ACC351A_midterm_spring_2009_solutions_final - ACC351A...

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ACC351A MidTerm NAME Refer to the selected pages of Kellogg’s 2006 annual report, attached.   You, with your brand new Masters degree, were hired by Kellogg to perform interesting  financial analysis.   The CFO asks you to compute the following: 1. (15%)  What is the amount of the total outstanding debt, obligations and  commitments of Kellogg at year end 2006? On balance sheet $8,645  Off balance sheet    575 Total                     $9,220 2. (20%)  Compute the following ratios for Kellogg for the year ending 2006 and  indicate if they are better/worse than General Mills (GIS).  a. Net Profit Margin (Return on Sales) b. Return on Equity  c. Long Term Debt to Equity d. Annual Revenue (Sales) Growth a.  Net Earnings/Net Sales = 1,004.1/10,906.7=9.2% b.  ROE = Net Earnings/Average Equity = 1,004.1/(2,069+2,283.7)/2 = 46.1% c.  LTD/ Average Equity =  3,053/(2,069+2283.7)/2 = 140% d.  Revenue Growth (10,907 – 10,177) / 10,177 = 7.2% ACC351 Midterm Page 1 of 3 Neyland
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