The annual report for General Mills is included in Appendix C.

Required: (1) Compute the quick ratio on May 31, 1998, and May 25, 1997, as well as the accounts receivable turnover ratio, and the accounts payable turnover ratio for fiscal years 1998 and 1997. The accounts receivable and accounts payable at May 26, 1996 were $337.8 and $590.7, respectively. Write a short report evaluating the performance of General Mills.

(2) In Management’s Discussion and Analysis, the company discloses that sales volume grew 8% in 1998 compared with 1997. Compute the average amount by which the company’s sales prices changed from 1997 to 1998. How is your answer affected because 1998 was a 53-week fiscal year?

(3) The company does not disclose when it records revenue. Explain when you think it should record revenue. Explain why you think the company did not disclose its policy.

(4) Compute the company’s interest expense for the fiscal year 1998 on its current notes payable. Ignore amounts reclassified to long-term debt.

 TYK-1