Kelloggs Analysis

1203 Words3 Pages
bulb-icon

Recommended: External analysis of kellogg

Kelloggs Analysis (1997 Financial Analysis) Introduction: Kellogg Company and its subsidiaries are engaged in the manufacture and marketing of ready-to-eat cereal and convenience food products on a worldwide basis. The principal products of the Company are ready-to-eat cereals and convenience food products, which are manufactured in 20 countries and distributed in more than 160 countries. The Company's products are generally marketed under the Kellogg's and Morningstar Farms names, and are sold principally to the grocery trade through direct sales forces for resale to consumers. The Company uses broker and distribution arrangements for certain products, as well as in less-developed market areas. In the United States, in addition to ready-to-eat cereals, the Company produces and distributes toaster pastries, frozen waffles, frozen pancakes, crispy marshmallow squares, cereal bars and meat alternatives. The Company also markets these and other convenience food products in various locations throughout the world. Liquidity: LIQUIDITY 1997 1996 UQ MED LQ Current Ratio 0.8856x .6951x 2.7x 1.9x 1.6x Acid Test Ratio 0.459 0.3802 1.2x .8x 1.6x Net Working Capital -189,600,000 -670,400,000 645,412,000 Kellogg’s 1997 current ratio and acid test ratio when compared to 1996 figures indicates a positive trend considering liquidity. When compared to their peers Kellogg’s is not as liquid. The change that effected current liabilities the most was a decrease in current maturities of long-term debt of $290,000,000. Notes payable also decreased in 1997 to $368,600,000 from $652,600,000 in 1996. The increase in net working capital is also due mainly to reductions in current maturities of long-term debt as well as notes payable. Kellogg’s net working capital which is negative, when compared to peers illustrates that they are very illiquid. Efficiency: EFFICIENCY 1997 1996 UQ MED LQ A/R Turnover 11.6257 11.3644 14.9 11.4 9.8 A/R Turnover in Days 31.395 32.118 24 32 37 Inventory Turnover 7.5296 7.3497 13.9 9.6 7.5 Inventory Turnover in Days 48.4754 49.6619 26 38 49 Operating Cycle 79.8704 81.7979 50 70 86 When comparing Kellogg’s 1997 A/R turnover to 1998 it has increased by .26x moving it slightly past t... ... middle of paper ... ...00 total assets 4,877,600,000 5,050,000,000 0.111940299 0.105148515 equity multipilier total assets 4,877,600,000 5,050,000,000 SHE 997,500,000 1,282,400,000 4.889824561 3.937928883 Investor: Earnings per share 1.32 1.25 net income (-preffered dividends) INFO GIVEN INFO GIVEN weighted average number of common stocks outstanding P/E ratio market price 49.63 32.75 Diluted earnings per share 1.36 1.25 36.5 26.2 Divedend payout Dividend per common share 0.87 1.1 Diluted earnings per share 1.32 1.25 0.659090909 0.88 % of earnings retained Net income minus all dividends 185,900,000 187,300,000 Net income 546,000,000 531,000,000 0.3405 .3527 Dividend Yield Dividend per common share 0.87 1.1 market price per share 49.63 32.75 1.75 3.36 Book value total stockholders equity 997,500,000 1,282,400,000 minus prefered stock equity 0 0 number of common shares outstanding 414,800,000 311,500,000

Show More
Related

  • The Nutri-Grain Bar In The 1990's

    1873 Words  | 4 Pages

    Nutri-Grain cereal bars were created by the Kellogg Company and first introduced in the 1970’s Australia. They were later introduced to the United States and other countries. As more women began to work outside the home, the ritual of a family breakfast became obsolete as many individuals turned to quicker solutions for breakfast. The Nutri-Grain bar soon became popular as the on-the-go snack during the 1990’s. The cereal bar also comes in a variety of flavors that kids love, from blueberry to strawberry yogurt and has the texture a soft, homemade cookie. This television commercial centers on the theme of fostering a relationship between today’s kids and nature (see Appendix A). As the youth of today spends more time in the electronic world,

    Read More

  • Reese's Cereal Analysis

    524 Words  | 2 Pages

    “For the first time in the history of the world, every human being is now subjected to contact with dangerous chemicals, from the moment of conception until death.” Why do people consciously consume unhealthy, processed foods which big corporations in America distribute? These foods can lead to potentially harmful affects on the human body. So why are these risky products sold and consumed? The main reasons are because processed foods taste great and companies make large profits from these unwholesome products. General Mills is the 6th largest food company in the world, and uses genetically modified ingredients, preservatives, and artificial flavors in their products. The product that will be analyzed will be the tasty, mouthwatering breakfast favorite, Reese’s Puffs.

    Read More

  • Salt, Sugar, and Fat: Is It Cereal or Candy?

    664 Words  | 2 Pages

    John Harvey Kellogg wanted to cure “Americanitis”, which was the stomachache caused by the typical American breakfast. This breakfast consisted of sausage, fried ham, beefsteak, bacon, with whiskey and salt added on top. He decided to build a tiny health center that helped American improve their heath. In that center, he provided tips for healthy eating, and exercises. He did not allow fats, salt, or sugar in his clinic. In 1894, he took a trip to Denver, where he met an entrepreneur who invented a cereal made of shredded wheat. This inspired Kellogg to take this idea back home, and share with his brother, Will. Kellogg and his brother began to experiment, and created many cereals. They then met C.W. Post, and decided to collaborate and were eventually called themselves The Big Three. They invented 108 different brands of cereals. In the 1940s, they began adding a candy coating to the cereal. The Big Three controlled about 85% of the cereal market. The public’s enthusiasm for cereal grew drastically because women, who had children, had more time in the morning. Although convenience was the key to starting the day, the Big Three could not control the breakfast table without being finessed.

    Read More

  • Pop-Tarts

    658 Words  | 2 Pages

    Post Cereals was the first company to come up with the idea for a pastry that would later inspire Kellogg's Pop-Tarts. In the early part of the 1960s, Post began developing a method of packaging dog food in foil in order to keep it fresh and avoid refrigeration. They began applying this method to food for human consumption and created a new breakfast pastry that could be prepared in a toaster and would complement their already popular cold cereals. The announcement of this new breakfast pastry, which Post had decided to call “Country Squares,” came in 1963. Because the product was released so hastily, however, one of Post's biggest competitors, Kellogg, was able to come up with their own version and release it six months later. Even though Post had released their Country Squares prior to Kellogg's version, their sales were lackluster. Many believed that this was due in part to their name. In a time of progressive pop culture, the name Country Squares could be seen as a backward way of thinking. The developers working on the proje...

    Read More

  • Dupont Case

    1919 Words  | 4 Pages

    DuPont is a very big company with a low debt policy designed to maximize financial flexibility and insulate operations from financial constraints. It is one of the few AAA rated manufacturing companies due its investments are primarily financed from internal sources. However, because prices fell in the 1960’s thus DuPont’s net income fell also. The adverse economic conditions in 1970’s escalated inflation: increase in oil prices increased required inventory investments of the company. 1975 recession negatively affected DuPont’s net income by 33% and returns on capital and earnings per share fell. The company cut dividends in 1974 and working capital investment removed. Proportion of debt increased from 7% in 1972 to 27% in 1975 and interest coverage falls from 38 to 4.6. The company perceived increase in debt temporary but moved quickly to reduce its debt ratio by decreasing capital expenditures. Debt proportion dropped to 20%, interest coverage increased to 11.5 by 1979.

    Read More

  • Krispy Kreme's Financial Health

    1312 Words  | 3 Pages

    To begin the analysis on Krispy Kreme, the first analysis is that of the depreciation analysis. There are three different methods to calculate depreciation and they are straight-line, units-of-production and double-declining-balance (Larson, Wild, & Chiappetta, 2005). The Krispy Kreme Company uses the straight-line method to calculate their depreciation on building, machinery, equipment and leasehold improvements. The breakdown of the depreciation on property and equipment consist of land, buildings, machinery and equipment, leasehold improvements and construction in process (Larson, Wild, & Chiappetta, 2005). Krispy Kreme’s total gross property and equipment in 2002 was a total of $156,484,000 and in 2003, it was a total of $252,770,000. The accumulated depreciation for the year 2002 was a total of $43,907,000 and for the year 2003, the total was $50,212,000. To find the net property and equipment amount, taking the gross property and equipment and subtracting the accumulated depreciation is the equation used. The net property and equipment for the year 2002 would be $112,577,000 and 2003 would be $202,558,000. Once b...

    Read More

  • Pepsico Restaurants Case Analysis

    1635 Words  | 4 Pages

    At the end of 1991, PepsiCo had EBITDA of $2.1 billion or operating profit margin of 10.8% - down from profit margins of 12.2% and 11.7% in 1990 and 1989, respectively. In addition, net sales only grew by 10.1% in 1991 – considerably low versus growth of 16.8% and 21.6% in 1990 and 1989, respectively. Recent acquisitions of Taco Bell franchises in 1988, bottling operations in 1989, Smiths Crisps Ltd. and Walkers Crisps Holding Ltd. in 1989, and Sabritas S.A. de C.V. in 1990 aided sales in growth in 1989 and 1990. Additionally, a joint venture with the Thomas J. Lipton Co. in 1991 to develop and market new tea-based beverages may lead to greater sales in the future. However, there is some need for an immediate return on its investments in order to sustain historical revenue growth and increase the current profit margins.

    Read More

  • Apple Receivable Ratio Essay

    1367 Words  | 3 Pages

    Overall, Horizontal analysis and financial ratios are essential factors that businesses use to monitor its liquidity. Therefore, in order to improve Apple’s ratios and profitability, the company needs to implement a strategy to increase the company’s liquidity. Business owners or managers should monitor current ratio and acid test ratio as these ratios help us to ensure the company has the proper liquid assets to pay current liabilities, to stay in operations and to expand the company. As we noted in our acid test ratio and current ratio for the company, we show a lower ratio for acid test ratio than the current ratio, which means that the company’s current assets rely on inventory. Therefore, the company needs to convert old inventory into

    Read More

  • Krispy Kreme Case Study

    1002 Words  | 3 Pages

    The chief element of Krispy Kreme's strategy is to deliver a better doughnut and to appeal to customers in new ways. They have taken great steps to insure customer satisfaction from the use of their proprietary flour recipe to their automated doughnut making machines. They have chosen to target mainly markets with 100,000 households. They also were exploring smaller-sized stores for secondary markets.

    Read More

  • Mondelez International's Product Analysis

    1048 Words  | 3 Pages

    In the second quarter of 2013, Net Revenues were $8.6billions (increased by 0.8%). ("Mondelez international reports," 2013) Organic Net Revenues increased by 3.8%, they were leaded by strong/ volume mix of 3.6% points as well as favorable pricing of 0.2% points. ("Mondelez international reports," 2013) Power Brands are growing continually by up of 7.9%, and Milka is posting double-digit increase. ("Mondelez international reports," 2013)

    Read More

  • Analysis Of Kellogg's Pp Cereal Advertisement

    1088 Words  | 3 Pages

    Since I was a little girl, my mother always made it clear that a husband was unobtainable if a woman could not properly tend to his needs. I learned how to cook, how to clean, how to do laundry, and I even learned how to take care of my younger siblings all because, according to my mother, these responsibilities were a woman’s duty; it was her job. For centuries, this has been the mindset of every woman, which has been passed down from generation to generation. A stereotype that has influenced a culture and defined a human being. In this 1930’s Kellogg’s PEP Cereal advertisement we witness yet another stereotype defining women into this sexist housewife persona. Through the use of clothing and appearance, text and audience the ad conveys a

    Read More

  • Comparing the Profitability of Pepsi and Coca Cola Companies

    1829 Words  | 4 Pages

    The purpose of this report is to compare financial reports from the two largest soft drink manufacturers in the world. The Pepsi Co. and Coca Cola have been the industry's leaders in their market since the early 1900's. I will use relevant figures to determine profitability, and break down key ratios in profitability, liquidity, and solvency. By breaking down financial statements, and converting them to percentages and ratios, comparisons can be made between competitors regardless of size.

    Read More

  • Analysis of Dunkin Brands

    1134 Words  | 3 Pages

    The first Dunkin Donuts was opened in 1950 by founder Mr. Bill Rosenburg in Quincy, MA. Five years later the very first franchised branch was licensed. Sixty years later, under “Dunkin Brands Inc.”, there are now over 10,000 stores including more than 7,000 franchised locations, all in 36 of the United States. There are over 3,000 Dunkin stores internationally in 32 countries other than the United States. Dunkin' Brands Group, Inc. is one of the world's leading franchisors of quick service restaurants serving hot and cold coffee and baked goods, as well as hard-serve ice cream. Dunkin Brands is head quartered in Canton, MA (Company Snapshot).

    Read More

  • Financial Ratio Analysis: Financial Stability And Performance

    1288 Words  | 3 Pages

    Upon examining P&G’s financial ability to meet short-term obligations, it is apparent that not only have their current liabilities exceeded current assets over the last three years, but close to half of their current assets have been tied up in inventories and other illiquid assets. For example, assessing both the quick and current ratio respectively shows that less than 70% of the firm’s current assets could be converted immediately to pay current commitments, but a little more than 90% of the firm’s liabilities would ultimately be covered. Though, based on industry average similar findings occur; therefore, it must not be uncommon for industries similar to P&G to

    Read More

  • Financial Analysis: The Financial Analysis Of Nestle

    1706 Words  | 4 Pages

    The current ratio of Nestle in the three years was decrease as its current liabilities more than its current assets and the current liabilities were continuing increase. The loan and borrowing were largely increase from RM7,555,000 to RM84,313,000 as we can see in 2013 and 2014 so the debt that company needed to pay was raise (Maybank, 2014). Nestle tend to borrow and apply loan more to expand its business and invest in good quality project. The current assets of Nestle is not able to cover its liabilities, it may unable to meet its obligation in short term compared to Duty Lady Milk. The current ratio of Duty Lady Milk is larger than Nestle, its current assets is able to cover its liabilities as the current ratio

    Read More

More about Kelloggs Analysis

Open Document