Autor: itsariff 06 May 2011
Words: 1259 | Pages: 6
Consumers around the world are enjoying Kellogg products, one of which Kellogg's Corn Flakes has been part of a healthy, delicious morning for over a century. The company began with only 44 employees in Battle Creek, Michigan, in 1906.
The Company's principal products are ready to eat cereals and convenience foods, such as cookies, crackers, toaster pastries, cereal bars, fruit flavored snacks, frozen waffles and veggie foods. As of February 25, 2011, these products were, manufactured by the Company in 18 countries and marketed in more than 180 countries. The Company also markets cookies, crackers, and other convenience foods, under brands, such as Kellogg's, Keebler, Cheez-It, Murray, Austin and Famous Amos, to supermarkets in the United States. Kellogg's has some strengths and weaknesses. What I believe are some of Kellogg's strengths is their Strong Focus on Innovation, Strong Brand Portfolio, Geographical Diversification, Efficient Use of Resources, and their Strong Growth Prospects. What I feel is some of Kellogg's weaknesses are some of the Product Recalls, its Narrow Customer Base, Declining Market Share in Sector, and their Limited Liquidity Position.
I also believe that their values which they call the special K Values are a strength they have. It helps shape their culture and guides the way they run their business. At Kellogg Company, they act with integrity and show respect. They demonstrate a commitment to integrity and ethics, By Showing respect and value to all individuals for their diverse backgrounds, experience, styles, approaches and ideas. Kellogg's Accepts personal accountability for their actions and results. They focus on finding solutions and achieving results, rather than making excuses or placing blame. They Keep promises and commitments made to others, Show pride in brands and heritage. They also have the humility and hunger to Display openness and curiosity to learn from anyone, anywhere.
The company Solicits and provide honest feedback without regard to position. Kellogg's strives for simplicity they Stop processes, procedures, and activities that slow production down or do not add value. One of the more important strengths that they hold is the ability to Work across organizational boundary levels and breaks down internal barriers to Deal with people and issues directly and avoid hidden agendas.
An examination of Kellogg's Company past and present reveal a model of corporate success. Even though now it seems that Kellogg's competitor general mills has the upper hand based on the past data giving I believe that Kellogg's will continue to do well it might not be as good of numbers as General Mills but will keep growing.
General Mills, Inc. (General Mills) is a global manufacturer and marketer of consumer foods sold through retail stores. The Company is also a supplier of food products to the food service and commercial baking industries. The company was founded in 1928 and is based in Minneapolis, Minnesota.
General Mills manufactures its products in 15 countries and markets them in more than 100 countries. The Company's joint ventures manufacture and market products in more than 130 countries and republics worldwide. The Company's businesses are organized into three operating segments U.S. Retail, International, and Bakeries and Foodservice. The Company sells ready to eat cereals, shelf stable and frozen vegetables, dry dinners, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza snacks, grains, fruits, and savory snacks, as well as ice creams and frozen desserts, and organic products through its Cereal Partners Worldwide joint venture.
The Company's primary customers include grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, commercial and noncommercial foodservice distributors and operators, restaurants and convenience stores. General mills also have some strength and weaknesses. What I feel is some of general mills strengths are its Efficient Use of Resources, its Multiple Brands with Strong Potential, the company's Steady Revenue Growth, and its Product Innovations. What I believe is some of general mills weaknesses is the Declining Market Share in its Sector, it has a Narrow Customer Base, and is Limited in their Geographical presence.
A unique aspect of this General Mills Company that I found to be useful as well as helpful to others is the box top reward offers on the top of almost every General Mills product. Box tops may mean little to some people, but to teachers, schools, parents and students, they have become an excellent means of raising money. In 1996, the company General Mills launched the Box Tops for Education program.
With this basic program, families clipped the box tops off of cereal boxes, just a few types initially, and collected them for schools. Schools would then send in the tops or the little logo from the tops, and earn a small amount of money for each top. Usually this amount was only about a tenth of a dollar, but schools that were hurting for money could still make a little bit without parents having to spend anything more than they normally would.
2009 QUICK RATIO 2010
KELLOGS .45 .72
GENERAL MILLS .61 .57
KELLOGGS .71 1.12
GENERAL MILLS .98 .92
2009 TOTAL DEBT TO EQUITY 2010
KELLOGGS 6.56 3.93
GENERAL MILLS 2.45 2.27
TIME INTREST EARNED
KELLOGGS 6.30 6.71
GENERAL MILLS 5.23 5.20
2009 INVENTORY RATIO 2010
KELLOGGS 8.31 7.89
GENERAL MILLS 7.02 6.64
KELLOGGS 11.66 11.51
GENERAL MILLS 15.16 13.65
2009 PROFIT MARGIN 2010
KELLOGGS 1.09 .10
GENERAL MILLS .09 .10
RETURN ON ASSETS
KELLOGGS 1.17 1.12
GENERAL MILLS .82 .84
The quick ratio is to simply calculate the liquidity. The case of both Kellogg and General Mills is similar. The current ratio calculates short term liquidity for all assets Kellogg has .92 in current assets while General Mills has $1.07 in current assets. Total debt ratio is the formula where all debts of all maturities to all creditors are taken into account. General Mills has more debt than Kellogg which is shown above where it is seen that the total number is higher. Long-term solvency can be defined as total interest earned ratio measures, Kellogg interest is 5.3 times over. Inventory ratio measures the inventory turnover, which is how fast a company can acquire a product and sell it. By analyzing the chart we can see General Mills has a better turnover of inventory because its inventory ratio number is larger. The receivable ratio shows how fast the company is able to sale a product. General Mills receivable ratio is 3.06 which is larger than Kellogg's 2.4. Profit margin indicates the total made in sales. Kellogg is not doing as well as General Mills. The return on assets is a measure of profit per dollar of assets.
III Market Value
The current price-earnings ratio for Kellogg's is 17.4%. Kellogg Company is a valuable asset to its investors. It is a brand that in known internationally and has a strong belief in health and wellness. The current price-earnings ratio for General Mills is 15.3%. it is also seen as a good investment, however it is not as high as Kellogg. However General Mills has been called a "moderate-risk" stock in comparison to Kellogg. General mills has the stability to remain afloat in the stock market however, Kellogg has the potential to generate a high revenue, or great price plummet.
IV DuPont Analysis
The Du Pont analysis shows how ROE is affected by the operating efficiency, which is measured by profit margin, asset use efficiency, measured by total asset turnover, and financial leverage measured by the equity multiplier. Kellogg' Du Point identity is 7.7% and General Mills is 10.7%. General Mills, despite other ratios, is doing better according to this analysis.
V CEO Performance
Out of the 12 billion Kellogg grossed last year, their CEO took home 2.34 million and General Mills CEO is paid 2.9 million. With the high amount of revenue both companies brought in, I believe they earned their pay and was compensated accordingly. However, I fell that the CEO of Kellogg should have been paid more due to the high liquidity ratio and their profit margin.