Kellogg Company is the world's leading producer of ready-to-eat cereal products. In recent years the company has taken numerous steps aimed at improving its profitability and earnings per share. Presented below are some basic facts for Kellogg Corporation.

(a) What are some of the reasons that management purchases its own stock?

(b) Explain how earnings per share might be affected by treasury stock transactions.

(c) Calculate the ratio of debt to total assets for 2006 and 2007, and discuss the implications of thechange.

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(all dollars in millions) Net sales Net earnings Total assets Total liabilities Common stock, $0.25 par value Capital in excess of par value Retained earnings Treasury stock, at cost Number of shares outstanding (in millions) 2007 $11,776 1,103 11,397 8,871 105 388 4,217 1,357 419 2006 $10,907 1,004 10,714 8,645 105 292 3,630 912 419