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QUESTION 2 Not complete Points out of 1.00 Flag question Question text Formulating Financial Statements from Raw Data Following is selected financial information from General
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Formulating Financial Statements from Raw Data Following is selected financial information from General Mills, Inc., for its fiscal year ended May 29, 2016 ($ millions):
*Cash from financing activites includes the effects of foreign exhange rate fluctuations. | |||
Revenue | $16,563.1 | Cost of goods sold | $10,733.6 |
Cash from operating activities | 2,629.8 | Cash, ending year | 763.7 |
Cash, beginning year | 334.2 | Total liabilities | 16,405.2 |
Stockholders' equity | 5,307.1 | Cash from investing activities | 93.4 |
Noncash assets | 20,948.6 | Total expenses (other than cost of goods sold) | 4,092.7 |
Cash from financing activities* | (2,293.7) |
(a) Prepare the income statement, the balance sheet, and the statement of cash flows for General Mills for the fiscal year ended May 29, 2016. Hint: Enter negative numbers only for answers in the statement of cash flows (if applicable).
General Mills, Inc. Income Statement ($ millions) For Year Ended May 29, 2016 | |
---|---|
Revenue | $Answer |
AnswerCash, ending yearTotal expensesCost of goods soldNoncash assets | Answer |
Gross profit | Answer |
AnswerCash, ending yearTotal expensesCost of goods soldNoncash assets | Answer |
Net income | $Answer |
General Mills, Inc. Balance Sheet ($ millions) May 29, 2016 | |||
---|---|---|---|
Cash | $Answer | Total liabilities | $Answer |
AnswerCash, beginning yearNoncash assetsStockholders' equityNet income | Answer | AnswerCash, beginning yearNoncash assetsStockholders' equityNet income | Answer |
Total assets | $Answer | Total liabilities and equity | $Answer |
General Mills, Inc. Statement of Cash Flows ($ millions) For Year Ended May 29, 2016 | |
---|---|
Cash from operating activities | $Answer |
AnswerNoncash assetsNet incomeCash, beginning yearCash from investing activities | Answer |
Cash from financing activities | Answer |
Net change in cash | Answer |
AnswerNoncash assetsNet incomeCash, beginning yearCash from investing activities | Answer |
Cash, ending year | $Answer |
(b) Does the negative amount for cash from financing activities concern us? Explain.
A negative amount for cash from financing activities implies that the company is unable to pay its debts as they come due and should be interpreted negatively.
A negative amount for cash from financing activities is the result of additional borrowings. Because the additional funds are invested in earnings-generating assets, this should be viewed positively.
A negative amount for cash from financing activities implies that the market value of the company's long-term debt has declined and this change should be viewed negatively.
A negative amount for cash from financing activities reflects the reduction of long-term debt, which is a positive sign of the companys ability to retire debt obligations.
(c) Using the statements prepared for part a. compute the following ratios (for this part only, use the year-end balance instead of the average for assets and stockholders' equity):
Round all answers to two decimal places (example for percentage answers: 0.12345 = 12.35%).
(i) Profit margin Answer
% (ii) Asset turnover Answer (iii) Return on assets Answer% (iv) Return on equity Answer%
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