Team 4 Outline - 5. Geographically Spread close to grain...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Team 4 Kellogg Cereal Industry 1. Kellogg 1. Solvency 1. Debt Ratio 1. 0.87 2. Liquidity 1. Current Ratio 1. 0.71 3. Profitability 1. Profit Margin 1. 9% 4. Repayment capacity 2. General Mills 1. Solvency 1. Debt Ratio 1. 0.66 2. Liquidity 1. Current Ratio 1. 0.745 3. Profitability 1. Profit Margin 1. 9.5% 4. Repayment capacity 3. Kellogg is using more debt to fund their firm. Profit Margins are and have been fairly steady 4. Industry ( IBISWorld ) 1. Impact of current recession will not be felt in this industry. Cereal is a staple purchase and is unresponsive to changes in disposable income 2. Grains and Corn prices could hamper operating cost and profitability 3. Import and Export Growth has been in a decline 4. Highly Concentrated Industry – Top Four Firms account for 86% market share
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 5. Geographically Spread close to grain production (great plains, mid west, Great Lakes) 6. There has been an increasing demand for single serve cereal bars 7. Industry is price sensitive due to the availability of much cheaper off-brands 5. DuPont Identity 1. Kellogg 1. Turns 1.17 2. Earns .09 3. Leverage .87 4. ROE 0.0916 2. General Mills 1. Turns .717 2. Earns .095 3. Leverage .66 4. ROE 0.0449 3. Kellogg is using their assets and debt more effectively than General Mills. 4. Kellogg has a ROE double that of General Mills 6. Risk Associated With Firms Return 7. Risk Associated With Industries Return 8. Suggestions for Improvement of Shareholder Value 9. Executive Summary...
View Full Document

This note was uploaded on 09/23/2009 for the course AEB 3144 taught by Professor Gunderson during the Spring '09 term at University of Florida.

Ask a homework question - tutors are online