and the expenses for the
company have also only shown slight increases and decreases
over the past three years as well. The cost of goods sold had a
balance of 8,910.8 in 2014 which then increased slightly in
2015 to 9,061.4, only to decrease again in 2016 to 8,552.1.
Furthermore, the asset amounts for the company have also
stayed approximately the same over the past few years. The
liabilities on the other hand have decreased from 12,827.8 in

2015 to 9,595.8 in 2016. That is a decrease of 3,232 in just one
year. Total assets also decreased from 2015 to 2016 with a
balance starting at 17,437.8 and ending with a balance of
13,390.6. Equity, along with most other aspects of the company,
has stayed within close range from year to year with a balance
of 4,610 in 2015 and a balance of 3,794.8 in 2016.
Additionally, the common size analysis of the company for both
the income statement and the balance sheet have the percentages
from the past three-year period of 2014 to 2016 showing
approximately the same numbers for all categories on the
financial statements. The largest percentage difference is
showing in the net income for the company which is currently in
the negative and has progressively reached further into the
negative amounts over the last three years. The net income
percentage in 2014 started at 3% with a balance of 303.1 and by
2015 was showing a negative 2% and a balance of negative
252.6. This shows a decrease in net income for the company
from 2014 to 2015 of 555.7. The net income shown for 2016
continued to decrease with a balance of -677 which shows a
substantial overall decrease of 980.1 for the three-year period of
2014 to 2016.
With the information provided on the net income, net sales, cost
of goods sold and the balance sheet and income statement the
company shows to be staying within the same business model
for the past three years from 2014 to 2016. The business has not
shown to be profitable and could stand for some change to bring
up the net income for the business. The past three years have
shown a downward and decreasing trend in net income which
could but is showing the same for other aspects of the business.
Changing in business model to bring back up the net income for
the business is very important and if it is not changed the
company could show serious problems in the future. The
common size analysis of the balance sheet and income statement
of the business is shown below. With change to the business

model the company could become more profitable, stable, and
have a better outlook for the future of the business.
ConAgra Foods, Inc. and Subsidiaries
Consolidated Statements of Operations
(in millions, except per share amounts)

For the Fiscal Years Ended May
2016
%
2015
%
2014
%
Net sales
11,642.90
100%
11,937.00
100%
11,838.20
100%

Costs and expenses:
Cost of goods sold
8,552.10
73%
9,061.40
76%
8,910.80
75%

2,209.40
19%
1,545.30
13%
1,778.90
15%

Interest expense, net
297.8
3%
330
3%
377.5
3%
Income from continuing operations before income taxes and
equity method investment earnings
583.6
5%
1,000.30
8%
771
7%

Income tax expense
225.4
2%
362.1
3%
178.3
2%

Equity method investment earnings
137.8
1%
122.1
1%
32.5
0%
Income from continuing operations
496
4%
760.3
6%
625.2
5%

Loss from discontinued operations, net of tax
-1,161.90
-10%
-1,001.10
-8%
-310.1
-3%
Net income (loss)
-665.9
-6%
-240.8
-2%
315.1
3%

Less: Net income attributable to noncontrolling interests
11.1
0%
11.8
0%
12
0%

Net income (loss) attributable to ConAgra Foods, Inc.
-677
-6%
-252.6
-2%
303.1
3%
Earnings (loss) per share — basic

Income from continuing operations attributable to ConAgra
Foods, Inc. common stockholders
1.11
0%
1.75
0%
1.45
0%
Loss from discontinued operations attributable to ConAgra
-2.68
-0%
-2.35
-0%

-0.73
-0%
Net income (loss) attributable to ConAgra Foods, Inc. common
stockholders
-1.57
-0%
-0.6
0%
0.72
0%
Earnings (loss) per share — diluted

1.09
0%
1.73
0%
1.43
0%
-2.65
-0%

-2.32
-0%
-0.73
-0%
stockholders
-1.56
-0%
-0.59
-0%
0.7
0%

Consolidated Balance Sheets
(in millions, except share data)
May 29,
%
May 31,
2016
2015

%
ASSETS
Current assets
Cash and cash equivalents
834.5
6%
164.7
1%
Receivables, less allowance for doubtful accounts of $3.7 and
$3.8
836.6
6%
739
4%

Inventories
1,582.10
12%
1,642.60
9%
Prepaid expenses and other current assets
206.5
2%
168.2
1%
Current assets held for sale
117
1%
848.8
5%

3,576.70
27%
3,563.30
20%
Property, plant and equipment
Land and land improvements
208.1
2%
194.2
1%
Buildings, machinery and equipment
4,993.00
37%

4,822.30
28%
Furniture, fixtures, office equipment and other
801.8
6%
807.4
5%
Construction in progress
206.3
2%
244.3
1%
6,209.20
46%

6,068.20
35%
Less accumulated depreciation
-3,498.90
-26%
-3,423.60
-20%
Property, plant and equipment, net
2,710.30
20%
2,644.60
15%
Goodwill
4,533.80
34%
4,544.60
26%

Brands, trademarks and other intangibles, net
1,276.80
10%
1,272.50
7%
Other assets
1,067.20
8%
926.8
5%
Noncurrent assets held for sale
225.8
2%
4,486.00
26%

13,390.60
100%
17,437.80
100%
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Notes payable
38.8
0%
7.9
0%

Current installments of long-term debt
571.4
4%
1,007.80
6%
Accounts payable
945.4
7%
1,080.00
6%
Accrued payroll
271.1
2%
206.3
1%

Other accrued liabilities
651
5%
647.1
4%
Current liabilities held for sale
54.7
0%
361
2%
2,532.40
19%
3,310.10
19%

Senior long-term debt, excluding current installments
4,721.90
35%
6,692.90
38%
Subordinated debt
195.9
1%
195.9
1%
Other noncurrent liabilities
2,144.10
16%
1,915.90
11%

Noncurrent liabilities held for sale
1.5
0%
713
4%
Total liabilities
9,595.80
72%
12,827.80
74%
Commitments and contingencies (Note 17)

Common stockholders' equity
Common stock of $5 par value, authorized 1,200,000,000
shares; issued 567,907,172
2,839.70
21%
2,839.70
16%
Additional paid-in capital
1,136.30
8%
1,049.40
6%
Retained earnings
3,218.30
24%

4,331.10
25%
Accumulated other comprehensive loss
-344.5
-3%
-329.5
-2%
Less treasury stock, at cost, 129,842,206 and 139,702,605
common shares
-3,136.20
-23%
-3,364.70
-19%
Total ConAgra Foods, Inc. common stockholders' equity
3,713.60
28%
4,526.00
26%
Noncontrolling interests
81.2

1%
84
0%
Total stockholders' equity
3,794.80
28%
4,610.00
26%
13,390.60
100%
17,437.80
100%

PERCENTAGE ANALYSIS
The percentage analysis for the company is showing mostly
negative changes between 2014 and 2015 as well as 2015 and
2016. Net sales has not changed much for the company and is
showing only slight differences over the years with a 1% change
from 2014 to 2015 and a negative 2% change from 2015 to
2016. While the net sales of the company are not showing much
change the cost of goods sold is showing a slight increase from
2014 to 2015 of 2% and then a decrease from 2015 to 2016 of
negative 6%. The decrease in the cost of goods sold should be
good for the company profit wise since this means the cost to
the company has gone down slightly.
While the cost of goods sold has shown slight decrease in recent
years, the selling, general, and administrative taxes for the
company has shown a slight decrease of negative 13% from
2014 to 2015, followed by a large increase from 2015 to 2016 of
43%. The 43% increase in these expenses is not good for the
company since they are now paying out an extra 43% and in
turn is going to have a lower company profit for the 2016 year.
Furthermore, percentage analysis of the balance sheet also
shows valuable information about the company and its financial
standings. The first amount shown on this analysis is cash and
cash equivalents for the company showing a major increase in
percentage from 2015 to 2016 of 407%. This is good for the
company since it is showing a major increase in assets for the
company that are good for value. Also, inventories have
changed just slightly with a negative 4% change from 2015 to
2016. Overall, the current assets are showing a 0% change on
the percentage analysis since the change in the total current
assets column from 2015 to 2016 was only 13.4.
This analysis shows a 7% increase in land and land

improvements and a 4% increase in buildings, machinery and
equipment. While there has been some increases and decreases
shown in the percentage analysis of the balance sheet and
income statement for the company, the overall total for assets is
showing a decrease of a negative 23%. This is showing a
decrease from the 2016 balance of 17,427.8 to the 2016 balance
of 13,390.6, standing for an overall amount decrease of 4047.2.
Additionally, the liabilities section of the balance sheet
percentage analysis is showing a major increase in notes
payable for the company with a 391% increase from 2015 to
2016. This is showing that the company has borrowed more
money and has not yet repaid the amounts borrowed. This is not
good for the company because it does now owe quite a bit more
money than the previous business year.
While the financial information is showing that the company
has taken out more loans it also shows the accounts payable
section of the company has gone down with a decrease from
2015 to 2016 of negative 12%. This is favorable for the
company because that means the company owes less money to
its creditors. The total liabilities for the company is showing a
negative 25% change from 2015 to 2016. This shows the
company has had a decrease from the 2015 balance of 12,827.8
to the 2016 balance of 9,595.8 for a total decrease of 3,232. The
total stockholders’ equity for the company has also shown a
decrease from 2015 to 2016 of negative 18%.

Consolidated Statements of Operations
(in millions, except per share amounts)

For the Fiscal Years Ended May
2016
% Change
2015
% Change
2014
Net sales
11,642.90
-2%
11,937.00
1%
11,838.20

Costs and expenses:
Cost of goods sold
8,552.10
-6%
9,061.40
2%
8,910.80
2,209.40
43%
1,545.30
-13%
1,778.90

Interest expense, net
297.8
-10%
330
-13%
377.5
Income from continuing operations before income taxes and
equity method investment earnings
583.6
-42%
1,000.30
30%
771

Income tax expense
225.4
-38%
362.1
103%
178.3
Equity method investment earnings
137.8
13%
122.1
276%
32.5
Income from continuing operations
496

-35%
760.3
22%
625.2
Loss from discontinued operations, net of tax
-1,161.90
16%
-1,001.10
223%
-310.1
Net income (loss)
-665.9
177%
-240.8
-176%
315.1

Less: Net income attributable to noncontrolling interests
11.1
-6%
11.8
-2%
12
Net income (loss) attributable to ConAgra Foods, Inc.
-677
168%
-252.6
-183%
303.1
Earnings (loss) per share — basic

1.11
-37%
1.75
21%
1.45
-2.68
14%
-2.35
222%
-0.73
stockholders
-1.57
162%

-0.6
-183%
0.72
Earnings (loss) per share — diluted
1.09
-37%
1.73
21%
1.43

-2.65
14%
-2.32
218%
-0.73
stockholders
-1.56
164%
-0.59
-184%
0.7
Consolidated Balance Sheets
(in millions, except share data)

May 29,
% Change
May 31,
2016
2015
ASSETS
Current assets
Cash and cash equivalents
834.5
407%
164.7
Receivables, less allowance for doubtful accounts of $3.7 and
$3.8
836.6

739
13%
Inventories
1,582.10
-4%
1,642.60
Prepaid expenses and other current assets
206.5
23%
168.2
Current assets held for sale
117
-86%
848.8
3,576.70
0%
3,563.30

Property, plant and equipment
Land and land improvements
208.1
7%
194.2
Buildings, machinery and equipment
4,993.00
4%
4,822.30
Furniture, fixtures, office equipment and other
801.8
-1%
807.4
Construction in progress
206.3
-16%
244.3

6,209.20
2%
6,068.20
Less accumulated depreciation
-3,498.90
2%
-3,423.60
Property, plant and equipment, net
2,710.30
2%
2,644.60
Goodwill
4,533.80
0%
4,544.60
Brands, trademarks and other intangibles, net
1,276.80
0%
1,272.50

Other assets
1,067.20
15%
926.8
Noncurrent assets held for sale
225.8
-95%
4,486.00
13,390.60
-23%
17,437.80
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Notes payable
38.8

391%
7.9
Current installments of long-term debt
571.4
-43%
1,007.80
Accounts payable
945.4
-12%
1,080.00
Accrued payroll
271.1
31%
206.3
Other accrued liabilities
651
1%
647.1

Current liabilities held for sale
54.7
-85%
361
2,532.40
-23%
3,310.10
Senior long-term debt, excluding current installments
4,721.90
-29%
6,692.90
Subordinated debt
195.9
0%
195.9
Other noncurrent liabilities
2,144.10

12%
1,915.90
Noncurrent liabilities held for sale
1.5
-100%
713
Total liabilities
9,595.80
-25%
12,827.80
Commitments and contingencies (Note 17)
Common stockholders' equity
Common stock of $5 par value, authorized 1,200,000,000
shares; issued 567,907,172

2,839.70
0%
2,839.70
Additional paid-in capital
1,136.30
8%
1,049.40
Retained earnings
3,218.30
-26%
4,331.10
Accumulated other comprehensive loss
-344.5
5%
-329.5
Less treasury stock, at cost, 129,842,206 and 139,702,605
common shares
-3,136.20
-7%
-3,364.70
Total ConAgra Foods, Inc. common stockholders' equity
3,713.60
-18%
4,526.00

Noncontrolling interests
81.2
-3%
84
Total stockholders' equity
3,794.80
-18%
4,610.00
13,390.60
-23%
17,437.80
FINANCIAL RATIO ANALYSIS
Liquidity
The financial ratio analysis of the company gives very
important information on the overall standing of the company.

This analysis will be going over some important ratios and
information on the company and its standings as a whole. First
off, the liquidity of the company is shown in the current ratio,
quick ratio, and the cash ratio. The current ratio for the
company stands at a 1.41. The current ratio shows how well the
company is positioned to cover the short-term liabilities or
current liabilities (Loth, n.d.) Since the company has a current
ratio of 1.41 this shows that the company is well positioned and
should be able to take care of any current or short term
liabilities that are showing on the financial statements.
The quick ratio for the company is a .79. This ratio, while not
as high as it could be is reinforcing what the current ratio is
telling us. This ratio could be a little higher but is helping show
that the company will be able to pay for short term and current
liabilities. The company from these ratios is showing that the
company is showing a good liquidity viewpoint. The quick ratio
could be higher to show a higher liquidity rate but overall the
company is showing it is able to pay the liabilities the company
holds.
Profitability
The profitability of the company is showing a somewhat good
outlook for the company. The gross profit margin is 27.07
which is showing high for a food manufacturing company. The
company with this high of a gross margin is showing it should
be able to make a considerable profit with the market. The
return on assets is showing a little low with a 3.10 for the
company. The average companies like to see for profitability is
5% (Loth, n.d.). Conagra is running a little low on this average
bringing in a 3% for return on assets.
The return on equity is also showing low for the company. An
average of 15% or higher is often viewed as favorable for a
company to have to remain profitable (Loth, n.d.). The company

is bringing in a return on equity of 11.65 which is a little low
for a favorable profitability for the company. Furthermore, the
company is showing it needs to make some changes to bring up
the financial profitability of the company. The profitability also
shows in the net income for the company which is in the
negative amounts for 2015 and 2016.
Operating Performance
The operating margin for the company is showing to be on a
decline. The operating margin for 2014 is 9.7 which rises
slightly to 11.12 in 2015 and then decreases again in 2016 to
7.57. The operating margin for the company needs to be much
higher to show good operating performance for the company.
Also, the gross profit margin has stayed relatively the same for
the last three years with a 2014 percentage of 24.73 followed by
a 2015 percentage of 24.09 and then ending in a 2016
percentage of 26.55. The net margin percentages are showing to
become progressively negative over the last three years. The
2014 balance for net margin percent was 1.7 followed in 2015
with a negative 1.61 and ending in 2016 with a negative 5.86.
The percentages showing in the tables below are indicating the
company is not operating at its highest performance level and
could make some changes to improve profitability and
performance within the company.
Return on Investment
The return on assets or ROA and the return on equity or ROE
are showing in the tables below to be progressively decreasing
over the past few years. The return on assets went from a 2014
balance of 1.52 to a 2015 balance of negative 1.38 and ending
on a 2016 balance of negative 4.41. The highest ROA shown in
the tables is a balance of 7.9 in 2009 which shows the company
has been on a decreasing trend for many years now.

The return on equity is showing approximately the same
information for the company. The return on equity balance of
5.73 in 2014, negative 5.2 in 2015, and a negative 16.55 in
2016. The largest ROE balance shown is in 2009 with a balance
of 19.45. The company has been on a decreasing trend with the
ROE for many years now as well, taking a major hit from 2015
to 2016. With the information from the financial ratios the
company does not look to be doing well on return on
investment. All of the information provided on the financial
statements as well as the financial ratios shows this company
needs to make many major changes to the business model to
help with investments, profitability, performance and liquidity.
The company Conagra Brands Inc. is not showing to be a liquid
company. The company is not showing to be profitable and is in
need of a major change to bring the company back into good
financial and profitable standings. The company can do a few
different things to help improve the cash conversion cycle
within the business. The company can increase inventory
turnover for the company, improve the cash collection period,
and maximize the credit period of accounts payables (College
accounting coach, 2008). Changing one more all of these
options will help improve the cash conversion cycle for the
company.
Liquidity
Current Ratio
1.41
Quick Ratio
0.79
Cash Ratio
0.33
Profitability

Gross Margin
27.07
Operating Margin
10.73
Pretax Margin
5.01
Net Margin
4.12
Return on Assets
3.10
Return on Equity
11.65
Return on Total Capital
4.43
Return on Invested Capital
4.79
Efficiency
Revenue/Employee
557,077.00
Income Per Employee
22,971.00
Receivables Turnover
12.87
Total Asset Turnover
0.75
Capital Structure
Total Debt to Total Equity
148.86
Total Debt to Total Capital
59.82
Total Debt to Total Assets
41.28
Long-Term Debt to Equity

132.43
Long-Term Debt to Total Capital
53.21
(Marketwatch, n.d.).
Efficiency
2007-05
2008-05
2009-05
2010-05
2011-05
2012-05
2013-05
2014-05
2015-05
2016-05
TTM
Days Sales Outstanding
36.17
32.92
23.97
24.64
25.32
24.60
26.21
27.76
27.39
28.49
24.22
Days Inventory
91.99
87.86

73.01
73.52
66.28
64.23
65.22
61.18
65.48
80.73
66.22
Payables Period
40.59
38.88
29.70
35.29
38.93
39.77
41.17
39.08
41.54
49.16
39.02
Cash Conversion Cycle
87.58
81.90
67.27
62.88
52.67
49.07
50.25
49.85
51.33
60.06
51.43

10.09
11.09
15.23
14.81
14.42
14.84
13.93
13.15
13.33
12.81
15.07
Inventory Turnover
3.97
4.15
5.00
4.96
5.51
5.68
5.60
5.97
5.57
4.52
5.51
Fixed Assets Turnover
5.23
4.82
4.96
4.59
4.65
4.90
4.69
4.62
4.27

3.69
5.11
Asset Turnover
1.01
0.91
1.03
1.06
1.06
1.16
0.97
0.89
0.86
0.75
0.93
Margins % of Sales
2007-05
2008-05
2009-05
2010-05
2011-05
2012-05
2013-05
2014-05
2015-05
2016-05
TTM
Revenue
100.00
100.00
100.00
100.00
100.00

100.00
100.00
100.00
100.00
100.00
100.00
COGS
74.43
76.53
77.61
74.52
76.57
79.00
75.02
75.27
75.91
73.45
72.22
Gross Margin
25.57
23.47
22.39
25.48
23.43
21.00
24.98
24.73
24.09
26.55
27.78
SG&A
16.85
15.26

13.55
15.14
12.10
14.85
15.34
15.03
12.95
18.98
17.42
R&D
—
—
—
—
—
—
—
—
—
—
—
Other
—
—
—
—
—
—
—
—
—
—
—

Operating Margin
8.73
8.21
8.84
10.34
11.33
6.14
9.64
9.70
11.14
7.57
10.36
Net Int Inc & Other
-2.08
-1.76
-1.30
-1.34
-1.43
-1.53
-2.05
-3.19
-2.76
-2.56
-2.00
EBT Margin
6.64
6.45
7.54
9.00
9.90
4.61
7.59
6.51
8.38

5.01
8.36
Efficiency Ratios
Profitability
2007-05
2008-05
2009-05
2010-05
2011-05
2012-05
2013-05
2014-05
2015-05
2016-05
TTM
Tax Rate %
36.38
32.63
34.28
32.71
34.37
31.32
34.84
51.73
—
38.62
45.15
Net Margin %
6.36
8.02
7.69
6.01

6.64
3.52
4.99
1.70
-1.61
-5.86
5.50
Asset Turnover (Average)
1.01
0.91
1.03
1.06
1.06
1.16
0.97
0.89
0.86
0.75
0.93
Return on Assets %
6.42
7.29
7.90
6.36
7.06
4.08
4.85
1.52
-1.38
-4.41
5.10
Financial Leverage (Average)
2.58

2.56
2.35
2.38
2.43
2.58
3.88
3.68
3.88
3.61
2.49
Return on Equity %
16.56
18.76
19.45
15.05
16.98
10.20
15.92
5.73
-5.20
-16.55
15.35
Return on Invested Capital %
11.16
12.67
11.15
8.73
11.42
7.92
8.56
3.76
-0.41
-4.61
9.01

Interest Coverage
—
—
—
—
6.58
4.01
5.12
2.51
-0.49
2.95
5.11
(Morningstar, n.d.).
ROE- DUPONT ANALYSIS
The DuPont Analysis used to calculate the return on equity for
the company is showing a major decreasing trend. The return on
equity for any company shows how much profit is being made
by the company with the shareholders’ equity. The 2014 balance
shown in the calculations below is 5.73 followed by a 2015
balance of a negative 5.2 and the ending with the 2016 balance
of a negative 16.55. This shows the company is in the negative
when it comes to the return on the equity for the company.
The net income for the company has also been on a decreasing
trend which has been a major contribution for the decreasing
return on equity calculations. To improve the return on equity
for the company there are many different options. One option is
to review all of the company policies and see if there is a way
to save on tax rates (Robertson, n.d.). Another option for the
company is to increase the return on sales for the company by
reviews pay for employees, operating costs, material costs, and
product sale prices (Robertson, n.d.). Increasing assets turnover

rates is also another option in improving the return on equity
for the company (Robertson, n.d.). The options listed above can
all be taken into account when finding ways to improve the
return on equity for the company.
2016
(665.9)/11,642.9 X 11,642.9/15,414.2 X 13,390.6/3,713.6 =
(16.55)
2015
(240.8)/11,937.0 X 11,937.0/18,377.65 X 17,437.8/4,526 = (5.2)
2014
315.1/11,838.2 X 11,838.2/19,862.4 X 19,319.5/5,258.5 = 5.73

References
College Accounting Coach. (2008). How to compute and
improve the cash conversion cycle (ccc) (part 2). Retrieved
from http://basiccollegeaccounting.com/2008/06/how-to-
compute-and-improve-the-cash-conversion-cycleccc-part-2/
Conagra Brands. (n.d.). About Conagra Brands. Retrieved from
http://www.conagrabrands.com/our-company/overview

Loth, R. (n.d.). Financial Ratio Tutorial. Retrieved from
http://www.investopedia.com/university/ratios/
MarketWatch. (n.d.). Conagra Brands Inc. Retrieved from
http://www.marketwatch.com/investing/stock/cag/profile
MorningStar. (n.d.). Conagra Brands Inc. Retrieved from
http://financials.morningstar.com/ratios/r.html?t=CAG#tab-
efficiency
Robertson, T. (n.d.). How to improve return on equity.
Retrieved from http://smallbusiness.chron.com/improve-return-
equity-59183.html
United States Securities and Exchange Commission. (n.d.).
Conagra Foods, Inc. Form 10-K. Retrieved from
http://phx.corporate-ir.net/phoenix.zhtml?c=97518&p=irol-
SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS
9maWxpbmcueG1sP2lwYWdlPTExMDQwMTgxJkRTRVE9MC
ZTRVE9MCZTUURFU0M9U0VDVElPTl9FTlRJUkUmc3Vic2lk
PTU3#sF2336B9F84ED24237A6D4EF6A6530D3D
Running Head: Financial Research Project

1
Financial Research Project
19
Financial Research Project
Student’s Name
Institutional Affiliation
Background and Industry
Campbell Soup Company is also known as Campbell’s. The
company is based in the United States. It is involved in the
canning of soup and other related products. The company deals
with provision of soups, snacks and beverages. Most of its
income however comes from the sale of soup. The company has
currently managed to sell its products in over 120 countries.
The company is in the food processing industry. The company
has been operations since 1869.
Common Size Analysis
Campbell Soup
Income Statement (Values in Millions)
Period Ending:
7/31/2016
8/2/2015

8/3/2014
Total Revenue
$7,961,000
100%
$8,082,000
100%
$8,268,000
100%
Cost of Revenue
$5,181,000
65%
$5,300,000
66%
$5,297,000
64%
Gross Profit
$2,780,000
35%
$2,782,000
34%
$2,971,000
36%
Operating Expenses
Research and Development
$124,000
2%
$117,000
1%

$122,000
1%
Sales, General and Admin.
$1,665,000
21%
$1,509,000
19%
$1,527,000
18%
Non-Recurring Items
$31,000
0%
$102,000
1%
$55,000
1%
Other Operating Items
$0
0%
$0
0%
$0
0%
Operating Income
$960,000
12%
$1,054,000
13%
$1,267,000
15%
Add'l income/expense items
$4,000
0%
$3,000
0%
$3,000

0%
Earnings Before Interest and Tax
$964,000
12%
$1,057,000
13%
$1,270,000
15%
Interest Expense
$115,000
1%
$108,000
1%
$122,000
1%
Earnings Before Tax
$849,000
11%
$949,000
12%
$1,148,000
14%
Income Tax
$286,000
4%
$283,000
4%
$374,000
5%
Minority Interest
$0
0%
$0
0%
$11,000
0%

Equity Earnings/Loss Unconsolidated Subsidiary
$0
0%
$0
0%
$0
0%
Net Income-Cont. Operations
$563,000
7%
$666,000
8%
$774,000
9%
Net Income
$563,000
7%
$666,000
8%
$866,000
10%
Campbell Soup
Balance Sheet (Values in 000's)
Period Ending:
7/31/2016
8/2/2015
8/3/2014
Current Assets

Cash and Cash Equivalents
$296,000
4%
$253,000
3%
$232,000
3%
Short-Term Investments
$0
0%
$0
0%
$0
0%
Net Receivables
$626,000
8%
$647,000
8%
$670,000
8%
Inventory
$940,000
12%
$995,000
12%
$1,016,000
13%
Other Current Assets
$46,000
1%
$198,000
2%
$182,000
2%

Total Current Assets
$1,908,000
24%
$2,093,000
26%
$2,100,000
26%
Long-Term Assets
Long-Term Investments
$0
0%
$0
0%
$0
0%
Fixed Assets
$2,407,000
31%
$2,347,000
29%
$2,318,000
29%
Goodwill
$2,263,000
29%
$2,344,000
29%
$2,433,000
30%
Intangible Assets

$1,152,000
15%
$1,205,000
15%
$1,175,000
14%
Other Assets
$107,000
1%
$88,000
1%
$87,000
1%
Deferred Asset Charges
$0
0%
$0
0%
$0
0%
Total Assets
$7,837,000
100%
$8,077,000
100%
$8,113,000
100%
Current Liabilities
Accounts Payable
$1,336,000

17%
$1,263,000
16%
$1,218,000
15%
Short-Term Debt / Current Portion of Long-Term Debt
$1,219,000
16%
$1,543,000
19%
$1,771,000
22%
Other Current Liabilities
$0
0%
$0
0%
$0
0%
Total Current Liabilities
$2,555,000
33%
$2,806,000
35%
$2,989,000
37%
Long-Term Debt
$2,314,000
30%
$2,539,000
31%
$2,244,000
28%
Other Liabilities
$1,039,000
13%

$850,000
11%
$729,000
9%
Deferred Liability Charges
$396,000
5%
$505,000
6%
$548,000
7%
Misc. Stocks
$0
0%
$0
0%
$0
0%
Minority Interest
$8,000
0%
($4,000)
0%
($12,000)
0%
Total Liabilities
$6,312,000
81%
$6,696,000
83%
$6,498,000
80%
Stock Holders’ Equity

Common Stocks
$12,000
0%
$12,000
0%
$12,000
0%
Capital Surplus
$354,000
5%
$339,000
4%
$330,000
4%
Retained Earnings
$1,927,000
25%
$1,754,000
22%
$2,198,000
27%
Treasury Stock
($664,000)
-8%
($556,000)
-7%
($356,000)
-4%
Other Equity
($104,000)
-1%
($168,000)
-2%

($569,000)
-7%
Total Equity
$1,525,000
19%
$1,381,000
17%
$1,615,000
20%
Total Liabilities & Equity
$7,837,000
100%
$8,077,000
100%
$8,113,000
100%
The company has been going through some tough times. This is
evidence by the fact that the percentage of the net income since
2014 has been declining. The company had a net income
percentage of 10% in 2014, 8% in 2015 and 7% in 2016. The
company’s costs of goods sold does not have the same
percentage changes as the net income. The company’s operating
costs have been increasing over the last three years. This
evident from the constant decrease of the earnings before
interest and tax. It is therefore clear that the company needs to
control its costs especially the operating costs in order to
maintain its profitability.
The balance sheet does not show any issues that raises any
concern. The company has maintained small changes in all its
accounts. The changes in the percentage value of the accounts
changes with a slight one percent change. There are no large
changes that can cause concern. The major change in
comparison to the rest is the decrease of the retained earnings of
the company in 2015 and an increase in 2016 which is a good

sign. There percentage of the total liabilities on the three-year
period is high. The company has around 80% of its assets being
financed by liability (White, Braentner & Towery, 1993).
The income statement mainly raises concern on the decrease in
the company’s profitability. The company is also being financed
too much by debt which can be risky. From the interest expense
however, it is clear that the company can comfortably be able to
pay off its debt. The company is stable enough and can be able
to pay of its debt. The company needs to make its profitability
to be stable in positive and not negative growth.
Percentage Change Analysis
Campbell Soup
Income Statement (Values in Millions)
Period Ending:
7/31/2016
Percent Increase (Decrease)
8/2/2015
8/3/2014
Total Revenue
$7,961,000
-4%
$8,082,000
-2%
$8,268,000
Cost of Revenue
$5,181,000
-2%
$5,300,000
0%
$5,297,000
Gross Profit
$2,780,000
-6%
$2,782,000
-6%

$2,971,000
Operating Expenses
Research and Development
$124,000
2%
$117,000
-4%
$122,000
Sales, General and Admin.
$1,665,000
9%
$1,509,000
-1%
$1,527,000
Non-Recurring Items
$31,000
-44%
$102,000
85%
$55,000
Other Operating Items
$0
-
$0
$0
Operating Income
$960,000
-24%
$1,054,000
-17%

$1,267,000
Add'l income/expense items
$4,000
33%
$3,000
0%
$3,000
Earnings Before Interest and Tax
$964,000
-24%
$1,057,000
-17%
$1,270,000
Interest Expense
$115,000
-6%
$108,000
-11%
$122,000
Earnings Before Tax
$849,000
-26%
$949,000
-17%
$1,148,000
Income Tax
$286,000
-24%
$283,000
-24%
$374,000
Minority Interest
$0
-100%
$0
-100%

$11,000
Equity Earnings/Loss Unconsolidated Subsidiary
$0
-
$0
-
$0
Net Income-Cont. Operations
$563,000
-27%
$666,000
-14%
$774,000
Net Income
$563,000
-35%
$666,000
-23%
$866,000
Campbell Soup
Balance Sheet (Values in 000's)
Period Ending:
7/31/2016
8/2/2015
8/3/2014
Current Assets
Cash and Cash Equivalents
$296,000
28%
$253,000
9%
$232,000
Short-Term Investments
$0

-
$0
-
$0
Net Receivables
$626,000
-7%
$647,000
-3%
$670,000
Inventory
$940,000
-7%
$995,000
-2%
$1,016,000
Other Current Assets
$46,000
-75%
$198,000
9%
$182,000
Total Current Assets
$1,908,000
-9%
$2,093,000
0%
$2,100,000
Long-Term Assets
Long-Term Investments
$0

-
$0
-
$0
Fixed Assets
$2,407,000
4%
$2,347,000
1%
$2,318,000
Goodwill
$2,263,000
-7%
$2,344,000
-4%
$2,433,000
Intangible Assets
$1,152,000
-2%
$1,205,000
3%
$1,175,000
Other Assets
$107,000
23%
$88,000
1%
$87,000
Deferred Asset Charges
$0
-
$0
-
$0
Total Assets
$7,837,000

-3%
$8,077,000
0%
$8,113,000
Current Liabilities
Accounts Payable
$1,336,000
10%
$1,263,000
4%
$1,218,000
Short-Term Debt / Current Portion of Long-Term Debt
$1,219,000
-31%
$1,543,000
-13%
$1,771,000
Other Current Liabilities
$0
-
$0
-
$0
Total Current Liabilities
$2,555,000
-15%
$2,806,000
-6%
$2,989,000
Long-Term Debt
$2,314,000

3%
$2,539,000
13%
$2,244,000
Other Liabilities
$1,039,000
43%
$850,000
17%
$729,000
Deferred Liability Charges
$396,000
-28%
$505,000
-8%
$548,000
Misc. Stocks
$0
$0
-
$0
Minority Interest
$8,000
-167%
($4,000)
-67%
($12,000)
Total Liabilities
$6,312,000
-3%
$6,696,000
3%
$6,498,000
Stock Holders’ Equity

Common Stocks
$12,000
0%
$12,000
0%
$12,000
Capital Surplus
$354,000
7%
$339,000
3%
$330,000
Retained Earnings
$1,927,000
-12%
$1,754,000
-20%
$2,198,000
Treasury Stock
($664,000)
87%
($556,000)
56%
($356,000)
Other Equity
($104,000)
-82%
($168,000)
-70%
($569,000)
Total Equity
$1,525,000

-6%
$1,381,000
-14%
$1,615,000
Total Liabilities & Equity
$7,837,000
-3%
$8,077,000
0%
$8,113,000
As 2014 as the base year, the trend that can be seen from the
analysis above is a poor one. The company’s sales have reduced
over the last two years. In 2015 the decrease was 2% and in
2016 the decrease was 4%. This raises concern that the
company’s market share has been reducing over the years. The
company need to carry out marketing activities that are meant to
increase its revenues.
The company has increased some of its expenses and reduced
others. The company in 2016 increased its expenditure in
research and development. The company increased its
expenditure on sales, general and administration. The
percentage increase is 9% which is worrying. Despite the
company reducing its revenues, it accrued a lot of operating
expenses and thus there was huge decrease in the company’s
operating income in 2016 in comparison to 2014 (White,
Braentner & Towery, 1993).
The company’s current assets reduced considerably in 2016 in
comparison to 2014. The company decreased the amount of
short-term debt that it took in 2016 and 2015. The company’s
total liabilities however slightly reduced by 3% in 2016 while in
2015 it had increased with the same percentage. The company
tried to reduce its debt financing. Equity financing also reduced
its more in 2015 and less in 2016. The company’s value of its

total assets and the equity and liabilities amount reduced by 3%.
Ratio
2016
2015
2014
Current Ratio
75%
75%
70%
Quick Ratio
38%
39%
36%
Days Inventory
68.09
69.48
65.97
13.45
13.17
12.67
Gross Profit Margin
35%
34%
36%
Net Profit Margin
7%
8%
10%
ROA
7.07%
8.53%
9.95%

ROE
37%
48%
54%
In the above ratio analysis, two ratios are used to determine the
liquidity of the company. These are the current ratio and quick
ratio. The current ratio is the ratio of a company’s current assets
to its current liabilities. The quick ratio is the ratio of a
company’s most liquid asset which include current assets less
inventory to its current liabilities. the ratios are used to show
the ability of a company to meets its short-term liabilities using
its current assets. The company has low liquidity. This is a
problem as the company will have difficulty when paying for its
obligations. The company needs to increase the money that it
takes from operations and increase its accounts receivable. The
company has been able to maintain its liquidity over the last
year with small differences between the years. Its quick ratio
increased slightly in 2015 but decreased slightly in 2016.
The profitability ratio that were used in this scenario were the
gross margin ratio and net margin. The gross profit margin ratio
is a ratio of gross profit to revenues. The net margin ratio is a
ratio of net income to total revenues. The company’s gross
margin decreased slightly in 2015 and increased in 2016. The
company’s net margin ratio has however been decreasing since
2014. The difference between the ratios is a clear sign that the
company accrues too much operating costs and its operating
costs have been increasing over the last 3 years. The company’s
profitability has reduced which is a sign that the company
should reduce its expenses and increase its revenues for it to
increase its growth (Bodie, 2013).

The days inventory turnover shows the period of time it takes
for the company’s inventory to be sold. The company takes
around 60 days to sell its inventory. This is a long time which
the company has to maintain its inventory. this leaves chances
of loss of inventory due to storage. The receivables turnover
ratio is used to determine the ability of a company in managing
its account receivables. The company receives its account
receivable about 13 times per year. This means that the
company collects accounts receivable in less than a month. The
company however needs to improve in order to improve its
liquidity.
Return on Assets (ROA), is a ratio of net income to total assets.
Return on Equity (ROE), is the ratio of net income to total
equity. The returns on investment has been reducing over the
last three years. The company needs to improve on its net
earnings through increasing its revenues and reducing its
expenses. An increase in its net earnings will in turn increase
the return on the investment made by the company. the company
needs to generate more earnings from the assets that it as
(Bodie, 2013).
In order to improve the company’s Cash Conversion Cycle
(CCC), the company needs to convince their suppliers to
increase the period of time within which the company is
expected to meet its obligations. These would increase the time
that accounts payable are settled. The management would also
need to reduce the period of time that the customers takes to
pay the company. this can be done by giving the customers
incentive such as discounts for them to pay within a shorter
period of time. The company would also need to send invoices
to the customers within a short period of time (Lewis, 2017).
The company would also need to improve its efficiency. The
company should improve its efficiency in the billing and
invoicing process. These will contribute to faster time for the

company to receive the cash that is owed to it. The company
also needs to manage its inventory. The company should
manage its inventory such as it does not keep too much
inventory. inventory ties up capital for a long period of time.
Return on Equity
ROE = Net profit margin x Total assets turnover x Equity
multiplier
2016
Net profit Margin = 7%
Total Asset Turnover = 1.02
Equity Multiplier = 5.14
= 7% * 1.02 * 5.14
=36.70%
2015
= 8% * 1.00 * 5.85
= 46.8%
2014
= 10% * 1.02 * 5.02
= 51.20%
DuPont Analysis is of the view that the return on equity is
affected by three aspects. The first is the net margin, the second
is the asset turnover ratio which in this we use the total asset
turnover and the third is the equity multiplier.
The company’s return on assets has been deteriorating over the

three years. The company’s net margin can be seen to be the
most troubled aspect of the company. In 2014, the net margin
was 10% and yet by 2016 the company had a net margin ratio of
7%. The company’s operations need to improve. The company’s
net margin has been decreasing over the last three years. The
company needs to work on its operations (Wahlen, Baginski &
Bradshaw, 2014).
The company can work on its operations by increasing its
revenues through carrying out more marketing in order for the
product to reach more of their customers. The company also
needs to reduce its expenses. In this case, the company should
try to increase its operating activities. By reducing the expenses
and increasing the revenues, the company will achieve better
net margin ratio.
References
Bodie, Z. (2013). Investments. McGraw-Hill.
Lewis, J., (2017). How Can a Company Shorten Its Cash Cycle?
Hearst Newspapers, LLC.
Wahlen, J., Baginski, S., & Bradshaw, M. (2014). Financial
reporting, financial statement analysis and valuation. Nelson
Education.
White, B., Braentner, L., & Towery, E. (1993). Financial
Statement Analysis. New York: Wiley.
_1558262554.xls
Chart12014201465.9712.670.360.10.09950.542015201569.4813.
170.340.080.08530.482016201668.0913.450.350.070.07070.37
Current Ratio
Quick Ratio
Days Inventory
Gross Profit Margin
Net Profit Margin
ROA
ROE
Financial Ratios

0.7
0.36
0.75
0.39
0.75
0.38
Sheet1CampBell SoupIncome Statement (Values in
Millions)Period Ending:7/31/168/2/158/3/14Total
Revenue$7,961,000100%$8,082,000100%$8,268,000100%Cost
of Revenue$5,181,00065%$5,300,00066%$5,297,00064%Gross
Profit$2,780,00035%$2,782,00034%$2,971,00036%Operating
ExpensesResearch and
Development$124,0002%$117,0001%$122,0001%Sales, General
and Admin.$1,665,00021%$1,509,00019%$1,527,00018%Non-
Recurring Items$31,0000%$102,0001%$55,0001%Other
Operating Items$00%$00%$00%Operating
Income$960,00012%$1,054,00013%$1,267,00015%Add'l
income/expense items$4,0000%$3,0000%$3,0000%Earnings
Before Interest and
Tax$964,00012%$1,057,00013%$1,270,00015%Interest
Expense$115,0001%$108,0001%$122,0001%Earnings Before
Tax$849,00011%$949,00012%$1,148,00014%Income
Tax$286,0004%$283,0004%$374,0005%Minority
Interest$00%$00%$11,0000%Equity Earnings/Loss
Unconsolidated Subsidiary$00%$00%$00%Net Income-Cont.
Operations$563,0007%$666,0008%$774,0009%Net
Income$563,0007%$666,0008%$866,00010%
Sheet2CampBell SoupBalance Sheet (Values in 000's)Period
Ending:7/31/168/2/158/3/14Current AssetsCash and Cash
Equivalents$296,0004%$253,0003%$232,0003%Short-Term
Investments$00%$00%$00%Net
Receivables$626,0008%$647,0008%$670,0008%Inventory$940,
00012%$995,00012%$1,016,00013%Other Current
Assets$46,0001%$198,0002%$182,0002%Total Current
Assets$1,908,00024%$2,093,00026%$2,100,00026%Long-Term
AssetsLong-Term Investments$00%$00%$00%Fixed

Assets$2,407,00031%$2,347,00029%$2,318,00029%Goodwill$2
,263,00029%$2,344,00029%$2,433,00030%Intangible
Assets$1,152,00015%$1,205,00015%$1,175,00014%Other
Assets$107,0001%$88,0001%$87,0001%Deferred Asset
Charges$00%$00%$00%Total
Assets$7,837,000100%$8,077,000100%$8,113,000100%Current
LiabilitiesAccounts
Payable$1,336,00017%$1,263,00016%$1,218,00015%Short-
Term Debt / Current Portion of Long-Term
Debt$1,219,00016%$1,543,00019%$1,771,00022%Other
Current Liabilities$00%$00%$00%Total Current
Liabilities$2,555,00033%$2,806,00035%$2,989,00037%Long-
Term Debt$2,314,00030%$2,539,00031%$2,244,00028%Other
Liabilities$1,039,00013%$850,00011%$729,0009%Deferred
Liability Charges$396,0005%$505,0006%$548,0007%Misc.
Stocks$00%$00%$00%Minority Interest$8,0000%($4,000)-
0%($12,000)-0%Total
Liabilities$6,312,00081%$6,696,00083%$6,498,00080%Stock
Holders EquityCommon
Stocks$12,0000%$12,0000%$12,0000%Capital
Surplus$354,0005%$339,0004%$330,0004%Retained
Earnings$1,927,00025%$1,754,00022%$2,198,00027%Treasury
Stock($664,000)-8%($556,000)-7%($356,000)-4%Other
Equity($104,000)-1%($168,000)-2%($569,000)-7%Total
Equity$1,525,00019%$1,381,00017%$1,615,00020%Total
Liabilities &
Equity$7,837,000100%$8,077,000100%$8,113,000100%
Sheet3CampBell SoupIncome Statement (Values in
Millions)Period Ending:7/31/16Percent Increase
(Decrease)8/2/15Percent Increase (Decrease)8/3/14Total
Revenue$7,961,000-4%$8,082,000-2%$8,268,000Cost of
Revenue$5,181,000-2%$5,300,0000.06%$5,297,000Gross
Profit$2,780,000-6%$2,782,000-6%$2,971,000Operating
ExpensesResearch and Development$124,0002%$117,000-
4%$122,000Sales, General and
Admin.$1,665,0009%$1,509,000-1%$1,527,000Non-Recurring

Items$31,000-44%$102,00085%$55,000Other Operating
Items$0-$0$0Operating Income$960,000-24%$1,054,000-
17%$1,267,000Add'l income/expense
items$4,00033%$3,0000%$3,000Earnings Before Interest and
Tax$964,000-24%$1,057,000-17%$1,270,000Interest
Expense$115,000-6%$108,000-11%$122,000Earnings Before
Tax$849,000-26%$949,000-17%$1,148,000Income
Tax$286,000-24%$283,000-24%$374,000Minority Interest$0-
100%$0-100%$11,000Equity Earnings/Loss Unconsolidated
Subsidiary$0-$0-$0Net Income-Cont. Operations$563,000-
27%$666,000-14%$774,000Net Income$563,000-35%$666,000-
23%$866,000
Sheet4CampBell SoupBalance Sheet (Values in 000's)Period
Ending:7/31/16Percent Increase (Decrease)8/2/15Percent
Increase (Decrease)8/3/14Current AssetsCash and Cash
Equivalents$296,00028%$253,0009%$232,000Short-Term
Investments$0-$0-$0Net Receivables$626,000-7%$647,000-
3%$670,000Inventory$940,000-7%$995,000-
2%$1,016,000Other Current Assets$46,000-
75%$198,0009%$182,000Total Current Assets$1,908,000-
9%$2,093,000-0.3%$2,100,000Long-Term AssetsLong-Term
Investments$0-$0-$0Fixed
Assets$2,407,0004%$2,347,0001%$2,318,000Goodwill$2,263,0
00-7%$2,344,000-4%$2,433,000Intangible Assets$1,152,000-
2%$1,205,0003%$1,175,000Other
Assets$107,00023%$88,0001%$87,000Deferred Asset
Charges$0-$0-$0Total Assets$7,837,000-3%$8,077,000-
0%$8,113,000Current LiabilitiesAccounts
Payable$1,336,00010%$1,263,0004%$1,218,000Short-Term
Debt / Current Portion of Long-Term Debt$1,219,000-
31%$1,543,000-13%$1,771,000Other Current Liabilities$0-$0-
$0Total Current Liabilities$2,555,000-15%$2,806,000-
6%$2,989,000Long-Term
Debt$2,314,0003%$2,539,00013%$2,244,000Other
Liabilities$1,039,00043%$850,00017%$729,000Deferred
Liability Charges$396,000-28%$505,000-8%$548,000Misc.

Stocks$0$0-$0Minority Interest$8,000-167%($4,000)-
67%($12,000)Total Liabilities$6,312,000-
3%$6,696,0003%$6,498,000Stock Holders EquityCommon
Stocks$12,0000%$12,0000%$12,000Capital
Surplus$354,0007%$339,0003%$330,000Retained
Earnings$1,927,000-12%$1,754,000-20%$2,198,000Treasury
Stock($664,000)87%($556,000)56%($356,000)Other
Equity($104,000)-82%($168,000)-70%($569,000)Total
Equity$1,525,000-6%$1,381,000-14%$1,615,000Total
Liabilities & Equity$7,837,000-3%$8,077,000-0%$8,113,000
Sheet5Financial Ratio AnalysisRatio201620152014Current
Ratio75%75%70%Quick Ratio38%39%36%Days
Inventory68.0969.4865.97Receivables
Turnover13.4513.1712.67Gross Profit Margin35%34%36%Net
Profit
Margin7%8%10%ROA7.07%8.53%9.95%ROE37%48%54%Curr
ent RatioQuick RatioDays InventoryReceivables TurnoverGross
Profit MarginNet Profit
MarginROAROE201470%36%65.9712.6736%10%9.95%54%201
575%39%69.4813.1734%8%8.53%48%201675%38%68.0913.45
35%7%7.07%37%
Sheet5
Current Ratio
Quick Ratio
Days Inventory
Gross Profit Margin
Net Profit Margin
ROA
ROE
Financial Ratios
Stage 3 -Reflection Paper -
This part is designed to be completed individually by the
student.
Comparative Analysis of the financial performance and ratios

within the industry and specific recommendations –
Due at the end of week 4 of the course.
This stage of the project is based on your findings in Stage 1,
findings of other students in your group posted in the group
discussion area, and the results of the group discussion of Stage
2 of the project.
· In this stage of the project you will develop comparative
analysis of the companies in the industry and industry trends.
You will select of most significant financial performance results
of the companies analyzed in stage 1 by you and the other
students in your group that you believe reflect the industry
trends. Create a table with these results for the last three
years. Present the table with this information in your report.
· Write about 1-2 pages of the industry trend analysis of the
results that you received.
· Develop a specific recommendation, with supporting rationale.
Specifically, the primary question is: will THE COMPANY be
financially viable over the next two to three years, and which
steps should be done to improve its financial stability.
· Write about 1-2 pages of specific recommendation, with
supporting rationale.
At this point you should submit the file in to the Assignment
folder that contains Stage 3 of the project.

GENERAL MILLS, INC. General Mills, I.docx

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