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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

General Mills Inc., economic profit calculation

US$ in thousands

12 months ended:	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
Net operating profit after taxes (NOPAT)¹	2,274,308)	1,920,512)	2,079,159)	2,028,941)	1,616,844)	2,219,325)
Cost of capital²	10.90%	10.15%	11.75%	12.66%	12.01%	12.06%
Invested capital³	27,385,340)	27,608,082)	18,984,610)	18,400,346)	19,241,428)	19,362,635)

Economic profit⁴	(711,044)	(882,719)	(151,667)	(300,187)	(694,256)	(114,887)

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).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2019 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 2,274,308 – 10.90% × 27,385,340 = -711,044

Analysis of the financial performance from 2014 to 2019 reveals a persistent trend of negative economic profit, indicating that the company failed to generate returns in excess of its cost of capital throughout the entire six-year period. While operational profitability showed signs of recovery toward the end of the period, the overall value creation remained negative.

Net Operating Profit After Taxes (NOPAT): NOPAT exhibited significant volatility, beginning at 2,219,325 thousand US$ in 2014 before dropping to a period low of 1,616,844 thousand US$ in 2015. A recovery trend followed, peaking at 2,274,308 thousand US$ by 2019. Despite these fluctuations, the operational earnings were insufficient to offset the charges associated with the capital employed.
Invested Capital and Capital Expansion: Invested capital remained relatively stable between 2014 and 2017, fluctuating within the 18.4 billion to 19.4 billion US$ range. However, a substantial increase occurred in 2018, where invested capital jumped to 27,608,082 thousand US$, representing a significant expansion of the capital base. This level remained largely consistent into 2019.
Cost of Capital Trends: The cost of capital fluctuated within a narrow band, ranging from a high of 12.66% in 2016 to a low of 10.15% in 2018. Although the cost of capital decreased during the year of the largest capital expansion, this reduction was not sufficient to pivot the economic profit into positive territory.
Economic Profit and Value Destruction: Economic profit remained negative for all reported years, signifying continuous value destruction from a shareholder perspective. The most pronounced deficit occurred in 2018, reaching -882,719 thousand US$. This coincided with the sharp increase in invested capital, suggesting that the additional capital deployed did not yield an immediate or proportional increase in NOPAT. The economic loss in 2019 improved slightly to -711,044 thousand US$, driven by the recovery in NOPAT, yet the company remained unable to achieve economic break-even.

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General Mills Inc., NOPAT calculation

US$ in thousands

12 months ended:	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)
Deferred income tax expense (benefit)¹	96,000)	(504,300)	183,900)	120,600)	25,300)	172,500)
Increase (decrease) in allowance for doubtful accounts²	400)	4,100)	(5,300)	4,300)	4,300)	1,100)
Increase (decrease) in LIFO reserve³	300)	4,100)	(10,200)	5,100)	(2,700)	(4,900)
Increase (decrease) in reserve for restructuring and other exit charges⁴	(30,300)	(18,200)	8,400)	(44,200)	117,300)	(16,000)
Increase (decrease) in equity equivalents⁵	66,400)	(514,300)	176,800)	85,800)	144,200)	152,700)
Interest expense, net of capitalized interest	527,400)	385,400)	302,100)	311,900)	328,600)	318,500)
Interest expense, operating lease liability⁶	14,607)	17,903)	14,529)	13,648)	12,667)	13,485)
Adjusted interest expense, net of capitalized interest	542,007)	403,303)	316,629)	325,548)	341,267)	331,985)
Tax benefit of interest expense, net of capitalized interest⁷	(113,822)	(118,571)	(110,820)	(113,942)	(119,443)	(116,195)
Adjusted interest expense, net of capitalized interest, after taxes⁸	428,186)	284,732)	205,809)	211,606)	221,824)	215,790)
(Gain) loss on marketable securities	(2,600)	(6,600)	—)	—)	—)	—)
Interest income	(5,600)	(11,700)	(7,000)	(8,100)	(13,200)	(16,100)
Investment income, before taxes	(8,200)	(18,300)	(7,000)	(8,100)	(13,200)	(16,100)
Tax expense (benefit) of investment income⁹	1,722)	5,380)	2,450)	2,835)	4,620)	5,635)
Investment income, after taxes¹⁰	(6,478)	(12,920)	(4,550)	(5,265)	(8,580)	(10,465)
Net income (loss) attributable to noncontrolling interest	33,500)	32,000)	43,600)	39,400)	38,100)	36,900)
Net operating profit after taxes (NOPAT)	2,274,308)	1,920,512)	2,079,159)	2,028,941)	1,616,844)	2,219,325)

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).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for doubtful accounts.

³ Addition of increase (decrease) in LIFO reserve. See details »

⁴ Addition of increase (decrease) in reserve for restructuring and other exit charges.

⁵ Addition of increase (decrease) in equity equivalents to net earnings attributable to General Mills.

⁶ 2019 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 437,340 × 3.34% = 14,607

⁷ 2019 Calculation
Tax benefit of interest expense, net of capitalized interest = Adjusted interest expense, net of capitalized interest × Statutory income tax rate
= 542,007 × 21.00% = 113,822

⁸ Addition of after taxes interest expense to net earnings attributable to General Mills.

⁹ 2019 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 8,200 × 21.00% = 1,722

¹⁰ Elimination of after taxes investment income.

The financial data shows the annual performance of the company over a six-year period from 2014 to 2019. Two key metrics are presented: net earnings attributable to the company and net operating profit after taxes (NOPAT).

Net Earnings Attributable to the Company: The net earnings exhibit fluctuations throughout the period. Starting from $1,824,400 thousand in 2014, there is a notable decline to $1,221,300 thousand in 2015. This is followed by a recovery phase where net earnings increase to $1,697,400 thousand in 2016 but then slightly dip to $1,657,500 thousand in 2017. The peak is observed in 2018 at $2,131,000 thousand, representing the highest net earnings in this timeframe. However, the following year, 2019, shows a decline to $1,752,700 thousand, reflecting a decrease of approximately 17.8% from the previous year’s peak.
Net Operating Profit After Taxes (NOPAT): NOPAT also shows variability but with a generally increasing trend. It begins at $2,219,325 thousand in 2014 and declines in 2015 to $1,616,844 thousand, mirroring the net earnings pattern. Thereafter, NOPAT steadily recovers and increases, reaching $2,029,941 thousand in 2016 and continuing its ascent with minor fluctuation to $2,079,159 thousand in 2017 and $1,920,512 thousand in 2018. The highest value is recorded in 2019 at $2,274,308 thousand, representing a strong recovery and the highest operational efficiency in terms of post-tax profits over the period.

Overall, both net earnings and NOPAT show an initial decline from 2014 to 2015, likely indicating a challenging year or adverse conditions. Despite this, the company demonstrates resilience with a recovery phase from 2016 onward. Net earnings reach their peak in 2018 but experience a downturn in 2019. Conversely, NOPAT recovers more robustly, peaking in 2019 and displaying stronger operational profitability relative to net earnings. This divergence in the final year may suggest changes in non-operating items, tax impacts, or other factors affecting net earnings differently than operating profit.

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General Mills Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
Income taxes	367,800)	57,300)	655,200)	755,200)	586,800)	883,300)
Less: Deferred income tax expense (benefit)	96,000)	(504,300)	183,900)	120,600)	25,300)	172,500)
Add: Tax savings from interest expense, net of capitalized interest	113,822)	118,571)	110,820)	113,942)	119,443)	116,195)
Less: Tax imposed on investment income	1,722)	5,380)	2,450)	2,835)	4,620)	5,635)
Cash operating taxes	383,900)	674,791)	579,670)	745,707)	676,323)	821,360)

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).

The financial data reveals a fluctuating trend in the income taxes and cash operating taxes over the six-year period.

Income Taxes

Income taxes decreased significantly from 883,300 thousand US dollars in May 2014 to 586,800 thousand US dollars in May 2015, representing a notable reduction.

Subsequently, there was an increase to 755,200 thousand US dollars in May 2016, followed by a decline to 655,200 thousand US dollars in May 2017.

In May 2018, income taxes declined sharply to 57,300 thousand US dollars, marking the lowest point in the period analyzed, before rising to 367,800 thousand US dollars in May 2019.

Cash Operating Taxes

Cash operating taxes exhibited a more stable but variable trend, starting at 821,360 thousand US dollars in May 2014 and decreasing to 676,323 thousand US dollars in May 2015.

There was a slight increase to 745,707 thousand US dollars in May 2016, followed by a decrease to 579,670 thousand US dollars in May 2017.

The value rose again to 674,791 thousand US dollars in May 2018 before declining sharply to 383,900 thousand US dollars in May 2019.

Overall, both income taxes and cash operating taxes show substantial volatility over the years. Income taxes show a steep decline around 2018, while cash operating taxes, although variable, remain generally higher than income taxes except for 2018. The trends suggest potential changes in tax obligations or tax planning strategies impacting these financial items during the examined period.

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General Mills Inc., invested capital calculation (financing approach)

US$ in thousands

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
Current portion of long-term debt	1,396,500)	1,600,100)	604,700)	1,103,400)	1,000,400)	1,250,600)
Notes payable	1,468,700)	1,549,800)	1,234,100)	269,800)	615,800)	1,111,700)
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 lease liability¹	437,340)	501,482)	452,610)	356,346)	357,828)	340,535)
Total reported debt & leases	14,927,340)	16,320,082)	9,934,310)	8,787,246)	9,581,728)	9,126,335)
Stockholders’ equity	7,054,500)	6,141,100)	4,327,900)	4,930,200)	4,996,700)	6,534,800)
Net deferred tax (assets) liabilities²	2,031,000)	2,003,800)	1,719,400)	1,399,600)	1,450,200)	1,591,900)
Allowance for doubtful accounts³	28,800)	28,400)	24,300)	29,600)	25,300)	21,000)
Excess of FIFO over LIFO cost⁴	213,500)	213,200)	209,100)	219,300)	214,200)	216,900)
Reserve for restructuring and other exit charges⁵	36,500)	66,800)	85,000)	76,600)	120,800)	3,500)
Equity equivalents⁶	2,309,800)	2,312,200)	2,037,800)	1,725,100)	1,810,500)	1,833,300)
Accumulated other comprehensive (income) loss, net of tax⁷	2,625,400)	2,429,000)	2,244,500)	2,612,200)	2,310,700)	1,340,300)
Redeemable interest	551,700)	776,200)	910,900)	845,600)	778,900)	984,100)
Noncontrolling interests	313,200)	351,300)	357,600)	376,900)	396,000)	470,600)
Adjusted stockholders’ equity	12,854,600)	12,009,800)	9,878,700)	10,490,000)	10,292,800)	11,163,100)
Construction in progress⁸	(343,800)	(692,900)	(553,000)	(702,700)	(622,200)	(600,800)
Marketable securities⁹	(52,800)	(28,900)	(275,400)	(174,200)	(10,900)	(326,000)
Invested capital	27,385,340)	27,608,082)	18,984,610)	18,400,346)	19,241,428)	19,362,635)

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).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of LIFO reserve. See details »

⁵ Addition of reserve for restructuring and other exit charges.

⁶ Addition of equity equivalents to stockholders’ equity.

⁷ Removal of accumulated other comprehensive income.

⁸ Subtraction of construction in progress.

⁹ Subtraction of marketable securities.

Total Reported Debt & Leases: The total reported debt and leases showed a fluctuating trend over the six-year period. Initially, there was a moderate increase from approximately $9.13 billion in 2014 to $9.58 billion in 2015, followed by a decline to about $8.79 billion in 2016. In 2017, the debt level rose again to roughly $9.93 billion. A significant increase occurred in 2018, reaching approximately $16.32 billion, the highest level in the period analyzed. This peak was followed by a slight reduction to $14.93 billion in 2019, indicating a partial deleveraging but maintaining a relatively high debt position compared to earlier years.
Stockholders’ Equity: Stockholders’ equity experienced a downward trajectory between 2014 and 2017, decreasing from approximately $6.53 billion to around $4.33 billion. This decline suggests a reduction in the net value attributable to shareholders during this period. However, equity started to recover in 2018, increasing notably to $6.14 billion, and continued to grow in 2019, reaching about $7.05 billion. The recovery indicates a strengthening of the company’s equity base in the latter years analyzed.
Invested Capital: Invested capital exhibited relative stability from 2014 to 2017, ranging between approximately $18.4 billion and $19.4 billion. In 2018 there was a marked increase to roughly $27.61 billion, which was sustained in 2019 with a slight decrease to $27.38 billion. This sharp increase in invested capital parallels the rise in total reported debt and leases during the same period, suggesting significant capital allocation or asset acquisition financed largely through debt.
Overall Analysis: The financial data indicates that the company increased its leverage significantly in 2018 and maintained a higher debt load in 2019 relative to the earlier years. This period also coincides with a substantial jump in invested capital, signaling possibly intensified investment activity or expansion. Meanwhile, stockholders’ equity contracted from 2014 through 2017 but recovered afterward, possibly reflecting improved profitability or capital injections. The trends suggest a strategic phase of investment funded by increased debt, with signs of balance sheet strengthening towards the end of the period.

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General Mills Inc., cost of capital calculations

May 26, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	31,614,919)	31,614,919)	÷	46,793,759)	=	0.68	0.68	×	14.87%	=	10.05%
Debt³	14,741,500)	14,741,500)	÷	46,793,759)	=	0.32	0.32	×	3.34% × (1 – 21.00%)	=	0.83%
Operating lease liability⁴	437,340)	437,340)	÷	46,793,759)	=	0.01	0.01	×	3.34% × (1 – 21.00%)	=	0.02%
Total:	46,793,759)					1.00					10.90%

Based on: 10-K (reporting date: 2019-05-26).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

May 27, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	26,262,461)	26,262,461)	÷	42,483,443)	=	0.62	0.62	×	14.87%	=	9.19%
Debt³	15,719,500)	15,719,500)	÷	42,483,443)	=	0.37	0.37	×	3.57% × (1 – 29.40%)	=	0.93%
Operating lease liability⁴	501,482)	501,482)	÷	42,483,443)	=	0.01	0.01	×	3.57% × (1 – 29.40%)	=	0.03%
Total:	42,483,443)					1.00					10.15%

Based on: 10-K (reporting date: 2018-05-27).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

May 28, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	31,723,169)	31,723,169)	÷	41,956,879)	=	0.76	0.76	×	14.87%	=	11.24%
Debt³	9,781,100)	9,781,100)	÷	41,956,879)	=	0.23	0.23	×	3.21% × (1 – 35.00%)	=	0.49%
Operating lease liability⁴	452,610)	452,610)	÷	41,956,879)	=	0.01	0.01	×	3.21% × (1 – 35.00%)	=	0.02%
Total:	41,956,879)					1.00					11.75%

Based on: 10-K (reporting date: 2017-05-28).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

May 29, 2016

	Capital (fair value)¹	Weights					Cost of capital
Equity²	42,579,531)	42,579,531)	÷	51,834,677)	=	0.82	0.82	×	14.87%	=	12.21%
Debt³	8,898,800)	8,898,800)	÷	51,834,677)	=	0.17	0.17	×	3.83% × (1 – 35.00%)	=	0.43%
Operating lease liability⁴	356,346)	356,346)	÷	51,834,677)	=	0.01	0.01	×	3.83% × (1 – 35.00%)	=	0.02%
Total:	51,834,677)					1.00					12.66%

Based on: 10-K (reporting date: 2016-05-29).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

May 31, 2015

	Capital (fair value)¹	Weights					Cost of capital
Equity²	33,882,568)	33,882,568)	÷	43,852,795)	=	0.77	0.77	×	14.87%	=	11.49%
Debt³	9,612,400)	9,612,400)	÷	43,852,795)	=	0.22	0.22	×	3.54% × (1 – 35.00%)	=	0.50%
Operating lease liability⁴	357,828)	357,828)	÷	43,852,795)	=	0.01	0.01	×	3.54% × (1 – 35.00%)	=	0.02%
Total:	43,852,795)					1.00					12.01%

Based on: 10-K (reporting date: 2015-05-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

May 25, 2014

	Capital (fair value)¹	Weights					Cost of capital
Equity²	32,493,574)	32,493,574)	÷	42,134,409)	=	0.77	0.77	×	14.87%	=	11.47%
Debt³	9,300,300)	9,300,300)	÷	42,134,409)	=	0.22	0.22	×	3.96% × (1 – 35.00%)	=	0.57%
Operating lease liability⁴	340,535)	340,535)	÷	42,134,409)	=	0.01	0.01	×	3.96% × (1 – 35.00%)	=	0.02%
Total:	42,134,409)					1.00					12.06%

Based on: 10-K (reporting date: 2014-05-25).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

General Mills Inc., economic spread ratio calculation, comparison to benchmarks

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
Selected Financial Data (US$ in thousands)
Economic profit¹	(711,044)	(882,719)	(151,667)	(300,187)	(694,256)	(114,887)
Invested capital²	27,385,340)	27,608,082)	18,984,610)	18,400,346)	19,241,428)	19,362,635)
Performance Ratio
Economic spread ratio³	-2.60%	-3.20%	-0.80%	-1.63%	-3.61%	-0.59%
Benchmarks
Economic Spread Ratio, Competitors⁴
Coca-Cola Co.	—	—	—	—	—	—
Mondelēz International Inc.	—	—	—	—	—	—
PepsiCo Inc.	—	—	—	—	—	—
Philip Morris International Inc.	—	—	—	—	—	—

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).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2019 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -711,044 ÷ 27,385,340 = -2.60%

⁴ Click competitor name to see calculations.

The analysis of economic performance from May 2014 to May 2019 reveals a consistent inability to generate positive economic profit, with the economic spread ratio remaining negative throughout the entire six-year period. This indicates that the returns on invested capital were insufficient to cover the company's cost of capital, resulting in a continuous destruction of shareholder value.

Economic Profit Trends: Economic profit remained negative across all observed years, characterized by significant volatility. A sharp decline occurred in 2015, with losses reaching 694.26 million USD. While a recovery trend was observed between 2016 and 2017—where losses narrowed to 151.67 million USD—this progress was reversed in 2018, marking the period's lowest point at 882.72 million USD in economic losses. By 2019, losses slightly improved to 711.04 million USD.
Invested Capital Fluctuations: Invested capital remained relatively stable between 2014 and 2017, fluctuating within a range of 18.40 billion USD to 19.36 billion USD. However, a substantial increase in capital investment occurred in 2018, where invested capital rose to 27.61 billion USD. This capital base remained largely consistent into 2019, ending at 27.39 billion USD.
Economic Spread Ratio Analysis: The economic spread ratio mirrors the volatility of the economic profit, remaining in negative territory throughout the period. The ratio reached a significant low of -3.61% in 2015, followed by a period of improvement that peaked at -0.80% in 2017. The substantial increase in invested capital in 2018 coincided with a deterioration of the spread ratio to -3.20%, which slightly recovered to -2.60% in 2019. The persistent negative spread suggests a structural challenge in achieving returns that exceed the weighted average cost of capital.

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General Mills Inc., economic profit margin calculation, comparison to benchmarks

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
Selected Financial Data (US$ in thousands)
Economic profit¹	(711,044)	(882,719)	(151,667)	(300,187)	(694,256)	(114,887)
Net sales	16,865,200)	15,740,400)	15,619,800)	16,563,100)	17,630,300)	17,909,600)
Performance Ratio
Economic profit margin²	-4.22%	-5.61%	-0.97%	-1.81%	-3.94%	-0.64%
Benchmarks
Economic Profit Margin, Competitors³
Coca-Cola Co.	—	—	—	—	—	—
Mondelēz International Inc.	—	—	—	—	—	—
PepsiCo Inc.	—	—	—	—	—	—
Philip Morris International Inc.	—	—	—	—	—	—

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).

¹ Economic profit. See details »

² 2019 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × -711,044 ÷ 16,865,200 = -4.22%

³ Click competitor name to see calculations.

The financial performance from 2014 to 2019 is characterized by a persistent inability to generate positive economic profit, indicating that the returns on invested capital consistently fell below the company's cost of capital. Throughout the analyzed period, the economic profit remained negative, with significant volatility in the magnitude of the deficit.

Economic Profit Trends: Economic profit exhibited substantial fluctuations, starting at -114,887 thousand US dollars in 2014 and dropping sharply to -694,256 thousand US dollars in 2015. Although a recovery trend was observed between 2016 and 2017, with the deficit narrowing to -151,667 thousand US dollars, this progress was reversed in 2018. The 2018 fiscal year marked the lowest point in the period, with economic profit falling to -882,719 thousand US dollars, followed by a partial recovery to -711,044 thousand US dollars in 2019.
Net Sales Performance: Net sales experienced a general downward trajectory from 2014 to 2017, declining from 17,909,600 thousand US dollars to a period low of 15,619,800 thousand US dollars. A reversal occurred after 2017, with sales increasing to 16,865,200 thousand US dollars by 2019, suggesting a recovery in top-line revenue toward the end of the observed timeframe.
Economic Profit Margin Analysis: The economic profit margin remained negative for all six years, mirroring the trends in absolute economic profit. The margin deteriorated from -0.64% in 2014 to -3.94% in 2015, improved to -0.97% by 2017, and then sharply declined to a peak deficit of -5.61% in 2018. By 2019, the margin slightly improved to -4.22%. The divergence between the improving net sales from 2017 to 2019 and the deeply negative economic profit margins suggests that revenue growth during this phase was not sufficient to offset the cost of capital or improve the underlying economic value generation.

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General Mills Inc. (NYSE:GIS)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin