General Mills Case Study

a. What is the nature of General Mills’ business? That is, based on what you know about the company and on the accompanying financial statements, how does General Mills make money?

General Mills is a distributor of a variety of food products throughout America. General Mills specializes in foods such as baking goods, ready to eat cereals, meals frozen dough products, organic foods, snack foods, and yogurts. The company also has an international segment that participates in business in regions like Canada, Europe, Latin America, and Asia/ Pacific. General Mills bakeries and foodservice sell to retail and wholesale bakeries and convenience stores. These types of industries are typically very competitive. Due to the competitive nature, low switching costs, and very narrow margins, General Mills relies on aggressive marketing tactics and new product development to stay on the forefront of business and generate profits.

b. What Financial statements are commonly prepared for external reporting purposes? What titles does General Mills give these statements? What does “consolidated” mean?

Financial statements that are commonly prepared for external reporting purposes is the income statement, the balance sheet, the statement of cash flows, and the statement of shareholder’s equity. General Mills prepares similar statements; their financial statements consist of, consolidated statement of earnings, the consolidated balance sheet, the consolidated statement of cash flows, the consolidated statements of stockholders’ equity and comprehensive income. “Consolidated” literally means “combine (a number of things) into a single more effective or coherent whole” This refers General Mills subsidiary companies. Anything consolidated means that all the companies owned/affiliated with General Mills are part of a consolidated (effective whole) group for which one set of financial reports are prepared.

c. How often do publicly traded corporations typically prepare financial...