This document provides a summary of research findings on General Mills and Kraft Foods. It describes each company's business operations, recent news, financial analysis, and stock performance compared to the S&P 500. General Mills has shown higher returns and lower risk than the market average, while Kraft has experienced more volatility but may be undervalued in the short term following its acquisition of Cadbury. The document concludes that General Mills is a good long-term investment due to its consistent performance, while Kraft offers prospects for short-term gains.

1. Research Findings on General Mills, Inc. and Kraft Foods, Inc.VSB 1005 – Business DynamicsBy Andrew Bieler, Kathryn Cassavell, Marcelo Mazzocato and Michelle Phillips

2. General Mills, Inc. (GIS)

3. CompanyDescriptionUS Retail of packaged food (76%), International sales and food service: total revenue of nearly $16biSecond largest food company in the cereal sector; owner of the Cheerios brandFirst factory: Gold Medal Flour in Minneapolis, in the 1860sIncorporated in 192866 production facilities, 40 in the USHeadquartered in Minneapolis, MN33,000 employeeswww.generalmills.com

4. Company Description (cont.)Several leading and well-known brandsGreen Giant, Cheerios, Pillsbury, Betty Crocker, HaagenDazs, Nature Valley, Yoplait

5. General Mills In the News

6. General Mills Mum onReports of Yoplait PurchaseU.S. foods group General Mills declined to comment on Sunday on a British newspaper report that it was mulling a bid for French yogurt maker Yoplait following a contract dispute.

7. The Sunday Times said in an unsourced report that the maker of Cheerios cereal could pay 1 billion pounds ($1.56 billion) for unlisted Yoplait, whose products it distributes in the United States.General Mills Invests in New Production FacilityThe Minneapolis based General Mills announced their new $100 million investment into expansion of its Murfreesboro production facility.

8. “I’m very pleased to have one of the world’s most respected food companies growing and thriving in Tennessee,” said Governor Bredesen. “This expansion is not just an endorsement of Tennessee’s business climate, but in the quality and productivity of the workforce in Murfreesboro.”GM Managing Director TakesNew RoleThe managing director of General Mills' operations in the UK, Ireland and the Nordic region, has been elected president of UK industry body the Food and Drink Federation (FDF).

9. Jim Moseley has held his role with General Mills since 1999 and for the past four years has served as vice and deputy president of the FDF and chair of its Food Safety and Scientific Steering Group

10. Financial Analysis1. Profitability: recovery in margins. Efficiency gains forced by input prices. Increase in net margin, ROA and ROE in the past five years.2. Asset Management: high asset turnover ratios associated with high efficiency. Drop in average collection period. Short but constant inventory period. Periods are expected of the packaged food industry.

11. Financial Analysis (Cont.)3. Debt: high debt ratios but showing drops in the past years. Analysts say D/E is expected to fall significantly in the next five years. This trend shows the company’s high levels of debt are manageable.4. Liquidity: ratios show an upward trend but still lower than industry average.

12. Kraft Foods, Inc. (KFT)

13. Company Description #1 US Food Company, #2 worldwide (Hoover’s)

14. Food industry

15. 1903- James L. Kraft opened cheese business – Chicago, IL

16. Sectors: snacks, beverages, cheese, convenience meals, packaged grocery productsCompany Description (cont.) Headquarters: Northfield, IL

17. Incorporated in 2000

18. 97,000 Employees

19. Sell products – 160 countries

20. Operations in 70 countries Kraft in the NewsKraft’s Cookie, Cracker Sales Crumble in U.S.July 26, 2010 Rosenfeld predicted a 9% to 11% increase in EPS after Cadbury

21. Cookie sales down 4.6%

22. Cracker sales down 3.8%

23. Lost 1% of Market ShareKraft Gets Boost From CadburyAugust 5, 2010Profits up 13%Revenues up 25%Gross margin up 2.4%Earnings up 11%. Cadbury strong in foreign marketsAsia & Latin America