Companies That You Need To Review For This Assignment ✓ Solved

Companies That You Need To Review For This Assignment

The companies that you need to review for this assignment are: 1) Kellogg 2) General Mills.

You need to answer the following questions for each company separately:

  1. What is the third statement? What is its purpose? How many years of data are presented there? What period does it cover?

  2. What is the fourth statement? What is its purpose? How many years of data are presented there? What period does it cover?

  3. What is the fifth statement? What is its purpose? How many years of data are presented there? What period does it cover?

  4. Look at the Notes to the financial statements; what is your company’s fiscal year end? In what segments does the company operate?

  5. Review the Notes to the financial statements; how do your companies recognize revenue?

Paper For Above Instructions

In this assignment, we will analyze the financial statements of Kellogg Company and General Mills, providing insights into their third, fourth, and fifth statements, the fiscal year end, operational segments, and revenue recognition strategies.

Kellogg Company Analysis

1. Third Statement

The third statement in Kellogg's financial reports is the Cash Flow Statement. Its purpose is to provide insights into the cash inflows and outflows of the company during a specific period. This statement sheds light on the company's operational efficiencies and cash management. The Cash Flow Statement typically presents data for the last three years, covering the fiscal periods from 2021 to 2023.

2. Fourth Statement

The fourth statement is the Statement of Changes in Stockholders' Equity. This statement details changes in equity from transactions such as stock issuance and dividends. The purpose is to inform shareholders about the changes in ownership stake during the reporting period. It usually presents data for the last three years and covers the same fiscal years as the Cash Flow Statement.

3. Fifth Statement

The fifth statement is not often called a separate financial statement but usually refers to accompanying notes or supplementary financial information that provide more context to the financial statements. It focuses on significant accounting policies and notes that are essential to understanding the financial data presented. This information is also generally presented for the last three years, covering 2021 to 2023.

4. Fiscal Year End and Operational Segments

Kellogg Company's fiscal year ends on December 31. The company operates in various segments, including North America, Latin America, Asia Pacific, and Europe. Each segment represents different geographical areas and has distinct strategies tailored to varying consumer preferences and market conditions.

5. Revenue Recognition

Kellogg recognizes revenue primarily upon the transfer of control of products to customers, which usually occurs at the point of sale. The revenue recognition policy adheres to the guidelines set out in ASC 606 (Revenue from Contracts with Customers), allowing Kellogg to accurately report its revenues based on the contractual obligations and performance obligations fulfilled.

General Mills Analysis

1. Third Statement

For General Mills, the Cash Flow Statement serves as the third financial statement. Its purpose is similar to that of Kellogg's Cash Flow Statement, which outlines the inflows and outflows of cash within the company over a specified period, highlighting liquidity. It generally presents three years of data, covering the fiscal years from 2021 to 2023.

2. Fourth Statement

The forth statement for General Mills is also the Statement of Changes in Stockholders' Equity. It showcases transactions affecting owners' equity, such as retained earnings and dividends, providing investors with transparency regarding equity changes within the company. This statement presents data for the last three fiscal years, aligning with the cash flow reporting periods.

3. Fifth Statement

The fifth statement or accompanying notes provide context for the main financial statements, focusing on critical accounting policies and other necessary disclosures to aid users in interpreting the financial data correctly. These notes also cover a three-year span, corresponding to the primary financial data presented.

4. Fiscal Year End and Operational Segments

General Mills’ fiscal year also concludes on May 31. The company segments its operations into North America Retail, North America Foodservice, International, and Pet segment. Each segment reflects different product lines and market outreach.

5. Revenue Recognition

Revenue recognition at General Mills aligns with ASC 606, where revenue is recognized at the point of sale or when control of the products is transferred to customers. This pragmatic approach ensures that revenue reports are produced timely and reflect the real performance of the company.

Conclusion

Kellogg and General Mills’ financial statement analyses underscore the importance of the cash flow statement, the significance of changes in stockholder's equity, and the necessity of clear revenue recognition policies. Each company, while both operating in the food manufacturing sector, employs unique strategies and adjustments tailored to their market segments.

References

  • Kellogg Company. (2023). Annual Report. Retrieved from [Kellogg 10-K Report URL]

  • General Mills. (2023). Annual Report. Retrieved from [General Mills 10-K Report URL]

  • Financial Accounting Standards Board. (2014). ASC 606: Revenue from Contracts with Customers. Retrieved from [FASB URL]

  • Investopedia. (2023). Understanding Cash Flow Statements. Retrieved from [Investopedia URL]

  • MarketLine. (2023). Kellogg Company: Company Profile. Retrieved from [MarketLine URL]

  • MarketLine. (2023). General Mills: Company Profile. Retrieved from [MarketLine URL]

  • Kellogg Company. (2022). SEC Filings. Retrieved from [Kellogg SEC URL]

  • General Mills. (2022). SEC Filings. Retrieved from [General Mills SEC URL]

  • Yahoo Finance. (2023). Kellogg Company Financials. Retrieved from [Yahoo Finance URL]

  • Yahoo Finance. (2023). General Mills Financials. Retrieved from [Yahoo Finance URL]