Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet
ID: 2755025 • Letter: A
Question
Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet
Following are the income statements and balance sheets of General Mills, Inc.
Forecast General Mill's fiscal 2012 income statement using the following relations (assume "no change" for accounts not listed).
Instructions: Round answers to one decimal place. Do not use negative signs with your answers. Remember to use rounded forecasted net sales with subsequent calculations.
Forecast General Mill's fiscal 2012 balance sheet using the following relations (assume"no change" for accounts not listed). Assume that all capital expenditures are purchases of land, building and equipment, net. ($ millions).
Instructions: Round answers to one decimal place. Do not use negative signs with your answers. Remember to use rounded forecasted net sales with subsequent calculations. Round answers to one decimal place.
Incorrect
0.00 points out of 1.00
Fiscal Years Ended ($ millions) May 29, 2011 May 30, 2010 Net Sales $ 14,880.2 $ 14,635.6 Cost of sales 8,926.7 8,835.4 Selling, general and administrative expenses 3,192.0 3,162.7 Divestitures gain, net 17.4 -- Restructuring, impairment, and other exit costs 4.4 31.4 Operating income 2,774.5 2,606.1 Interest, net 346.3 401.6 Earnings before income tax expense and equity in income of affiliates 2,428.2 2,204.5 Income tax expense 721.1 771.2 After-tax earnings from joint ventures 96.4 101.7 Net earnings including noncontrolling interests 1,803.5 1,535.0 Net earnings attributable to noncontrolling interests 5.2 4.5 Net earnings attributable to General Mills $ 1,798.3 $ 1,530.5
Explanation / Answer
Balance Sheet of General Mills, Inc Forecasted Balance Sheet for 2012 Estimated Balance Sheet May 29, 2011 May 29, 2012 (Forecasted) Working Base ($ millions) Assets Cash and cash equivalents 619.6 656.22 Cash/Net Sales = 4.20% Receivables 1,162.30 1,218.69 Receivables/Net sales = 7.80% Inventories 1,609.30 1,687.41 Inventories/Net Sales = 10.80% Deferred income taxes 27.3 31.25 Deferred Income Taxes/Net Sales = 0.20% Prepaid expenses and other current assets 483.5 499.97 Prepaid expenses and other current assets/Net Sales = 3.20% Total current assets 3,902.00 4,093.54 Land, buildings and equipment 3,345.90 3,340.76 Capital Expenditures/Net Sales = 4.40% + Opening Balance and Depreciation/Prior Year Net PPE = 20.70% Goodwill 6,750.80 6,750.80 Assumed to be same in the absence of information Other intangible assets 3,813.30 3,813.30 Assumed to be same, since it is mentioned as No amortisation Other assets 862.5 906.20 Other Assets/Net Sales = 5.80% Total assets 18,674.50 18,904.61 Liabilities and Equity Accounts payable 995.1 1,046.82 Accounts Payable/Net Sales = 6.70% Current portion of long-term debt 1,031.30 733.60 As given Notes payable 311.3 - Assumed to be Zero in the absence of information Other current liabilities 1,321.50 2,153.55 Other Current Liabilities/Net Sales = 8.90% + Dividends Payable/Net Income = 40.60% Total current liabilities 3,659.20 3,933.97 Long-term debt 5,542.50 4,808.90 Long Term Debt less current portion maturing in 2013 Deferred income taxes 1,127.40 1,187.44 Deferred Income Taxes/Net Sales = 7.60% Other liabilities 1,733.20 1,812.41 Other Liabilities/Net Sales = 11.60% Total liabilities 12,062.30 11,742.72 Stockholders' equity Common stock, 754.6 shares issued, $0.10 par value 75.5 75.50 No change in the absence of information Additional paid-in capital 1,319.80 1,319.80 No change in the absence of information Retained earnings 9,191.30 7,861.69 Value in 2011 less Dividends Common stock in treasury, at cost, shares of 109.8 and 98.1 -3,210.30 -3,210.30 No change in the absence of information Accumulated other comprehensive loss -1,010.80 -1,010.80 Total shareholders' equity 6,365.50 5,035.89 Noncontrolling interests 246.7 2,126.00 Including current year income Total equity 6,612.20 7,161.89 Total Liabilities and Equity 18,674.50 18,904.61