Kellogg Company is the worlds 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.

		2011		2010
Net sales		$13,198		$12,397
Net income		1,229		1,240
Total assets		11,901		11,847
Total liabilities		10,139		9,693
Common stock, $0.25 par value		105		105
Capital in excess of par value		522		495
Retained earnings		6,721		6,122
Treasury stock, at cost		3,130		2,650
Number of shares outstanding (in millions)		357		366

1.What are some of the reasons that management purchases its own stock?

2.Explain how earnings per share might be affected by treasury stock transactions

3.Discuss the implications of the change by calculating the ratio of debt of assets for 2010 and 2011.