Kellogg Business Valuation

INTRODUCTION

Kellogg Company (Kellogg) is principally engaged in the manufacture and marketing of ready to eat cereals and convenience foods. Its product portfolio includes cookies, crackers, toaster pastries, cereal bars, fruit snacks, frozen waffles, and veggie foods. The company offers its products under various brands such as Kellogg’s, Keebler, Pop-Tarts, Eggo, Cheese-It, Nutri-Grain, Rice Kris pies, Morningstar Farms, Famous Amos, Special K, Stretch Island, All-Bran, Frosted Mini-Wheat’s, Club and Kashi. The company operates principally in the US and the UK markets. The company’s products are manufactured in 19 countries and marketed in more than 180 countries across the world.

Our analysis is a strategic examination of Kellogg Company USA, which will provide insight into its financial strength, growth potentials and competitors. This report provides and presents the company’s financial ratios for the past 5 years, as well as the measurement of its value of operations through the application of the basic concepts of the Capital Asset Pricing Model (CAPM), the Weighted Average Cost Capital (WACC), and other financial evaluation techniques.

KELLOGG’S EXECUTIVE SUMMARY

With 2009 sales of nearly $13 billion, Kellogg Company is the world's leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, fruit snacks, frozen waffles, and veggie foods. Kellogg products are manufactured in 17 countries and marketed in more than 180 countries around the world.

Kellogg Company's business is broadly divided into two divisions: Kellogg North America and Kellogg International. Kellogg North America includes retail cereal, retail snacks, and frozen and specialty channels businesses in both the United States and Canada. The company’s business operation is divided into businesses in Europe, Latin America, Asia, and Australia.

The North American Retail Cereal business includes many of the Company's...