General Mills Case Study

In: Business and Management

Submitted By jberkey
Words 2946
Pages 12
General Mills Inc.—Understanding Financial Statements
Teaching Notes: This is the first case we use in our course and it sets the tone. We find that using a company well-known to students piques their interest and gets the course off to a good start. The purpose of the case is to gain familiarity with financial statements and to begin to think about how financial statements reflect economic events and financial performance. Some students need to be reminded that the point of the exercise is not to perform a comprehensive analysis of the company. At this point, most students do not have the required skills. Rather, the goal is one of discovery. Many students find that they understand a lot more of the information in the financials than they thought they would. Others find that the vocabulary bogs them down. They need to be encouraged to learn the language of business. A productive exercise is to have students jot down a few (3-5) items they find puzzling in the financial statements. Then, on the last day of class, have the students refer back to their list. Typically, they understand everything they had on their day-one list. This provides tangible evidence of the value of the course because most students are pleasantly surprised at how much they have learned. The case probes the three basic statements as well as the two opinions issued by the firms’ auditors. This provides the opportunity to introduce the notions of corporate governance and ethics. The case includes basic questions to encourage students to dig into each financial statement for a look at the information they contain. The case also requires students to produce common-size income statements and balance sheets as a first stage of financial statement analysis of the statements. For many students, the most eye-opening part of the case is the last part where they are asked to identify as many of the…...

Similar Documents

General Management Case Study

...GM591F Leadership and Organizational Behavior Case Study   Group development Christine’s group is now facing the storming stage of team development. This is the point when there are high emotions and tension between the members of the team. During this stage there may be conflict, arguments, hostility and possibly fighting. Separate cliques may form within the group and each group may begin to compete against one another. During the stage of storming communication may be cut off and assumptions are made. Social loafing may occur as a result of the storming phase. The separation between teams may cause certain members to withdraw from the group because they may not have the personality to handle conflict. This is an issue because that team member will stay away from meetings in fear of having to confront or be confronted by the issues present. Another reason for the storming phase is due to the personalities of each member surfacing. If Christine was familiar with the storming stage of team development she may have recognized the red flags leading up to this phase. The text describes recognition of the storming pressures that should result in establishing goals and expectations. Once Christine recognized the storming was beginning, she should have taken the initiative as a leader to redirect the focus from the negative to working towards confronting the obstacles that were going to change the focus of the original task at hand. Problem Identification The primary......

Words: 865 - Pages: 4

General Management Case Study

...Case – 1 ALEXANDER GAVIN’S DILEMMA: CULTURAL RELATIVISM AND BUSINESS AS USUAL April 10, 1983 Dear Professor Hennessey: I have not talked with you since my participation in The Executive Program at Tuck School in the summer of 1978. Many times I’ve hoped I might come back to visit but my life has been one surprise after the other, and I have been too busy to take any vacations in recent years. I want to tell you about a situation that happened to me recently. I know you will be interested in it, and if you have time I’d like you to tell me what you would have done had you been in my position. As I think you know, I am Senior Project Manager for the El Sahd Construction Company in Kuwait. The company is a prosperous one, with an excellent reputation for producing in a timely and cost-effective way on major construction projects in the Middle East. The Chairman and Chief Executive Officer is a wellknown Kuwaiti and my direct boss is another American expatriate who is Senior Vice President for urban construction projects. Two months ago, we put in a bid to be the principal subcontractor on a project in Iran. Our bid was $30 million, and we expected to bargain with Ajax, Ltd., the British-based company asking for the bids. We had built a heavy profit into the $30 million. I was asked to go to Tehran on March 3rd to talk with the Ajax manager of the major project. That manager told me that we were going to get the job. I was delighted. The job meant a lot to us. We......

Words: 557 - Pages: 3

General Mills

...General Mills case study Concepts A) General Mills is a global food company. The main products of the company are baking products, frozen products, ready-to-eat cereals, snacks, etc. The company sells its products to supermarkets, groceries, and wholesalers. The company makes money by introducing new products in the market. B) The financial statements that are commonly prepared for external reporting purposes are balance sheet, statement of cash flow, statement of shareholder’s equity and income statement. The title General Mills give these statements are General Mills inc and Subsidiaries consolidated statement of earnings i.e. Income statement and consolidated balance sheets, consolidated statement of cash flows, and consolidated shareholder’s equity. Consolidated means combined financial statements of a parent company and its subsidiaries. Company’s financial statements give an aggregate view at the financial position of a company. Parent company and its subsidiaries help to determine position of an entire group as opposed to one company’s standalone position. C) In US, publicly traded companies must file financial statements with the SEC – Securities Exchange Commission. The 2 main compulsory filings are:- Form 10K – the audited annual report that includes the four financial statements with explanation and analysis of financial results. Form 10Q – the unaudited quarterly report that includes summary version of the 4 financial statements and disclosures.......

Words: 1047 - Pages: 5

General Mills

...General Mills’ Acquisition of Pillsbury from Diageo PLC Lauren Sherlock Jason Park JP Zendman 12/9/2009 General Mills’ Acquisition of Pillsbury from Diageo PLC Situation Analysis: In December 2000, management at General Mills (GM) proposed a plan to acquire Pillsbury, a bakedgoods producer, in a stock-for-stock exchange. Pillsbury is currently controlled by Diageo PLC, one of the world’s leading consumer–goods companies. The deal specifies that General Mills is to create and thus issue additional shares of common stock to Diageo in exchange for complete ownership of the Pillsbury subsidiary. If the deal is executed, Diageo will become General Mills’ largest shareholder. The consideration to Diageo would include 141 million shares of the company's common stock and the assumption of $5.142 billion of Pillsbury debt, making the deal worth over $10 billion. In addition, the agreement will contain a contingency, as up to $642 million of the total transaction value may be repaid to General Mills at the first anniversary of the closing, depending on its (20-day) average stock price at that time. Therefore, we must calculate and thus analyze the various costs and savings associated with the transaction to determine whether or not General Mills’ shareholders should vote for the proposed merger. If approved, this will be the biggest takeover in GM’s 136 years of business and General Mills will become the fifth largest food company in the world (Forster, 2002). General Mills......

Words: 7223 - Pages: 29

General Mills Case

...Case: General Mills a) General Mills is an American food manufacturer that does business in the US, Europe, Latin America and Asia. Its primary line of business ready-to-eat food products both for retail and wholesale purposes. b) Common financial statements include the balance sheet, income statement, the statement of cash flows, and the statement of shareholders equity. General Mills renames them as consolidated balance sheet, consolidated income statement, consolidated statement of cash flows, and the consolidated statement of shareholders equity. Since General Mills has subsidiaries or separate lines of businesses, it integrates their financial performance it one set of financials, thus the term “consolidated”. c) According to the SEC, publicly traded companies must file statements such as the 10Q every quarter and that an annual report (or 10K) be filed as well. d) While the auditors (KPMG LLP) prepare the financial statements, they use the data provided by management. According to the Sarbanes-Oxley Act, the CEO and CFO must sign off and verify that the information provided is as accurate as can be and they be held accountable for discrepancies. Users include internal people that would be interested in seeing how the company is actually performing whether it be the managers or employees. External users could be creditors and suppliers that evaluate lending and General Mills’ financial strength. e) KPMG LLP is General Mills’......

Words: 753 - Pages: 4

General Mills Case Study

...General Mills Inc.—Understanding Financial Statements Teaching Notes: This is the first case we use in our course and it sets the tone. We find that using a company well-known to students piques their interest and gets the course off to a good start. The purpose of the case is to gain familiarity with financial statements and to begin to think about how financial statements reflect economic events and financial performance. Some students need to be reminded that the point of the exercise is not to perform a comprehensive analysis of the company. At this point, most students do not have the required skills. Rather, the goal is one of discovery. Many students find that they understand a lot more of the information in the financials than they thought they would. Others find that the vocabulary bogs them down. They need to be encouraged to learn the language of business. A productive exercise is to have students jot down a few (3-5) items they find puzzling in the financial statements. Then, on the last day of class, have the students refer back to their list. Typically, they understand everything they had on their day-one list. This provides tangible evidence of the value of the course because most students are pleasantly surprised at how much they have learned. The case probes the three basic statements as well as the two opinions issued by the firms’ auditors. This provides the opportunity to introduce the notions of corporate governance and ethics. The case includes basic......

Words: 2946 - Pages: 12

Economic Case Study on Spinning Mills

...AN ECONOMIC CASE STUDY ON SPINNING MILLS OF BANGLADESH: AN ASSESSMENT ON MALEK SPINNING MILLS LIMITED Prepared By- Md. Golam ShahriarMajumder (23029) PREFACE This report has been prepared to provide a picture of a standard spinning mill of Bangladesh by the form of Malek Spinning Mills Ltd. The main objectives are to highlight different methods such as ‘Demand and Supply Analysis’, ‘Optimal Decision Analysis’, ‘Estimation Techniques’, ‘Consumer Behavior’, ‘Elasticity’ etc. to evaluate how economically balanced the company is. The intent of this document is to encourage the up gradation the standard of the spinning mills in our country and get a strong grip over the economic stability. To meet this objective, this report looks in depth towards decision making by using different tools and techniques of economics. Because it is important to look beyond just one measure in order to see a complete picture of the economic benefits and costs analysis of different activities are presented in the case studies. Objectives The main objectives of our report are: * Analyzing the accounting profit and economic profit of Malek Spinning Mills Ltd. (MSML). * Market demand and supply of MSML products * Calculation of total benefit, total cost and net benefit. * To find the optimum level of activity. * Substitutes of MSML products and their effects. * Price elasticity of demand. Methodology This......

Words: 1297 - Pages: 6

Malia Mill Case Study

...1. Malia Mill’s has a product line that appeals all women. No matter what size or shape you are, Malia Mill has something for ever women. This company uses real women to model and advertise there product, instead of hiring professional models. 2. Malia Mill’s customers are willing to pay a high price for swimwear because they are buying quality in the product. Their swimwear is also manufactured in New York City and this shows that Malia Mill is supporting employment within the community. The company give great customer service, for example, they give their customers bottled water during meeting with their clients when assisting in finding a swimsuit. 3. In order to be cost effective, I would suggest that the company stay out of wholesale and focus on the one on one attention they give their customers. By continuing this method, the company will continue to gain customers and increase their loyal customers. The company has a competitive advantage over other competitors because they give their customer the attention they need in order to find the perfect swimsuit, unlike looking for one at a department store. Malia Mill should consider getting more involved with social media and sharing their customer’s testimonials. 4. The environment Malia Mill is trying to create in her stores is, a store where women can be comfortable trying and buying swimwear. The companies mission and vision for the brand is to create a place where women can come in and shop for swimwear......

Words: 340 - Pages: 2

Case Study: Dollar General

...Case Study: Dollar General 1. Dollar General is a discount retailer that have proven to be a strong competitor because it offers a small selection of products at lowers prices. This allows customers from different economic backgrounds to afford their products and be a one-stop shop where individuals can pick an item and head to the register- it is convenient for small items. With its limited items and $1.00 pricing strategies, they create a high level of sales while remaining a competitor to industries such as Walmart. Other retailers are stocked heavily with a variety of different products, but the Dollar General has a select stock, usually composing of items such as party supplies. 2. The Dollar General used its own name to differentiate itself, everything being a dollar. This makes consumers aware of their stores because people like low priced convenience items. People want to save money and even when individuals incomes are over $50,000 they are still price conscious. These stores are aimed at individuals who need quick, in and out items at a low rate. They generally target consumers who have lower incomes, but are becoming more common in suburban areas. In my hometown suburban area, we do have a Dollar General so it shows they are targeting different, smaller locations to have stores in. This company selects a variety of convenient but quality brand name items, which differentiates them even more. They want consumers to change their shopping habits and go to stores......

Words: 576 - Pages: 3

General Motors Case Study

...General Motors Case Study Paper The main problem that General Motors was facing was declining market shares and a changing industry, General Motors (GM) launched an ambitious effort that transformed its supply chain and made customer satisfaction a priority (Cohen & Roussel, 2005). In the late 1990s, the Internet seemed poised to transform the automobile industry. Consumers armed with information could quickly compare prices, options, quality, and service—and make more informed choices. General Motors observed these changes warily. By the late 1990s the need for change was becoming clear. Consumers were more savvy, powerful, and demanding. Yet GM's responsiveness lagged the industry (Cohen & Roussel, 2005). Dealers grew increasingly frustrated by the mix of inventory foisted on them. Even in key markets, dealer lots were clogged with over 100 days of supply. To clear out slow-moving products, GM had to offer sales incentives, which squeezed profit margins (Cohen & Roussel, 2005) Dealers couldn't get the vehicles they wanted—the vehicles their customers wanted. Desirable options such as aluminum wheels, leather interiors, and V8 engines often were not available in adequate quantities. Unavailable options, or constraints, were high at GM dealerships relative to the industry as whole, averaging tens of thousands of orders affected at any given time over the range of GM products (Cohen & Roussel, 2005). Patrons who chose to special-order a......

Words: 1401 - Pages: 6

Malia Mills Case Study

...features of Malia Mills’ product. The unique feature of Malia Mill’s product is that they come in all different sizes. The offer swimsuits that come in all different styles to appeal to women of all sizes, shapes and age. The quality of the products is also very high and the materials that they use are also of quality. The unique quality is to “change the way women felt about themselves” 2. Malia Mills Swimwear is not inexpensive. Why do you think customers are willing to pay a premium for her suits? I think that the customers are willing to pay premium for her suits because they are of great quality. The business stands true to their brand, and not many companies are able to follow that. The business is looking for what’s best for their customers, and their customers see that. They also offer styles that people are extremely satisfied with, and that cater to the different body types that people of all ages have. 3. The case mentions that Malia Mills Swimwear is currently experimenting with paid advertising. If you were in charge of marketing for the company, how would you assess whether or not it was cost effective to continue purchasing advertising? I think the best way to test out if paid advertising is working or not is through trial and error. Although this seems like a risky way of trying it out, the best way to see customer response is through trial and error. If the paid advertising isn’t working, this may not be a route that Malia Mills should......

Words: 807 - Pages: 4

Case Study on General Motors

...Organization and Management – Assignment 1 I. Information General Motors (GM) was one of the market leaders in automobile production prior to the 1980s and 1990s. Under the supervision of Alfred P. Sloan Jr., GM developed 5 independent divisions that marketed their own line of cars. These divisions – Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac – catered to different economic price ranges. This organizational design led to GM being the world’s largest manufacturing organization during the post-World War II era. However, during the 1980s, GM experienced its first loss since 1921. The newly appointed CEO Roger Smith began redesigning GM’s organizational structure to push decision making down to the operational level instead of the management level. He created two different groups, the BOC – composed of the Buick, Oldsmobile and Cadillac divisions, and the CPC – from the Chevrolet, Pontiac and GM of Canada. Each group had complete authority to organize whichever way they wanted and to do what was necessary to bring GM back into a good economic status. The BOC group organized four independent strategic business units, which was reminiscent of the previous organizational structure of GM. The CPC group on the other hand, moved towards the traditional centralized organizational structure. Upon the appointment of Jack Smith as CEO of GM in 1993, he carried out what would seem as harsh measures for GM. He eliminated a lot of staff by combining......

Words: 1113 - Pages: 5

General Miller Case Study

...2011 and 2010 (75.5 million) while the treasury stock increased from 2615.2 to 3210.3 million, which means the Company didn’t issue any “authorized but previously unissued shares” this year but satisfied the exercise of employee stock options by using the treasury stock they bought in fiscal year 2011. 2. Based on the assumptions used for the Black-Scholes option-pricing model as disclosed in the notes to the financial statements, as well as the market price of the stock on the last day of fiscal years 2011 and 2010, determine whether the change in value of each assumption (and stock price) between 2010 and 2011 positively or negatively impacts the estimated fair value of the options granted during 2011. (page 33) As disclosed in General Mills’ 10-K, the market price of the stock on the last day of fiscal years 2011 and 2010 are $37.38 and $27.99, respectively, while the estimated fair value of stock options in 2011 and 2010 are $4.12 and $3.20, respectively. The increased market price can be a strong supporter to the increased estimated fair value. Then the change in value of each assumption in Black-Scholes option-pricing model can affect the estimated fair value in different direction: 1) Risk-free interest rate decreased from 3.7% to 2.9%, which negatively affect the estimated fair value of the stock options 2) Expected term remains the same in 2011 and 2010. It didn’t impact the estimated fair value. 3) Expected volatility decreased from 18.9% to 18.5%. As we......

Words: 991 - Pages: 4

General Motors Case Study

...Case 34 General Motors What are key forces in the general and industry environments that affect the U.S. auto industry, and General Motors? General Motors (GM) has suffered different threats and difficulties that have put in risk the continuity of its production. Before the year 2000, GM has been going through different production, financial, and development problems. Wagoner has tried in different ways to address each problem in order to make GM more successful. Unfortunately GM had high losses that have made it very difficult to solve those problems. All this is due to a very competitive environment in each there were different forces that affect the development of the firm. According to Porter’s Five-Forces Model of the Industry, there are five aspects to analyze, the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and services, and the intensity of rivalry among competitors in an industry. First, the threat of new entrants highly affected the firm. GM has so many divisions and units which made the firm weak in its integration. GM had 27 different units within the firm that purchase parts that made it difficult to achieve economies of scale. All those units worked independently and do not contribute each other. In other to solve that, Wagoner started working to integrate each unit, especially overseas. Also, he took the decision to reduce the number of units and divisions......

Words: 2202 - Pages: 9

General Motors Case Study

...General Motors Case Study #3 Problem Summary: One of the most serious problems that GM faces is when the firm announced a $10.6 billion loss, which was their first in 12 years. The auditors for General Motors even thought that the firm’s survival was in substantial doubt even if they received the additional $30 billion they were going to borrow from the federal government. The problems have grown as a result of mistakes by GM’s management over the last 30 years. They built up a bloated bureaucracy that supplied boring, low-quality cars for many years. GM will also lose leadership of the United States market, having already been replaced by Toyota as the world’s largest automaker. GM has been burdened with a high cost structure result of contracts that they signed in order to end a prolonged strike by the United Automobile Workers. They faced the biggest challenge in dealing with health and retirement benefits that GM had. The huge costs made it difficult to cut back on the productions of GM, even if that meant they had to rely on incentives to get the cars of the lots. They were also struggling with the sales of their lineups of passenger cars. Some people think that GM will not be able to move fast enough on their reorganization in order to become competitive again, and that they will fail in the meantime. Analysis: GM faces millions of dollars in losses; due to the government loans they were receiving in order to hopefully accomplish some restructuring play. ...

Words: 751 - Pages: 4