Kellogg’s Financial Analysis
1. FINANCIAL ANALYSIS
(a) Complete a five-year (most current full five years) financial analysis for Kellogg’s and each of its major competitors. Use each company’s annual reports for financial information.
Present the information as ratios and trends (graphs and pie charts are very helpful for showing trends and relative comparisons). Use relevant metrics for your industry (e.g. if you are in the retail business and running brick-and-mortar store, then inventory turns, sales dollars per square foot of floor space, and sales per employee would be some appropriate measures). Also, use general measures such as ROA (return on assets), ROIC (Return on invested capital), profit margin, and balance sheet information such as debt ratios, free cash flow, etc.
FINANCIAL COMPARISION EXAMPLE
Financial Data (most current full year)
Metric Co. 1 Co. 2 Co. 3 Co. 4
Revenues
Net Income
Net Profit Margin
Return on Assets
Debt to Equity
Return on Invested Capital
Revenue Growth (3 yr. avg.)
Earnings Growth (3yr.avg.)
Annual Inventory Turnover
Sales/Square Foot
Sales/Employee
Net Income/Employee
Free Cash Flow
Cash and short-term investments
Free Cash Flow per Sales
(b) What does the financial analysis tell you about Kellogg’s relative to the competition? Where is your company doing better than its competitors? Where does it need to improve?