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Analyzing, Forecasting, and Interpreting Income Statement and Balance Sheet
Following are the income statement and balance sheet of General Mills, Inc.
| Income Statement, Fiscal Years Ended (in $ millions) |
May 26, 2013 | May 27, 2012 | May 29, 2011 |
|---|---|---|---|
| Net Sales | $ 17,774.1 | $ 16,657.9 | $ 14,880.2 |
| Cost of Sales | 11,350.2 | 10,613.2 | 8,926.7 |
| Selling, general and administrative expenses | 3,552.3 | 3,380.7 | 3,192.0 |
| Divestitures (gain) | — | — | (17.4) |
| Restructuring, impairment, and other exit costs | 19.8 | 101.6 | 4.4 |
| Operating profit | 2,851.8 | 2,562.4 | 2,774.5 |
| Interest, net | 316.9 | 351.9 | 346.3 |
| Earnings before income taxes and after tax earnings from joint ventures | 2,534.9 | 2,210.5 | 2,428.2 |
| Income taxes | 741.2 | 709.6 | 721.1 |
| After-tax earnings from joint ventures | 98.8 | 88.2 | 96.4 |
| Net earnings, including earnings attributable to redeemable and noncontrolling interests | 1,892.5 | 1,589.1 | 1,803.5 |
| Net earnings attributable to redeemable and noncontrolling interests | 37.3 | 21.8 | 5.2 |
| Net earnings attributable to General Mills | $ 1,855.2 | $ 1,567.3 | $ 1,798.3 |
| Balance Sheet (in millions except per share data) | May 26, 2013 | May 27, 2012 |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | $ 741.4 | $ 471.2 |
| Receivables | 1,446.4 | 1,323.6 |
| Inventories | 1,545.5 | 1,478.8 |
| Deferred income taxes | 128.0 | 59.7 |
| Prepaid expenses and other current assets | 437.6 | 358.1 |
| Total current assets | 4,298.9 | 3,691.4 |
| Land, buildings, and equipment | 3,878.1 | 3,652.7 |
| Goodwill | 8,622.2 | 8,182.5 |
| Other intangible assets | 5,015.1 | 4,704.9 |
| Other assets | 843.7 | 865.3 |
| Total assets | $ 22,658.0 | $ 21,096.8 |
| Liabilities and stockholders’ equity | ||
| Current liabilities | ||
| Accounts payable | $ 1,423.2 | $ 1,148.9 |
| Current portion of long-term debt | 1,443.3 | 741.2 |
| Notes payable | 599.7 | 526.5 |
| Other current liabilities | 1,827.7 | 1,426.6 |
| Total current liabilities | 5,293.9 | 3,843.2 |
| Long-term debt | 5,926.1 | 6,161.9 |
| Deferred income taxes | 1,389.1 | 1,171.4 |
| Other liabilities | 1,952.9 | 2,189.8 |
| Total liabilities | 14,562.0 | 13,366.3 |
| Redeemable interest | 967.5 | 847.8 |
| Stockholders’ equity | ||
| Common stock, 754.6 shares issued, $0.10 par value | 75.5 | 75.5 |
| Additional paid-in capital | 1,166.6 | 1,308.4 |
| Retained earnings | 10,702.6 | 9,958.5 |
| Common stock in treasury, at cost, shares of 113.8 and 106.1 | (3,687.2) | (3,177.0) |
| Accumulated other comprehensive loss | (1,585.3) | (1,743.7) |
| Total stockholders’ equity | 6,672.2 | 6,421.7 |
| Noncontrolling interests | 456.3 | 461.0 |
| Total Equity | 7,128.5 | 6,882.7 |
| Total liabilities and shareholders’ equity | $ 22,658.0 | $ 21,096.8 |
Forecast General Mill’s fiscal 2014 income statement using the following relations (assume “no change” for accounts not listed). Assume that depreciation and amortization expense is included as part of selling, general and administrative expense ($ millions).
| Net sales growth | 5.0% |
| Cost of sales/Net sales | 63.9% |
| Selling, general and administrative expenses/Net sales | 20.0% |
| Divestitures (gain), net | $0 |
| Restructuring, impairment, and other exit costs | $0 |
| Interest, net | $316.9 |
| Income tax expense/Pretax income | 29.2% |
| After-tax earnings from joint ventures | $98.8 |
| Net earnings attributable to noncontrolling interests/Net earnings before attribution | 2.0% |
Instructions: Round answers to one decimal place. Do not use negative signs with your answers. Remember to use rounded forecasted net sales with subsequent calculations.
| Income Statement, Fiscal Years Ended ($ millions) | 2014 Estimated |
|---|---|
| Net sales | $Answer |
| Cost of sales | Answer |
| Selling, general and administrative expenses | Answer |
| Divestitures (gain), net | Answer |
| Restructuring, impairment, and other exit costs | Answer |
| Operating profit | Answer |
| Interest. net | Answer |
| Earnings before income taxes and after-tax earnings from joint ventures | Answer |
| Income taxes | Answer |
| After-tax earnings from joint ventures | Answer |
| Net earnings, including earnings attributable to noncontrolling interests | Answer |
| Net earnings attributable to noncontrolling interests | Answer |
| Net earnings attributable to General Mills | $Answer |
Forecast General Mill’s fiscal 2014 balance sheet using the following relations (assume”no change” for accounts not listed). Assume that all capital expenditures are purchases of land, building and equipment, net. ($ millions).
| Cash/Net sales | 4.2% |
| Receivables/Net sales | 8.1% |
| Inventories/Net sales | 8.7% |
| Deferred income tax/Net sales | 0.7% |
| Prepaid expenses and other current assets/Net sales | 2.5% |
| Other intangible assets | $0 amortization |
| Other assets/Net sales | 4.7% |
| Accounts payable/Net sales | 8.0% |
| Other current liabilities/Net sales | 10.3% |
| Current portion of long-term debt | $1,181.9 |
| Deferred income taxes/Net sales | 7.8% |
| Other liabilities/Net sales | 11.0% |
| Capital expenditures/Net sales | 3.5% |
| Depreciation/Prior year net PPE | 16.1% |
| Dividends/Net earnings attributable to General Mills | 46.8% |
Instructions: Round answers to one decimal place. Do not use negative signs with your answers. Remember to use rounded forecasted net sales with subsequent calculations.
| Balance Sheet ($ millions) |
2014 Estimated |
|---|---|
| Assets | |
| Cash and cash equivalents | $Answer |
| Receivables | Answer |
| Inventories | Answer |
| Deferred income taxes | Answer |
| Prepaid expenses and other | Answer |
| Total current assets | Answer |
| Land, buildings, and equipment | Answer |
| Goodwill | Answer |
| Other intangible assets | Answer |
| Other assets | Answer |
| Total assets | $Answer |
| Liabilities and equity | |
| Accounts payable | $Answer |
| Short-term debt (plug) | $Answer |
| Current portion of long-term debt | Answer |
| Notes payable | Answer |
| Other current liabilities | Answer |
| Total current liabilities | Answer |
| Total long-term debt | Answer |
| Deferred income taxes | Answer |
| Other liabilities | Answer |
| Total liabilities | Answer |
| Redeemable interest | Answer |
| Stockholders equity | |
| Common stock | Answer |
| Additional paid-in capital | Answer |
| Retained earnings | Answer |
| Common stock in treasury | Answer |
| Accumulated other comprehensive loss | Answer |
| Total stockholders’ equity | Answer |
| Noncontrolling interests | Answer |
| Total equity | Answer |
| Total liabilities and Equity | $ Answer |
| Income Statement, | ||
| Fiscal Years Ended (in $ millions) | Forecast for 2014 |
Forecast for 2014 |
| Net Sales | 5.00% | 18662.805 |
| Cost of Sales | 63.90% | 11925.5324 |
| Selling, general and administrative expenses | 20.00% | 3732.561 |
| Divestitures (gain) | 0.00% | 0 |
| Restructuring, impairment, and other exit costs | 0.00% | 0 |
| Operating profit | 3004.711605 | |
| Interest, net | 316.9 | 316.9 |
| Earnings before income taxes and after tax earnings from joint ventures | 2687.811605 | |
| Income taxes | 29.20% | 784.8409887 |
| After-tax earnings from joint ventures | 98.8 | 98.8 |
| Net earnings, including earnings attributable to redeemable and noncontrolling interests | 2001.770616 | |
| Net earnings attributable to redeemable and noncontrolling interests | 2.00% | 40.03541233 |
| Net earnings attributable to General Mills | 1961.735204 | |
| Balance Sheet | 2014 |
| ($ millions) | Estimated |
| Assets | |
| Cash and cash equivalents | 783.8378 |
| Receivables | 1511.68 |
| Inventories | 1623.664 |
| Deferred income taxes | 130.6396 |
| Prepaid expenses and other | 466.5701 |
| Total current assets | 4516.3915 |
| Land, buildings, and equipment | 0 |
| Goodwill | 8622.2 |
| Other intangible assets | 5015.1 |
| Other assets | 877.1518 |
| Total assets | 19030.8433 |
| Liabilities and equity | |
| Accounts payable | 0 |
| Short-term debt (plug) | 0 |
| Current portion of long-term debt | 1181.9 |
| Notes payable | 0 |
| Other current liabilities | 5293.9 |
| Total current liabilities | 6475.8 |
| Total long-term debt | 0 |
| Deferred income taxes | 1455.699 |
| Other liabilities | 2052.909 |
| Total liabilities | Answer |
| Redeemable interest | 967.5 |
| Stockholders equity | |
| Common stock | 75.5 |
| Additional paid-in capital | 1166.6 |
| Retained earnings | 12664.3352 |
| Common stock in treasury | -3,687.20 |
| Accumulated other comprehensive loss | -1,585.30 |
| Total stockholders’ equity | 8,633.94 |
| Noncontrolling interests | 456.3 |
| Total equity | 9,090.24 |
| Total liabilities and Equity | 19,030.84 |
