Business valuation

Essay by maek86University, Bachelor'sA+, April 2012

download word file, 4 pages 0.0

Individual Company Report

General Mills is considered to be in the consumer goods industry and sub sectored in processed and packaged goods industry. General Mills manufactures many different types of consumer ready to eat foods. Offering a wide variety of products to distributors and supply chain stores; General Mills manufactures anything from pizza to cereal, and a variety of grain health foods. Mergent Online lists General Mills as being in the food sector industry within a sub sector of breakfast cereal manufactures.

The main line of business for General Mills is cereal. General Mills also derives a major portion of its business from a range of diversified foods. "Its product categories in the United States include ready-to-eat cereals, refrigerated yogurt, ready-to-serve soup, dry dinners, shelf stable and frozen vegetables, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, grain, fruit and savory snacks, and a variety of organic products including soup, granola bars, and cereal."

(NY Times)

During the last five years General Mill has fared well. General Mills has had a total return of 60.8% with assumed reinvestment of dividends and including capital appreciation. General Mills has also maintained an industry low PE ratio of 14.78, lower than top industry competitors such as Kraft (20.39) and Kellogg (16.08). Currently General Mills bottom line has decreased due to high transportation costs, total costs have been up almost 20% on the income statement. This has decreased operating profit from 638.9 million to 405.6 million. Total current assets of General Mills have decreased from 2009 to present, primarily due to a decrease in cash. Although cash has decreased total current assets the bottom line of total assets has increased. It appears that General Mills is investing in long-term assets such as PPE for future company...