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Answer the following questions based on McCormick & Company, Incorporateds (NYSE: MKC; Sparks, MD; hereafter, McCormick or the Company) 2014 Annual Report (containing the Companys

Answer the following questions based on McCormick & Company, Incorporateds (NYSE: MKC; Sparks, MD; hereafter, McCormick or the Company) 2014 Annual Report (containing the Companys 10-K) and the press release and related 10-Q filing for the second quarter ended May 31, 2015. These documents are available online at:

Annual report:

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjY4MzE3fENoaWxkSUQ9LTF8VHlwZT0z&t=1

Press release:

http://phx.corporate-ir.net/phoenix.zhtml?c=65454&p=irol-newsArticle&ID=2063942,

10-Q filing:

http://services.corporateir.net/SEC/Document.Service?id=P3VybD1hSFIwY0RvdkwyRndhUzUwWlc1cmQybDZZWEprTG1OdmJTOWtiM2R1Ykc5aFpDN XdhSEEvWVdOMGFXOXVQVkJFUmlacGNHRm5aVDB4TURNMk5EQXhOaVp6ZFdKemFXUTlOVGM9JnR5cGU9MiZmbj1N Y0Nvcm1pY2tDb21wYW55SW5jLnBkZg==

(a) Compute ROE and a three-factor ROE decomposition for the Company for the years ended 2014 and 2013. For simplicity, use year-end balances in your ratio computations

Ratio 2014 2013
ROE
Profit Margin
Asset Turnover
Financial Leverage

(b) Has the Companys ROE increased or decreased in 2014? Which component(s) of the ROE decomposition support or contribute to that directional change in the Companys ROE

(c) Select ONE of the three components of the ROE decomposition and explain what most likely lead to the observed change in that component. (HINT: Explanations for two of the three components are more readily identifiable from the financial statements. You only need to identify ONE of those

Part II:

2. Are the Companys quarterly financial statements audited by independent CPAs? How do you know?

3. What periods are being reported on the Companys interim income statements? Refer to specific months and years.

4. (a) What level of growth does the Company expect for its Net Sales for the fiscal year 2015? (HINT: Refer to the details of press release, and think carefully about how the Company is describing its sales!)

(b) Would the management guidance for fiscal year 2015s net sales be likely interpreted by investors as an improvement or a deterioration in the Companys performance, relative to 2014?

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