Question

P1-42. Formulating Financial Statements from Raw Data Following is selected financial information from General Mills Inc. for its fiscal year ended May 29, 2016 ($ millions). Revenue.......................... $16,563.1 Cash from operating activities .... 2,629.8 Cash, beginning year............. 334.2 Stockholders' equity ............. 5,3071 Noncash assets................... 20,948.6 Cash from financing activities*.... (2,293.7) Cost of goods sold ................... $10,733.6 Cash, ending year .................... 763.7 Total liabilities. ....................... 16,405.2 Cash from investing activities......... 93.4 Total expenses (other than cost of goods sold). ...................... 4,092.7 * Cash from financing activities includes the effects of foreign exchange rate fluctuations. Required a. Prepare the income statement, the balance sheet, and the statement of cash flows for General Mills for the fiscal year ended May 29, 2016. b. Does the negative amount for cash from financing activities concern us? Explain. c. Using the statements prepared for part a, compute the following ratios (for this part only, use the year-end balance instead of the average for assets and stockholders' equity): i. Profit margin ii. Asset turnover iii. Return on assets iv. Return on equity

Answer 1

| Non cash Assets $29948.6 Answer 271) General Hills. Inc. Income statement for the year ended 29 May 2016 particulars Amount in $16.563.1 Revenue Lesse cost of goods Sold $10733.6 $101 1. Gross profit $5.829.5 Less! Tolal Expensed $4,092.7 Net Income $1,736.8 2-0) General Hills inc. Balance sheela as on 29 May 2016. Liabilities Amorint in Assets Amennyiben Total Liabilities $763.7 $16.405.2 cash stock holders equily $5307/ $217/2.3 Tolal Liabilities and Total Assets $21,712.3 egtuig a-3) General mills inc. statement of cash flows for the year ended 29 May 2016 parhulary Cash from opening activities $2,629.8 cash from Investing activities $93.4 Cash from financing activities ($2,893.7) Net change in cash $429.5 Add: cash beginning year *334.2 Cash ending year $ 763.7 b) A negative amount for cash from financing activilies reflects the reduction of long-Term debt, which is a positive sign of the company's ability to retain debt Obligation. Ç) caleulation of Ratios profit margin = Net income total revenue = $1736.8/116563./ • profit margin = 10.49% iė) Asset Turn over = Total revenue/ Total Assets = $16,563.1/421719.3 .. Asset Termovey = 0.76 Times ii) Return on Assels = net income! Total Assels = $1736.8/421,712.3 :: Relæn on Assets 98% Tv) Return on equity = Net income /stock holders equity .817368/$53071 : Return on equity = 32.73% I