Question

Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet
Following are the income statements and balance sheets of General Mills, Inc.

Income Statement, Fiscal Years Ended ($ millions)	May 29, 2011	May 30, 2010
Net Sales	$ 14,880.2	$ 14,635.6
Cost of sales	8,926.7	8,835.4
Selling, general and administrative expenses	3,192.0	3,162.7
Divestitures (gain), net	(17.4)	--
Restructuring, impairment, and other exit costs	4.4	31.4
Operating income	2,774.5	2,606.1
Interest, net	346.3	401.6
Earnings before income tax expense and equity in income of affiliates	2,428.2	2,204.5
Income tax expense	721.1	771.2
After-tax earnings from joint ventures	96.4	101.7
Net earnings including noncontrolling interests	1,803.5	1,535.0
Net earnings attributable to noncontrolling interests	5.2	4.5
Net earnings attributable to General Mills	$ 1,798.3	$ 1,530.5

Balance Sheet ($ millions)	May 29, 2011	May 30, 2010
Assets
Cash and cash equivalents	$ 619.6	$ 673.2
Receivables	1,162.3	1,041.6
Inventories	1,609.3	1,344.0
Deferred income taxes	27.3	42.7
Prepaid expenses and other current assets	483.5	378.5
Total current assets	3,902.0	3,480.0
Land, buildings and equipment	3,345.9	3,127.7
Goodwill	6,750.8	6,592.8
Other intangible assets	3,813.3	3,715.0
Other assets	862.5	763.4
Total assets	$ 18,674.5	$ 17,678.9
Liabilities and Equity
Accounts payable	$ 995.1	$ 849.5
Current portion of long-term debt	1,031.3	107.3
Notes payable	311.3	1,050.1
Other current liabilities	1,321.5	1,762.2
Total current liabilities	3,659.2	3,769.1
Long-term debt	5,542.5	5,268.5
Deferred income taxes	1,127.4	874.6
Other liabilities	1,733.2	2,118.7
Total liabilities	12,062.3	12,030.9
Stockholders' equity
Common stock, 754.6 shares issued, $0.10 par value	75.5	75.5
Additional paid-in capital	1,319.8	1,307.1
Retained earnings	9,191.3	8,122.4
Common stock in treasury, at cost, shares of 109.8 and 98.1	(3,210.3)	(2,615.2)
Accumulated other comprehensive loss	(1,010.8)	(1,486.9)
Total shareholders' equity	6,365.5	5,402.9
Noncontrolling interests	246.7	245.1
Total equity	6,612.2	5,648.0
Total Liabilities and Equity	$ 18,674.5	$ 17,678.9

Forecast General Mill's fiscal 2012 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	4.0%
Cost of sales/Net sales	60.0%
Selling, general and administrative expenses/Net sales	21.5%
Divestitures (gain), net	$--
Restructuring, impairment, and other exit costs	$--
Interest, net	$346.3
Income tax expense/Pretax income	29.7%
After-tax earnings from joint ventures	$96.4
Net earnings attributable to noncontrolling interests/Net earnings before attribution	0.5%

• Round answers one decimal place.

• Do not use negative signs with your answers.

Income Statement, Fiscal Years Ended ($ millions)	2012 Estimated
Net sales	$Answer Correct Mark 1.00 out of 1.00
Cost of goods sold	Answer Correct Mark 1.00 out of 1.00
Selling, general and administrative expenses	Answer Correct Mark 1.00 out of 1.00
Divestitures (gain), net	Answer Correct Mark 1.00 out of 1.00
Restructuring, impairment, and other exit costs	Answer Correct Mark 1.00 out of 1.00
Operating income	Answer Correct Mark 1.00 out of 1.00
Interest expense	Answer Correct Mark 1.00 out of 1.00
Earnings before income tax expense and equity in income of affiliates	Answer Correct Mark 1.00 out of 1.00
Income tax expense	Answer Correct Mark 1.00 out of 1.00
Equity in income of affiliates	Answer Correct Mark 1.00 out of 1.00
Net earnings including noncontrolling interests	Answer Correct Mark 1.00 out of 1.00
Net earnings attributable to noncontrolling interests	Answer Correct Mark 1.00 out of 1.00
Net earnings attributable to General Mills	$Answer Correct Mark 1.00 out of 1.00

Forecast General Mill's fiscal 2012 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).

Receivables/Net sales	7.8%
Inventories/Net sales	10.8%
Deferred income tax/Net sales	0.2%
Prepaid expenses and other current assets/Net sales	3.2%
Other intangible assets	$0 amortization
Other Assets/Net sales	5.8%
Accounts payable/Net sales	6.7%
Other current liabilities/Net sales	8.9%
Current portion of long-term debt	$733.6
Deferred income taxes/Net sales	7.6%
Other liabilities/Net sales	11.6%
Noncontrolling interests	*
Capital expenditures/Net sales	4.4%
Depreciation/Prior year net PPE	20.7%
Dividends/Net income	40.6%
Current maturities of long-term debt in fiscal 2013	$733.6
*increase by net income attributable to noncontrolling interests and assume no dividends

• Round answers one decimal place.  

• Do not use negative signs with your answers.

Balance Sheet ($ millions)	2012 Estimated
Assets
Cash and cash equivalents	$Answer Incorrect Mark 0.00 out of 1.00
Receivables	Answer Correct Mark 1.00 out of 1.00
Inventories	Answer Correct Mark 1.00 out of 1.00
Deferred income taxes	Answer Correct Mark 1.00 out of 1.00
Prepaid expenses and other	Answer Correct Mark 1.00 out of 1.00
Total current assets	Answer Incorrect Mark 0.00 out of 1.00
Land, buildings, and equipment	Answer Incorrect Mark 0.00 out of 1.00
Goodwill	Answer Incorrect Mark 0.00 out of 1.00
Other intangible assets	Answer Incorrect Mark 0.00 out of 1.00
Other assets	Answer Correct Mark 1.00 out of 1.00
Total assets	$Answer Incorrect Mark 0.00 out of 1.00
Liabilities and equity
Accounts payable	$Answer Correct Mark 1.00 out of 1.00
Current portion of long-term debt	Answer Correct Mark 1.00 out of 1.00
Notes payable	Answer Incorrect Mark 0.00 out of 1.00
Other current liabilities	Answer Correct Mark 1.00 out of 1.00
Total current liabilities	Answer Incorrect Mark 0.00 out of 1.00
Total long-term debt	Answer Incorrect Mark 0.00 out of 1.00
Deferred income taxes	Answer Correct Mark 1.00 out of 1.00
Other liabilities	Answer Correct Mark 1.00 out of 1.00
Total liabilities	Answer Incorrect Mark 0.00 out of 1.00
Stockholders equity
Common stock	Answer Incorrect Mark 0.00 out of 1.00
Additional paid-in capital	Answer Incorrect Mark 0.00 out of 1.00
Retained earnings	Answer Incorrect Mark 0.00 out of 1.00
Common stock in treasury	Answer Incorrect Mark 0.00 out of 1.00
Accumulated other comprehensive loss	Answer Incorrect Mark 0.00 out of 1.00
Total shareholders' equity	Answer Incorrect Mark 0.00 out of 1.00
Noncontrolling interests	Answer Incorrect Mark 0.00 out of 1.00
Total equity	Answer Incorrect Mark 0.00 out of 1.00
Total liabilities and Equity	$ Answer Incorrect Mark 0.00 out of 1.00

Answer 1

Income Statement,
Fiscal Years Ended ($ millions)	May 29-2012
Net Sales	$        15,475.41
Cost of sales	$          9,285.24
Selling, general and administrative expenses	$          3,327.21
Divestitures (gain), net	$             (17.40)
Restructuring, impairment, and other exit costs	$                4.40
Operating income	$          2,841.15
Interest, net	$            346.30
Earnings before income tax expense and equity in income of affiliates	$          2,494.85
Income tax expense	$            740.97
After-tax earnings from joint ventures	$              96.40
Net earnings including noncontrolling interests	$          1,850.28
Net earnings attributable to noncontrolling interests	$                9.25
Net earnings attributable to General Mills	$          1,841.03
Balance Sheet
($ millions)
Assets
Cash and cash equivalents	$707.22
Receivables	$          1,207.08
Inventories	$          1,671.34
Deferred income taxes	$              30.95
Prepaid expenses and other current assets	$            495.21
Total current assets	$          4,111.81
Land, buildings and equipment	$          3,334.22
Goodwill	$          6,750.80
Other intangible assets	$          3,813.30
Other assets	$            897.57
Total assets	$        18,907.70
Liabilities and Equity
Accounts payable	$          1,036.85
Current portion of long-term debt	$            733.60
Notes payable	$            311.30
Other current liabilities	$          1,321.50
Total current liabilities	$          3,403.25
Long-term debt	$          4,808.90
Deferred income taxes	$          1,176.13
Other liabilities	$          1,795.15
Total liabilities	$        11,183.43
Stockholders' equity
Common stock, 754.6 shares issued, $0.10 par value	$              75.50
Additional paid-in capital	$          1,319.80
Retained earnings	$        10,294.12
Common stock in treasury, at cost, shares of 109.8 and 98.1	$         (3,210.30)
Accumulated other comprehensive loss	$         (1,010.80)
Total shareholders' equity	$          7,468.32
Noncontrolling interests	$            255.95
Total equity	$          7,724.27
Total Liabilities and Equity	$        18,907.70

Though utmost care has been taken while answering, but if found anything incorrect, Please get into comments and I shall rectify the same, else please give this a thumbs up. Thanks