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Microsoft Excel LibreOffice Calc

General Mills Inc. (GIS)


Financial Reporting Quality: Aggregate Accruals

Advanced level

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

General Mills Inc., balance sheet computation of aggregate accruals

US$ in thousands

Microsoft Excel LibreOffice Calc
May 26, 2019 May 27, 2018 May 28, 2017 May 29, 2016 May 31, 2015 May 25, 2014
Operating Assets
Total assets 30,111,200  30,624,000  21,812,600  21,712,300  21,964,500  23,145,700 
Less: Cash and cash equivalents 450,000  399,000  766,100  763,700  334,200  867,300 
Operating assets 29,661,200  30,225,000  21,046,500  20,948,600  21,630,300  22,278,400 
Operating Liabilities
Total liabilities 22,191,800  23,355,400  16,216,200  15,559,600  15,792,900  15,156,200 
Less: Current portion of long-term debt 1,396,500  1,600,100  604,700  1,103,400  1,000,400  1,250,600 
Less: Notes payable 1,468,700  1,549,800  1,234,100  269,800  615,800  1,111,700 
Less: Long-term debt, excluding current portion 11,624,800  12,668,700  7,642,900  7,057,700  7,607,700  6,423,500 
Operating liabilities 7,701,800  7,536,800  6,734,500  7,128,700  6,569,000  6,370,400 
 
Net operating assets1 21,959,400  22,688,200  14,312,000  13,819,900  15,061,300  15,908,000 
Balance-sheet-based aggregate accruals2 (728,800) 8,376,200  492,100  (1,241,400) (846,700)
Financial Ratio
Balance-sheet-based accruals ratio3 -3.26% 45.28% 3.50% -8.60% -5.47%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Kraft Heinz Co. -16.11% 11.41% -1.00%
Mondelēz International Inc. -0.23% 5.75% -2.32% -3.06%
Balance-Sheet-Based Accruals Ratio, Sector
Food Producers 0.00% -10.93% 9.63% -1.42% 99.70%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Goods 0.00% 2.95% 6.02% 5.09% 11.98%

Based on: 10-K (filing date: 2019-06-28), 10-K (filing date: 2018-06-29), 10-K (filing date: 2017-06-29), 10-K (filing date: 2016-06-30), 10-K (filing date: 2015-07-06), 10-K (filing date: 2014-07-03).

1 2019 Calculation
Net operating assets = Operating assets – Operating liabilities
= 29,661,2007,701,800 = 21,959,400

2 2019 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2019 – Net operating assets2018
= 21,959,40022,688,200 = -728,800

3 2019 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -728,800 ÷ [(21,959,400 + 22,688,200) ÷ 2] = -3.26%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, General Mills Inc. improved earnings quality from 2018 to 2019.

Cash-Flow-Statement-Based Accruals Ratio

General Mills Inc., cash flow statement computation of aggregate accruals

US$ in thousands

Microsoft Excel LibreOffice Calc
May 26, 2019 May 27, 2018 May 28, 2017 May 29, 2016 May 31, 2015 May 25, 2014
Net earnings attributable to General Mills 1,752,700  2,131,000  1,657,500  1,697,400  1,221,300  1,824,400 
Less: Net cash provided by operating activities 2,807,000  2,841,000  2,313,300  2,629,800  2,542,800  2,541,000 
Less: Net cash (used) provided by investing activities (556,500) (8,685,400) (646,900) 93,400  (1,602,200) (561,800)
Cash-flow-statement-based aggregate accruals (497,800) 7,975,400  (8,900) (1,025,800) 280,700  (154,800)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -2.23% 43.11% -0.06% -7.10% 1.81%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Kraft Heinz Co. -14.67% 10.24% -0.57%
Mondelēz International Inc. 1.53% 1.50% -0.36% 2.11%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Food Producers 0.00% -9.39% 7.49% -0.50% 10.24%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Goods 0.00% 0.41% 6.31% 9.40% 9.67%

Based on: 10-K (filing date: 2019-06-28), 10-K (filing date: 2018-06-29), 10-K (filing date: 2017-06-29), 10-K (filing date: 2016-06-30), 10-K (filing date: 2015-07-06), 10-K (filing date: 2014-07-03).

1 2019 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -497,800 ÷ [(21,959,400 + 22,688,200) ÷ 2] = -2.23%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, General Mills Inc. improved earnings quality from 2018 to 2019.