EYK 14 Accounting Research Problem: General Mills, Inc. REQUIRED: Part a: Using the fiscal year end 2020 and 2019 annual reports for General Mills, Inc. calculate the following financial ratios for 2020 and 2019 using the EXCEL template provided. 1. Gross profit percentage 2. Return on sales 3. Asset turnover 4. Return on assets 5. Return on common stockholders' equity 6. Current ratio 7. Quick ratio 8. Operating-cash-flow-to-current-liabilities ratio 9. Accounts receivable turnover 10. Average collection period 11. Inventory turnover 12. Days' sales in inventory 13. Debt-to-equity ratio 14. Times-interest-earned ratio 15. Operating-cash-flow-to-capital-expenditures ratio 16. Earnings per share 17. Price-earnings ratio 18. Dividend yield 19. Dividend payout ratio Part 2: Answer the four analysis questions below regarding the Current Ratio, Accounts Receivable Turnover, Days Sales in Inventory and Debt to Equity Ratio What does the ratio tell a company? . . . What is the formula? Comparing 2020 to 2019 did the ratio indicate a positive change or negative change for the company?EYK 14 - General Mills Express For Year Ending For Year Ending Part a: Ratio As 2020 2019 Formula with values for Year Ending 2019 Gross profit percentage (first one is a feebie to use as an example) Percent 34.78% 34.13% (16865.2 - 11108.4) / 16865.2 2 Return on sales Percent 3 Asset turnover Number 1 Return on assets Percent 5 Return on common stockholders' equity Percent 6 Current ratio Number 7 Quick ratio Number Operating cash flow to current liabilities ratio Number 9 Accounts receivable turnover Number 10 Average collection period Number 11 Inventory turnover Number 12 Days' sales in inventory (use 365 days) Number 13 Debt to equity ratio Number 14 Times interest earned Number Operating cash flow to capital 15 expenditures ratio Number 16 Earnings per share Number 17 Price-earnings ratio Number 18 Dividend yield Percent 19 Dividend payout ratio PercentPart b: Analysis: Discuss the following four ratios to include: What does the ratio tell a company? What is the formula? Comparing 2020 to 2019 did the ratio indicate a positive change or negative change for the company? CURRENT RATIO: ACCOUNTS RECEIVABLE TURNOVER DAYS SALES IN INVENTORY DEBT TO EQUITY RATIOFiscal Year In Millions, Except Per Share Data, Percentages and Ratios 2020 (a) 2019 2018 2017 2016 Operating data: Net sales 8 17,6266 $ 16,8652 $ 15,7404 8 15,6198 8 16,5631 Gross margin (b) (d) 6,129.9 5,756.8 5,435.6 5,567.8 5,843.3 Selling, general, and administrative expenses (d) 3,151.6 2,935.8 2,850.1 2,888.8 3,141.4 Operating prot (d) 2,953.9 2,515.9 2,419.9 2,492.1 2,719.1 Net earnings attributable to General Mills 2,181.2 1,752.7 2,131.0 1,657.5 1,697.4 Advertising and media expense 691.8 601.6 575.9 623.8 754.4 Research and development expense 224.4 221.9 219.1 218.2 222.1 Average shares outstanding: Diluted 613.3 605.4 585.7 598.0 611.9 Earnings per share: Diluted $ 3.56 $ 2.90 $ 3.64 $ 2.77 $ 2.77 Adjusted diluted (b) (c) 8 3.61 $ 3.22 $ 3.11 $ 3.08 $ 2.92 Operating ratios: Gross margin as a percentage of net sales (d) 34.8% 34.1% 34.5% 35.6% 35.3% Selling, general, and administrative expenses as a percentage of net sales (d) 17.9% 17.4% 18.1% 18.5% 19.0% Operating prot as a percentage of net sales (d) 16.8% 14.9% 15.4% 16.0% 16.4% Adjusted operating prot as a percentage of net sales (b) (c) (d) 17.3% 16.9% 16.6% 17.6% 16.8% Effective income tax rate 18.5% 17.7% 2.7% 28.8% 31.4% Balance sheet data: Land, buildings, and equipment 8 3,580.6 $ 3,787.2 $ 4,047.2 $ 3,687.7 $ 3,743.6 Total assets 30,806.7 30,111.2 30,624.0 21,812.6 21 ,712.3 Long-term debt, excluding current portion 10,929.0 11,624.8 12,668.7 7,642.9 7,057.7 Total debt (b) 13,539.5 14,490.0 15,818.6 9,481.7 8,430.9 Cash ow data: Net cash provided by operating activities (e) S 3,676.2 $ 2,807.0 $ 2,841.0 $ 2,415.2 $ 2,764.2 Capital expenditures 460.8 537.6 622.7 684.4 729.3 Free cash ow (b) 3,215.4 2,269.4 2,218.3 1,730.8 2,034.9 Share data: Cash dividends per common share $ 1.96 $ 1.96 $ 1.96 $ 1.92 $ 1.78 (a) Fiscal 2020 was a 53-week year; all other scal years were 52 weeks. (b) See \"Glossary\" in Item 8 of this report for denition. May 26, 2019: In Millions, Except Per Share Data, Fiscal Year Percentages and Ratios 2019 (a) 2018 2017 2016 2015 (b) Operating data: Net sales $ 16,865.2 $ 15,740.4 $ 15,619.8 $ 16,563.1 $ 17,630.3 Gross margin (c) (d) 5,756.8 5,435.6 5,567.8 5,843.3 5,967.8 Selling, general, and administrative expenses (d) 2,935.8 2,850.1 2,888.8 3,141.4 3,389.9 Operating profit (d) 2,515.9 2,419.9 2,492.1 2,719.1 2,071.8 Net earnings attributable to General Mills 1,752.7 2,131.0 1,657.5 1,697.4 1,221.3 Advertising and media expense 601.6 575.9 623.8 754.4 823.1 Research and development expense 221.9 219.1 218.2 222.1 229.4 Average shares outstanding: Diluted 605.4 585.7 598.0 611.9 618.8 Earnings per share: Diluted 2.90 3.64 2.77 2.77 1.97 A GA Adjusted diluted (c) (e) 3.22 3.11 3.08 2.92 2.86 Operating ratios Gross margin as a percentage of net sales (d) 34.1% 34.5% 35.6% 35.3% 33.8% Selling, general, and administrative expenses as a percentage of net sales (d) 17.4% 18.1% 18.5% 19.0% 19.2% Operating profit as a percentage of net sales (d) 14.9% 15.4% 16.0% 16.4% 11.8% Adjusted operating profit as a percentage of net sales (c) (d) (e) 16.9% 16.6% 17.6% 16.8% 15.7% Effective income tax rate 17.7% 2.7% 28.8% 31.4% 33.3% Balance sheet data: Land, buildings, and equipment $ 3,787.2 4,047.2 $ 3,687.7 $ 3,743.6 $ 3,783.3 Total assets 30,111.2 30,624.0 21,812.6 21,712.3 21,832.0 Long-term debt, excluding current portion 11,624.8 12,668.7 7,642.9 7,057.7 7,575.3 Total debt (c) 14,490.0 15,818.6 9,481.7 8,430.9 9,191.5 Cash flow data: Net cash provided by operating activities (f) 2,807.0 $ 2,841.0 $ 2,415.2 $ 2,764.2 $ 2,648.5 Capital expenditures 537.6 622.7 684.4 729.3 712.4 Free cash flow (c) 2,269.4 2,218.3 1,730.8 2,034.9 1,936.1 Share data: Cash dividends per common share $ 1.96 $ 1.96 1.92 $ 1.78 $ 1.67 a) In fiscal 2018, we acquired Blue Buffalo. Please see Note 3 to the Consolidated Financial Statements in Item 8 of this report