I have do calculate ratios for the company Generals Mills and I have the link posted...

I have do calculate ratios for the company Generals Mills and I have the link posted below for the financial statements from thier website. I need work shown with the answers to get full grade so please post that too. Thank you

https://s22.q4cdn.com/584207745/files/doc_financials/2018/annual/FINAL-2018-Annual-Report.pdf

You are the newly appointed treasurer and your partner is the newly appointed controller of your company. In order to learn more about your company, you have decided to analyze the company’s financial performance over the last 2 years. To do this, you have decided to calculate the following ratios for the company’s 2 most recent years in the noted categories:

Profitability Ratios:

Gross Margin Percentage

EBIT Margin Percentage

Resource Management Ratios:

Age of Inventory

Age of Accounts Receivable

Age of Accounts Payable

Liquidity Ratio:

Current Ratio

Leverage Ratios

Debt-to-Assets Ratio

Debt-to-Equity Ratio

Interest Coverage

In addition, you have decided to evaluate the Return on Equity (ROE) of the company by calculating the DuPont Ratio, including the Profit Margin, Asset Turnover, and Financial Leverage Ratios.

Solutions

Expert Solution

	Fiscal Year
	2018	2017
1..Profitability Ratios:
Gross Margin %= Gross profit/Net Sales
(Net Sales-Cost of sales)/Net Sales=	(15740.4-10312.9)/15740.9=	(15619.8-10056)/15619.8=
	34.48%	35.62%

EBIT Margin %= EBIT/Net Sales	2509.3/15740.4=	2566.4/15619.8
	15.94%	16.43%


2..Resource Management Ratios:
Age of Inventory=365/Inventory Turnover ratio
ie. 365/(COGS/ Inventory)	365/(10312.9/1642.2)=	365/(10056/1483.6)=
	58	54


Age of Accounts Receivable=365/Receivables T.O.
ie. 365/(Net sales/Receivables)	365/(15740.4/1684.2)=	365/(15619.8/1430.1)=
	39	33


Age of Accounts Payable=365/Payables T.O.
ie. 365/(COGS/Payables)	365/(10312.9/2746.2)=	365/(10056/2119.8)
	97	77


3..Liquidity Ratio:
Current Ratio= Current assets/Current Liabilities	4123.7/7341.9	4061.4/5330.8
	0.56	0.76


4..Leverage Ratios
Debt-to- Total Assets Ratio	12668.7/30624=	7642.9/21812.6=
	41.37%	35.04%


Debt-to-Total Equity Ratio	12668.7/6141.1=	7642.9/4327.9=
	2.06	1.77


Interest Coverage=EBIT/Interest expense (times covered)	2509.3/373.7=	2566.4/295.1=
	7	9



ROE=Net Income/Total Equity	2131/6141.1=	1657.5/4327.9=
	34.70%	38.30%

Components of ROE-DuPont Equation :
ROE=PMAsset T.O.Financial Leverage

PM=Net Income/Net sales	2131/15740.4=	1657.5/15619.8=
	13.54%	10.61%


ATO=Sales/Total Assets
ie. Sales/Total assets	15740.4/30624=	15619.8/21812.6=
	0.51	0.72

Financial Leverage=Total Assets/ Total equity	30624/6141.1=	21812.6/4327.9=
	5	5

PMAsset T.O.Financial Leverage	34.70%	38.30%

jeff jeffy answered 1 year ago

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