Generalmills Case

a) General Mills’ produces and sales packaged consumer foods. The company’s businesses are branched into three dimensions; retail sale of ready-to-eat products in US, international retail sales business in Canada, Europe, Latin America and Asia/Pacific Region and business with retail and wholesale bakeries. Moreover, according to accompanying financial statements, the company earns money through producing and selling its own products, since there is only “Net Sales” account in the I/S of company (no indication of revenue of Service). Also, the company holds Inventory as an asset in its B/S which indicates that company earns from selling goods, not services.

b) Generally, annual reports include Income Statement, Balance Sheet, Statement of Stockholders’ Equity and The Cash Flow Statement of a company, and similarly, General Mills’ Inc. prepares these statements under the names of “Consolidated Statements of Earnings”, “Consolidated Balance Sheet” and “Consolidated Statements of Cash Flow”. Consolidated statement means the financial record of two or more separate legal entities have been combined into the statements presented. As in this case, if one company has control over another, meaning that a parent-subsidiary relationship exists, then the parent company must prepare consolidated financial statements which include the financial records of all businesses.

c) The companies with stock that is publicly traded in the US must file 10-Ks annually with the Securities and Exchange Commission (SEC). The 10-K contains the company’s financial statements.

d) It is management of the company who is responsible for the preparation of the financial statements. Owners and managers of the company can use statements to make important business decisions. Auditors also use them to report their opinion on their preparation. Investors can use them to evaluate the future of the related business. Financial institutions like banks may use these statements to decide whether lend the...