General Mills Inc. (NYSE:GIS)

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.

How can I help you?

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

General Mills Inc., effective income tax rate (EITR) reconciliation

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
United States statutory income tax rate	21.00%	29.40%	35.00%	35.00%	35.00%	35.00%
State and local income taxes, net of federal tax benefits	2.50%	1.70%	0.80%	0.70%	0.70%	1.40%
Foreign rate differences	0.00%	-2.00%	-3.50%	-2.20%	-3.10%	-0.10%
Repatriation of foreign earnings	0.00%	0.00%	0.00%	0.00%	4.50%	0.00%
Non-deductible goodwill	0.00%	0.00%	0.00%	2.60%	0.00%	0.00%
Stock based compensation	-1.20%	-1.20%	0.00%	0.00%	0.00%	0.00%
Capital loss	-3.70%	0.00%	0.00%	0.00%	0.00%	0.00%
Prior period tax adjustment	0.00%	1.90%	0.00%	0.00%	0.00%	0.00%
Domestic manufacturing deduction	0.00%	-1.90%	-2.80%	-2.00%	-2.90%	-2.30%
Other, net	-0.50%	-0.70%	-0.70%	-2.70%	-0.90%	-0.70%
Effective income tax rate, before provisional net tax benefit	18.10%	27.20%	28.80%	31.40%	33.30%	33.30%
Provisional net tax benefit	-0.40%	-24.50%	0.00%	0.00%	0.00%	0.00%
Effective income tax rate	17.70%	2.70%	28.80%	31.40%	33.30%	33.30%

The effective income tax rate (EITR) exhibited a general downward trajectory over the six-year period, transitioning from a stable 33.3% in 2014 and 2015 to 17.7% by May 2019. This decline was characterized by a gradual reduction between 2016 and 2017, followed by significant volatility in 2018 and a subsequent stabilization in 2019.

Statutory Rate Evolution: The United States statutory income tax rate remained constant at 35.00% from 2014 through 2017. A marked reduction occurred in 2018 to 29.40%, further decreasing to 21.00% in 2019, reflecting systemic changes in the federal tax environment.
Drivers of Tax Rate Reductions: Several recurring factors consistently lowered the effective tax rate below the statutory benchmark. Foreign rate differences provided a persistent downward adjustment, ranging from -0.10% in 2014 to a peak reduction of -3.50% in 2017. Similarly, the domestic manufacturing deduction consistently reduced the tax burden, fluctuating between -1.90% and -2.90% throughout most of the period.
Impact of Non-Recurring Items: Specific anomalies contributed to year-over-year variance. In 2015, the repatriation of foreign earnings increased the tax rate by 4.50%. In 2016, non-deductible goodwill added 2.60% to the rate. Conversely, 2019 saw a significant reduction due to a capital loss of -3.70%.
Analysis of the 2018 Fiscal Anomaly: The most significant deviation occurred in 2018, where the final EITR dropped to 2.70%. While the EITR before provisional adjustments was 27.20%, a provisional net tax benefit of -24.50% was applied, effectively neutralizing the majority of the tax liability for that period.
State and Local Tax Trends: State and local income taxes, net of federal benefits, showed a general upward trend. Starting at 1.40% in 2014, these taxes reached a peak of 2.50% in 2019, indicating an increasing proportional impact of regional taxation relative to the overall tax structure.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.

How can I help you?

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

General Mills Inc., components of deferred tax assets and liabilities

US$ in thousands

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
Accrued liabilities	50,900)	47,200)	70,000)	89,900)	98,000)	106,000)
Compensation and employee benefits	196,600)	210,200)	419,200)	491,500)	536,200)	546,000)
Unrealized hedges	—)	—)	—)	—)	800)	—)
Pension	103,200)	57,100)	196,300)	322,000)	169,000)	—)
Tax credit carryforwards	7,300)	7,400)	18,400)	4,500)	5,600)	78,900)
Stock, partnership, and miscellaneous investments	104,200)	147,900)	276,400)	353,600)	384,100)	427,900)
Capital losses	73,100)	12,900)	29,800)	14,500)	6,100)	13,000)
Net operating losses	141,700)	161,200)	109,500)	97,900)	89,300)	71,400)
Other	71,300)	52,900)	85,600)	84,100)	74,500)	117,700)
Gross deferred tax assets	748,300)	696,800)	1,205,200)	1,458,000)	1,363,600)	1,360,900)
Valuation allowance	(213,700)	(176,000)	(231,800)	(227,000)	(215,400)	(221,600)
Net deferred tax assets	534,600)	520,800)	973,400)	1,231,000)	1,148,200)	1,139,300)
Brands	(1,472,600)	(1,498,700)	(1,310,100)	(1,311,700)	(1,346,300)	(1,373,400)
Fixed assets	(377,800)	(329,500)	(484,500)	(476,300)	(446,500)	(499,400)
Pension	—)	—)	—)	—)	—)	(2,000)
Intangible assets	(259,700)	(255,100)	(238,600)	(221,800)	(208,400)	(204,200)
Tax lease transactions	(23,900)	(26,000)	(45,800)	(48,000)	(50,800)	(53,100)
Inventories	(39,000)	(38,800)	(60,000)	(53,000)	(59,700)	(60,600)
Stock, partnership, and miscellaneous investments	(330,000)	(317,100)	(479,400)	(476,000)	(472,500)	(470,700)
Unrealized hedges	(27,900)	(28,500)	(45,400)	(22,600)	—)	(22,800)
Other	(34,700)	(30,900)	(29,000)	(21,200)	(14,200)	(45,000)
Gross deferred tax liabilities	(2,565,600)	(2,524,600)	(2,692,800)	(2,630,600)	(2,598,400)	(2,731,200)
Net deferred tax asset (liability)	(2,031,000)	(2,003,800)	(1,719,400)	(1,399,600)	(1,450,200)	(1,591,900)

The net deferred tax position shifted from a liability of 1.59 billion USD in 2014 to a liability of 2.03 billion USD by 2019. This widening of the net deferred tax liability is primarily driven by a substantial contraction in gross deferred tax assets, while gross deferred tax liabilities remained relatively stable over the analyzed period.

Deferred Tax Asset Components: Gross deferred tax assets experienced a significant downward trend, decreasing from 1.36 billion USD in 2014 to 748.3 million USD in 2019. The most pronounced declines occurred in compensation and employee benefits, which fell from 546 million USD to 196.6 million USD, and stock, partnership, and miscellaneous investments, which dropped from 427.9 million USD to 104.2 million USD. Conversely, net operating losses showed a general increase, rising from 71.4 million USD in 2014 to 141.7 million USD in 2019.
Deferred Tax Liability Components: Gross deferred tax liabilities remained comparatively stable, moving from 2.73 billion USD in 2014 to 2.57 billion USD in 2019. The liability associated with brands remained the dominant component, consistently hovering between 1.31 billion USD and 1.50 billion USD. Liabilities related to intangible assets demonstrated a steady increase, growing from 204.2 million USD in 2014 to 259.7 million USD in 2019. Liabilities for fixed assets decreased from 499.4 million USD to 377.8 million USD over the same period.
Valuation Allowance and Net Position: The valuation allowance against deferred tax assets remained relatively consistent, fluctuating between 176 million USD and 231.8 million USD. Because the valuation allowance did not decrease proportionally with the gross deferred tax assets, the net deferred tax asset decreased from 1.14 billion USD in 2014 to 534.6 million USD in 2019, further contributing to the increase in the overall net deferred tax liability.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.

How can I help you?

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

General Mills Inc., deferred tax assets and liabilities, classification

US$ in thousands

		May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
	Current deferred tax assets	—)	—)	—)	—)	100,100)	74,100)
	Noncurrent deferred tax liabilities	2,031,000)	2,003,800)	1,719,400)	1,399,600)	1,550,300)	1,666,000)

An examination of the deferred tax positions reveals a substantial predominance of noncurrent deferred tax liabilities over current deferred tax assets. The overall financial posture is characterized by a significant long-term tax obligation that experienced periods of both contraction and expansion between 2014 and 2019.

Current Deferred Tax Assets: Available data indicates a growth in current deferred tax assets from 74,100 thousand US dollars in 2014 to 100,100 thousand US dollars in 2015, representing an increase of approximately 35%. Data for this specific item is absent for the subsequent four fiscal years.
Noncurrent Deferred Tax Liabilities: A fluctuating trend is observed in noncurrent liabilities over the six-year period. A downward trajectory was present from 2014 through 2016, where liabilities decreased from 1,666,000 thousand US dollars to a period low of 1,399,600 thousand US dollars. This trend reversed sharply starting in 2017, with liabilities climbing to 1,719,400 thousand US dollars, further increasing to 2,003,800 thousand US dollars in 2018, and reaching a peak of 2,031,000 thousand US dollars in 2019. The increase from the 2016 trough to the 2019 peak represents a growth of approximately 45%.
Net Deferred Tax Analysis: The disparity between current assets and noncurrent liabilities suggests a heavily weighted long-term liability position. The magnitude of the noncurrent liabilities consistently exceeds the reported current assets by a wide margin, indicating that the timing differences between accounting and tax treatments predominantly result in future taxable amounts rather than deductible assets.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.

How can I help you?

General Mills Inc., Financial Data: Reported vs. Adjusted

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

General Mills Inc., adjustments to financial statements

US$ in thousands

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
Adjustment to Current Assets
Current assets (as reported)	4,186,500)	4,123,700)	4,061,400)	3,937,200)	3,785,700)	4,393,500)
Less: Current deferred tax assets, net	—)	—)	—)	—)	100,100)	74,100)
Current assets (adjusted)	4,186,500)	4,123,700)	4,061,400)	3,937,200)	3,685,600)	4,319,400)
Adjustment to Total Assets
Total assets (as reported)	30,111,200)	30,624,000)	21,812,600)	21,712,300)	21,964,500)	23,145,700)
Less: Current deferred tax assets, net	—)	—)	—)	—)	100,100)	74,100)
Total assets (adjusted)	30,111,200)	30,624,000)	21,812,600)	21,712,300)	21,864,400)	23,071,600)
Adjustment to Total Liabilities
Total liabilities (as reported)	22,191,800)	23,355,400)	16,216,200)	15,559,600)	15,792,900)	15,156,200)
Less: Noncurrent deferred tax liabilities, net	2,031,000)	2,003,800)	1,719,400)	1,399,600)	1,550,300)	1,666,000)
Total liabilities (adjusted)	20,160,800)	21,351,600)	14,496,800)	14,160,000)	14,242,600)	13,490,200)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	7,054,500)	6,141,100)	4,327,900)	4,930,200)	4,996,700)	6,534,800)
Less: Net deferred tax assets (liabilities)	(2,031,000)	(2,003,800)	(1,719,400)	(1,399,600)	(1,450,200)	(1,591,900)
Stockholders’ equity (adjusted)	9,085,500)	8,144,900)	6,047,300)	6,329,800)	6,446,900)	8,126,700)
Adjustment to Net Earnings Attributable To General Mills
Net earnings attributable to General Mills (as reported)	1,752,700)	2,131,000)	1,657,500)	1,697,400)	1,221,300)	1,824,400)
Add: Deferred income tax expense (benefit)	96,000)	(504,300)	183,900)	120,600)	25,300)	172,500)
Net earnings attributable to General Mills (adjusted)	1,848,700)	1,626,700)	1,841,400)	1,818,000)	1,246,600)	1,996,900)

An analysis of the financial adjustments reveals a consistent divergence between reported and adjusted balance sheet figures, primarily driven by the removal of deferred tax liabilities. This adjustment fundamentally alters the presentation of the entity's capital structure and solvency metrics across the period from 2014 to 2019.

Asset Adjustment Trends: Adjustments to current and total assets were present in 2014 and 2015, where adjusted figures were lower than reported values. However, from 2016 through 2019, reported and adjusted asset values became identical, indicating that the deferred tax adjustments shifted exclusively to the liability and equity accounts in the latter half of the period.
Liability and Equity Impact: A significant and persistent gap is observed between reported and adjusted total liabilities. Adjusted liabilities remain consistently lower than reported liabilities throughout the analyzed timeframe, confirming a substantial volume of deferred tax liabilities. Consequently, adjusted stockholders' equity is materially higher than reported equity in every year. By May 2019, adjusted equity reached 9.08 billion USD compared to a reported 7.05 billion USD, demonstrating that the removal of deferred taxes significantly enhances the adjusted net asset position.
Net Earnings Divergence: The relationship between reported and adjusted net earnings is inconsistent across the six-year span. In 2014, 2016, 2017, and 2019, adjusted earnings exceeded reported earnings, suggesting that tax adjustments had a positive impact on the net result. Conversely, in 2018, reported earnings of 2.13 billion USD were significantly higher than the adjusted earnings of 1.63 billion USD, indicating a reversal in the effect of tax adjustments during that specific fiscal year.
Balance Sheet Expansion: A substantial increase in the scale of the balance sheet is observed in 2018, with reported total assets rising from 21.81 billion USD in 2017 to 30.62 billion USD. This expansion was accompanied by a corresponding surge in both reported and adjusted liabilities. Despite the increase in absolute values, the gap between reported and adjusted liabilities persisted, maintaining the trend of deferred tax influence on the overall leverage profile.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.

How can I help you?

General Mills Inc., Financial Ratios: Reported vs. Adjusted

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

General Mills Inc., adjusted financial ratios

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
Current Ratio
Reported current ratio	0.59	0.56	0.76	0.79	0.77	0.81
Adjusted current ratio	0.59	0.56	0.76	0.79	0.75	0.80
Net Profit Margin
Reported net profit margin	10.39%	13.54%	10.61%	10.25%	6.93%	10.19%
Adjusted net profit margin	10.96%	10.33%	11.79%	10.98%	7.07%	11.15%
Total Asset Turnover
Reported total asset turnover	0.56	0.51	0.72	0.76	0.80	0.77
Adjusted total asset turnover	0.56	0.51	0.72	0.76	0.81	0.78
Financial Leverage
Reported financial leverage	4.27	4.99	5.04	4.40	4.40	3.54
Adjusted financial leverage	3.31	3.76	3.61	3.43	3.39	2.84
Return on Equity (ROE)
Reported ROE	24.85%	34.70%	38.30%	34.43%	24.44%	27.92%
Adjusted ROE	20.35%	19.97%	30.45%	28.72%	19.34%	24.57%
Return on Assets (ROA)
Reported ROA	5.82%	6.96%	7.60%	7.82%	5.56%	7.88%
Adjusted ROA	6.14%	5.31%	8.44%	8.37%	5.70%	8.66%

The removal of deferred taxes reveals significant discrepancies in leverage and return metrics, while liquidity and efficiency ratios remain largely unaffected by these adjustments.

Liquidity and Operational Efficiency: The current ratio and total asset turnover exhibit nearly identical values between reported and adjusted figures, indicating that deferred tax accounts have a negligible impact on these metrics. Both ratios show a general downward trend over the period. The current ratio declined from 0.81 in 2014 to 0.59 in 2019, with a notable low of 0.56 in 2018. Similarly, total asset turnover decreased from 0.77 in 2014 to 0.56 in 2019, also hitting a minimum of 0.51 in 2018.
Profitability Margins: Adjusted net profit margins were generally higher than reported margins from 2014 through 2017. A reversal occurred in 2018, where the reported net profit margin peaked at 13.54% while the adjusted margin dropped to 10.33%. By 2019, the adjusted margin again exceeded the reported margin, reflecting a more stable profit profile when deferred tax volatility is removed.
Financial Leverage: A substantial variance is observed between reported and adjusted financial leverage. Reported leverage trended upward from 3.54 in 2014 to a peak of 5.04 in 2017 before moderating to 4.27 in 2019. Adjusted leverage remained consistently and significantly lower, ranging from 2.84 to 3.76. This suggests that deferred tax liabilities contribute heavily to the reported leverage, and their removal provides a more conservative view of the company's capital structure.
Returns on Equity and Assets: The impact of deferred tax removal is most pronounced in the Return on Equity (ROE). Reported ROE reached highs of 38.30% in 2017, whereas the adjusted ROE for the same year was 30.45%. The discrepancy peaked in 2018, where reported ROE was 34.70% compared to an adjusted ROE of 19.97%. Return on Assets (ROA) demonstrates less extreme variance but generally shows higher adjusted values between 2014 and 2017, followed by a decrease in 2018 where the adjusted ROA (5.31%) fell below the reported ROA (6.96%).

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.

How can I help you?

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
As Reported
Selected Financial Data (US$ in thousands)
Current assets	4,186,500)	4,123,700)	4,061,400)	3,937,200)	3,785,700)	4,393,500)
Current liabilities	7,087,100)	7,341,900)	5,330,800)	5,014,700)	4,890,100)	5,423,500)
Liquidity Ratio
Current ratio¹	0.59	0.56	0.76	0.79	0.77	0.81
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted current assets	4,186,500)	4,123,700)	4,061,400)	3,937,200)	3,685,600)	4,319,400)
Current liabilities	7,087,100)	7,341,900)	5,330,800)	5,014,700)	4,890,100)	5,423,500)
Liquidity Ratio
Adjusted current ratio²	0.59	0.56	0.76	0.79	0.75	0.80

2019 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= 4,186,500 ÷ 7,087,100 = 0.59

² Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 4,186,500 ÷ 7,087,100 = 0.59

An analysis of the liquidity metrics from 2014 to 2019 reveals a period of relative stability followed by a notable decline in the short-term solvency position. While current assets demonstrated a steady recovery after an initial drop, the current ratios indicate a tightening of liquidity, particularly in the final two years of the period.

Current Asset Trends: Reported current assets decreased from 4,393,500 thousand US$ in 2014 to 3,785,700 thousand US$ in 2015. Following this contraction, a consistent upward trend was established, with assets increasing annually to reach 4,186,500 thousand US$ by May 26, 2019. Adjusted current assets mirrored this pattern, although they remained slightly below reported values in 2014 and 2015 before converging completely with reported figures from 2016 through 2019.
Current Ratio Analysis: The reported current ratio fluctuated within a narrow range between 0.76 and 0.81 from 2014 to 2017, consistently remaining below 1.0. A sharp deterioration occurred in 2018, where the ratio dropped to 0.56, followed by a marginal improvement to 0.59 in 2019. This trend suggests that current liabilities increased significantly relative to current assets during the 2018 fiscal year.
Comparison of Reported and Adjusted Metrics: The impact of adjustments on the current ratio was minimal and diminished over time. In 2014 and 2015, the adjusted current ratio was slightly lower than the reported ratio, recorded at 0.80 and 0.75 respectively, compared to 0.81 and 0.77. From 2016 onward, the reported and adjusted current ratios are identical, indicating that the factors necessitating adjustments to current assets no longer materially influenced the liquidity ratios.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.

How can I help you?

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
As Reported
Selected Financial Data (US$ in thousands)
Net earnings attributable to General Mills	1,752,700)	2,131,000)	1,657,500)	1,697,400)	1,221,300)	1,824,400)
Net sales	16,865,200)	15,740,400)	15,619,800)	16,563,100)	17,630,300)	17,909,600)
Profitability Ratio
Net profit margin¹	10.39%	13.54%	10.61%	10.25%	6.93%	10.19%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net earnings attributable to General Mills	1,848,700)	1,626,700)	1,841,400)	1,818,000)	1,246,600)	1,996,900)
Net sales	16,865,200)	15,740,400)	15,619,800)	16,563,100)	17,630,300)	17,909,600)
Profitability Ratio
Adjusted net profit margin²	10.96%	10.33%	11.79%	10.98%	7.07%	11.15%

2019 Calculations

¹ Net profit margin = 100 × Net earnings attributable to General Mills ÷ Net sales
= 100 × 1,752,700 ÷ 16,865,200 = 10.39%

² Adjusted net profit margin = 100 × Adjusted net earnings attributable to General Mills ÷ Net sales
= 100 × 1,848,700 ÷ 16,865,200 = 10.96%

Analysis of the profitability metrics from May 2014 to May 2019 reveals a period of volatility punctuated by a significant contraction in 2015 and a notable divergence between reported and adjusted results in 2018.

Net Earnings Trajectory: Reported net earnings exhibited fluctuations, starting at 1.82 billion USD in 2014, dropping to a low of 1.22 billion USD in 2015, and peaking at 2.13 billion USD in 2018. Adjusted net earnings followed a similar downward trend in 2015 but showed more stability in subsequent years, ending the period at 1.85 billion USD in 2019.
Net Profit Margin Patterns: The reported net profit margin experienced a sharp decline to 6.93% in 2015 before recovering to exceed 10% for the remainder of the period. The adjusted net profit margin mirrored this 2015 dip, falling to 7.07%, but generally maintained a tighter range between 10.33% and 11.79% across the other five years.
Comparative Analysis of Reported vs. Adjusted Margins: A significant anomaly is observed in May 2018, where the reported net profit margin reached a period high of 13.54%, while the adjusted net profit margin dropped to 10.33%. This inversion suggests the presence of substantial non-recurring gains or tax benefits that inflated the reported figures but were excluded from the adjusted operational view. In contrast, for the majority of the observed period, adjusted margins remained higher than reported margins, indicating that non-operational expenses typically exerted downward pressure on reported profitability.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.

How can I help you?

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
As Reported
Selected Financial Data (US$ in thousands)
Net sales	16,865,200)	15,740,400)	15,619,800)	16,563,100)	17,630,300)	17,909,600)
Total assets	30,111,200)	30,624,000)	21,812,600)	21,712,300)	21,964,500)	23,145,700)
Activity Ratio
Total asset turnover¹	0.56	0.51	0.72	0.76	0.80	0.77
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Net sales	16,865,200)	15,740,400)	15,619,800)	16,563,100)	17,630,300)	17,909,600)
Adjusted total assets	30,111,200)	30,624,000)	21,812,600)	21,712,300)	21,864,400)	23,071,600)
Activity Ratio
Adjusted total asset turnover²	0.56	0.51	0.72	0.76	0.81	0.78

2019 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 16,865,200 ÷ 30,111,200 = 0.56

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 16,865,200 ÷ 30,111,200 = 0.56

The analysis of adjusted total asset turnover reveals a period of relative stability followed by a significant decline and a subsequent partial recovery between 2014 and 2019. The adjusted total asset turnover ratio peaked at 0.81 in 2015 before entering a downward trajectory that culminated in a low of 0.51 in 2018.

Asset Base Trends: Adjusted total assets remained relatively stable from 2014 to 2017, fluctuating between US$ 21.71 billion and US$ 23.07 billion. A substantial increase occurred in 2018, where adjusted total assets rose to US$ 30.62 billion, representing a significant expansion of the asset base. This figure slightly decreased to US$ 30.11 billion by 2019.
Asset Turnover Efficiency: The efficiency of asset utilization, as measured by the adjusted total asset turnover, showed a consistent decline from 0.81 in 2015 to 0.72 in 2017. The sharp increase in total assets observed in 2018 coincided with a precipitous drop in the turnover ratio to 0.51. This suggests that the growth in the asset base was not matched by a proportional increase in revenue during that period. A slight recovery to 0.56 was observed in 2019.
Reported versus Adjusted Metrics: There is a high degree of correlation between reported and adjusted metrics. Minor variances were present in 2014 and 2015, where adjusted total asset turnover was slightly higher than reported figures (0.78 vs 0.77 and 0.81 vs 0.80, respectively). From 2016 through 2019, the reported and adjusted values for both total assets and asset turnover converged, remaining identical for the remainder of the period.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.

How can I help you?

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
As Reported
Selected Financial Data (US$ in thousands)
Total assets	30,111,200)	30,624,000)	21,812,600)	21,712,300)	21,964,500)	23,145,700)
Stockholders’ equity	7,054,500)	6,141,100)	4,327,900)	4,930,200)	4,996,700)	6,534,800)
Solvency Ratio
Financial leverage¹	4.27	4.99	5.04	4.40	4.40	3.54
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	30,111,200)	30,624,000)	21,812,600)	21,712,300)	21,864,400)	23,071,600)
Adjusted stockholders’ equity	9,085,500)	8,144,900)	6,047,300)	6,329,800)	6,446,900)	8,126,700)
Solvency Ratio
Adjusted financial leverage²	3.31	3.76	3.61	3.43	3.39	2.84

2019 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 30,111,200 ÷ 7,054,500 = 4.27

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 30,111,200 ÷ 9,085,500 = 3.31

The analysis of financial leverage between May 2014 and May 2019 reveals a consistent divergence between reported and adjusted metrics. This variance is primarily driven by significant differences in stockholders' equity, which result in the adjusted financial leverage ratio being consistently lower and less volatile than the reported ratio.

Asset Trends: Reported and adjusted total assets followed a nearly identical trajectory over the six-year period. Assets remained relatively stable between 2014 and 2017, fluctuating within a range of 21.7 billion to 23.1 billion US$. A significant expansion occurred in 2018, with assets rising to 30.6 billion US$, followed by a slight contraction to 30.1 billion US$ in 2019.
Equity Analysis: A substantial gap is observed between reported and adjusted stockholders' equity. While reported equity experienced a decline from 6.5 billion US$ in 2014 to a low of 4.3 billion US$ in 2017, adjusted equity remained higher throughout the entire period. Adjusted equity reached its peak in 2019 at 9.08 billion US$, whereas reported equity for the same period was 7.05 billion US$, indicating that adjustments significantly bolster the equity base.
Reported Financial Leverage: The reported financial leverage ratio exhibited an upward trend for the first four years, rising from 3.54 in 2014 to a peak of 5.04 in 2017. This suggests an increase in financial risk or a higher reliance on debt relative to reported equity during this interval. Following 2017, the ratio trended downward, closing at 4.27 in 2019.
Adjusted Financial Leverage: The adjusted financial leverage ratio presents a more conservative profile, starting at 2.84 in 2014 and peaking later than the reported ratio, reaching 3.76 in 2018. By 2019, the adjusted ratio decreased to 3.31. The adjusted figures consistently mitigate the volatility seen in reported leverage, suggesting that when accounting for specific adjustments, the company's financial leverage is lower and more stable than reported figures imply.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.

How can I help you?

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
As Reported
Selected Financial Data (US$ in thousands)
Net earnings attributable to General Mills	1,752,700)	2,131,000)	1,657,500)	1,697,400)	1,221,300)	1,824,400)
Stockholders’ equity	7,054,500)	6,141,100)	4,327,900)	4,930,200)	4,996,700)	6,534,800)
Profitability Ratio
ROE¹	24.85%	34.70%	38.30%	34.43%	24.44%	27.92%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net earnings attributable to General Mills	1,848,700)	1,626,700)	1,841,400)	1,818,000)	1,246,600)	1,996,900)
Adjusted stockholders’ equity	9,085,500)	8,144,900)	6,047,300)	6,329,800)	6,446,900)	8,126,700)
Profitability Ratio
Adjusted ROE²	20.35%	19.97%	30.45%	28.72%	19.34%	24.57%

2019 Calculations

¹ ROE = 100 × Net earnings attributable to General Mills ÷ Stockholders’ equity
= 100 × 1,752,700 ÷ 7,054,500 = 24.85%

² Adjusted ROE = 100 × Adjusted net earnings attributable to General Mills ÷ Adjusted stockholders’ equity
= 100 × 1,848,700 ÷ 9,085,500 = 20.35%

An analysis of the financial performance from May 2014 to May 2019 reveals significant volatility in both net earnings and stockholders' equity, which directly influenced the fluctuations in Return on Equity (ROE). A consistent divergence is observed between reported and adjusted figures, indicating that non-recurring items or specific accounting adjustments played a substantial role in the company's financial presentation during this period.

Net Earnings Trends: Reported net earnings exhibited considerable instability, reaching a peak of 2,131,000 thousand USD in 2018 before declining to 1,752,700 thousand USD in 2019. Adjusted net earnings followed a similar volatile trajectory but remained more stable in the later years, closing at 1,848,700 thousand USD in 2019. A notable anomaly occurred in 2018, where reported earnings significantly exceeded adjusted earnings, contrary to the pattern observed in other years.
Stockholders' Equity Dynamics: A downward trend in equity was observed between 2014 and 2017, with reported stockholders' equity falling from 6,534,800 thousand USD to a low of 4,327,900 thousand USD. This was followed by a sharp recovery in 2018 and 2019, ending at 7,054,500 thousand USD. Adjusted stockholders' equity consistently remained higher than reported equity throughout the entire period, maintaining a gap of approximately 1.5 to 2 billion USD, which suggests the impact of significant adjustments to the equity base.
Return on Equity (ROE) Analysis: Reported ROE showed a peak of 38.30% in 2017, driven by a combination of stable earnings and the lowest equity levels of the period. Conversely, Adjusted ROE peaked at 30.45% in the same year. A persistent gap is evident where reported ROE figures are generally higher than adjusted ROE figures. This discrepancy is most pronounced in 2018, where reported ROE was 34.70% compared to an adjusted ROE of 19.97%, reflecting the divergence in both the earnings and equity components for that fiscal year.
Comparative Performance Insights: The transition from 2017 to 2019 marks a period of normalization and equity growth. While reported ROE dropped from 38.30% to 24.85%, the adjusted ROE remained relatively stable between 19.97% and 20.35% during the final two years. This suggests that while the reported figures showed a sharp decline in efficiency, the adjusted performance remained consistent, indicating that the change was primarily driven by the expansion of the equity base rather than a collapse in operational profitability.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.

How can I help you?

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
As Reported
Selected Financial Data (US$ in thousands)
Net earnings attributable to General Mills	1,752,700)	2,131,000)	1,657,500)	1,697,400)	1,221,300)	1,824,400)
Total assets	30,111,200)	30,624,000)	21,812,600)	21,712,300)	21,964,500)	23,145,700)
Profitability Ratio
ROA¹	5.82%	6.96%	7.60%	7.82%	5.56%	7.88%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net earnings attributable to General Mills	1,848,700)	1,626,700)	1,841,400)	1,818,000)	1,246,600)	1,996,900)
Adjusted total assets	30,111,200)	30,624,000)	21,812,600)	21,712,300)	21,864,400)	23,071,600)
Profitability Ratio
Adjusted ROA²	6.14%	5.31%	8.44%	8.37%	5.70%	8.66%

2019 Calculations

¹ ROA = 100 × Net earnings attributable to General Mills ÷ Total assets
= 100 × 1,752,700 ÷ 30,111,200 = 5.82%

² Adjusted ROA = 100 × Adjusted net earnings attributable to General Mills ÷ Adjusted total assets
= 100 × 1,848,700 ÷ 30,111,200 = 6.14%

The financial performance from 2014 to 2019 is characterized by volatility in net earnings and a significant expansion of the asset base, which has exerted downward pressure on return on assets (ROA) metrics.

Earnings Trends: Reported net earnings exhibited fluctuations, reaching a low of 1.22 billion USD in 2015 before peaking at 2.13 billion USD in 2018. Adjusted net earnings followed a similar volatile pattern but remained distinct from reported figures, notably staying higher than reported earnings in 2014, 2016, 2017, and 2019. A reversal occurred in 2018, where adjusted net earnings were significantly lower than reported net earnings, falling to 1.63 billion USD.
Asset Base Expansion: Total assets remained relatively stable between 2014 and 2017, fluctuating within a narrow range of 21.7 billion USD to 23.1 billion USD. However, a substantial increase is observed in 2018, with total assets rising to 30.6 billion USD, a level that was largely maintained into 2019. This sharp increase represents a significant expansion of the company's resource base.
Return on Assets (ROA) Analysis: Reported ROA declined from 7.88% in 2014 to 5.82% by 2019. While there was a recovery between 2016 and 2017, the expansion of the asset base in 2018 contributed to a downward trajectory in efficiency. Adjusted ROA showed more pronounced volatility, peaking at 8.66% in 2014 and dropping to a period low of 5.31% in 2018. The divergence between reported and adjusted ROA was most prominent in 2018, where the adjusted metric underestimated the reported return by 1.65 percentage points.
Comparative Efficiency: For the majority of the period, adjusted ROA exceeded reported ROA, suggesting that adjustments to earnings typically improved the perceived efficiency of asset utilization. The trend shifted in 2018, indicating that specific adjustments during that fiscal year negatively impacted the adjusted performance relative to the reported figures.

AI Ask an analyst for more