General Mills

Section 5 Financial Analysis

The following analysis came from the information obtained from moneycentral .msn .com . The analyses are of the comparative facts of General Mills among it peers and the industry it belongs to

Figure 1 . Financial Condition

Financial Condition GIS KFT DA K CAG Industry S

500

Debt /Equity Ratio 1 .26 0 .36 1 .17 2 .48 0 .76 1 .17 1 .24

Current Ratio 0 .5 0 .9 1 .3 0 .6 1 .7 1 1 .3

Quick Ratio 0 .3 0 .5 1 .2 0 .4

1 0 .7 1 .1

Interest Coverage 5 .7 8 .7 33 .4 6 .1 3 .2 10 37 .4

Leverage Ratio 55 .7 26 .3 54 71 .2 43 .2 49 .6 28 .8

Book Value /Share 15 .45 18 .37 5 .37 5 .48 9 .24 9 .76 17 .73 The following figure describes the financial condition , not only of General Mills , but of it peers . The data clearly shows that after Kelloggs , The firm has a high debt /equity ratio , meaning that it may have incurred too much debt with respect to its capital . It may have to look more closely on raising capital through stocks and bonds , and not incurring any more debt , because it may endanger the company 's current standing . Furthermore , Kraft Foods is the one heading the pack with less debt and more of capital that it may boast of . The industry , on the other hand seems to be close to that of General Mills , denoting it is till doing fine although the greater concern would be that of Kraft Food 's leadership . General Mills is not at par with the industry in this aspect as it has a great deal of catching up to do in terms of the industry 's current and quick ratio . Kraft Foods ' leadership is still evident in this part of the data . This may show that more investors are inclined to trust Kraft for the way they handle investment processes The current ratio expounds on this observation because it explains that there are more debts than assets . This may cause problems because they may have problems involving debt and asset management . This may also serve as a ground for investors not trusting their money to the company The quick ratio back this claim . Again at the helm of things is Kraft Foods , showing that they have more of their assets than their liabilities and can till accumulate debts that their assets can afford However , General Mills swung back in terms of its Book Value and Leverage , indicating that although it has many debts , it still has a high value in the market . In fact , it is second to Kraft Foods , an indication that it still is a good firm to invest on . Generally , the company would do better in the next five or more years , depending in its performance of it financial processes , especially the alarming rate of its ratios . One cannot help but think...