Solvency Ratios

Solvency Ratios

General Mills Inc.

The Kraft Heinz Co.

Recent Year

Prior Year

Recent Year

Prior Year

Debt-to-asset ratio

0.67

0.71

0.496

0.489

Cash Debt Coverage Ratio

0.137

0.169

0.099

0.071

Times Interest Earned

Operating profit et interest expense 3144.8/430.9

=7.29 ?

2953.9/475.1

=6.21 ?

2128/1394

=1.52 ?

3070/1361

=2.25?

1. Does the financing mix of the company appear appropriate given the industry and business strategy? What is their dividend policy?

2. Is the company having trouble servicing their debt load? Is there capacity to start new projects given the current level of external financing?

3. Does the company have a high level of non-operating assets such as excess cash or investments in marketable securities? If so, discuss the business purpose of these assets.

Solvency Ratios Solvency Ratios The Kraft Heinz Co. General Mills Inc. Recent Year Prior Year Recent Year Prior Year 0.71 0.496 0.489 0.169 0.099 0.071 Debt-to-asset 0.67 ratio Cash Debt 0.137 Coverage Ratio Times Interest Operating profit net Earned interest expense 3144.8/430.9 =7.29 ? 2953.9/475.1 =6.21 ? 2128/1394 =1.52? 3070/1361 =2.2571 1. Does the financing mix of the company appear appropriate given the industry and business strategy? What is their dividend policy? 2. Is the company having trouble servicing their debt load? Is there capacity to start new projects given the current level of external financing? 3. Does the company have a high level of non-operating assets such as excess cash or investments in marketable securities? If so, discuss the business purpose of these assets