General Mills Inc. (NYSE:GIS)

The financial data over the analyzed periods reveal several notable trends in asset utilization, liquidity, leverage, profitability, and returns.

Asset Turnover

Both reported and adjusted total asset turnover ratios exhibit a declining trend from 2014 through 2018, dropping from approximately 0.77 to around 0.50-0.51. There is a slight recovery in 2019, increasing to about 0.55-0.56. This pattern suggests a reduction in the efficiency of using assets to generate sales over the majority of the period, with a modest improvement towards the end.

Liquidity Ratios

The reported and adjusted current ratios show a gradual decrease across the years, starting at approximately 0.81 and 0.84 respectively in 2014 and decreasing to lows near 0.56 and 0.60 in 2018, followed by a minor recovery in 2019 (reported at 0.59 and adjusted at 0.63). Liquidity appears to have weakened, indicating potentially tighter short-term financial flexibility, though the slight rebound could suggest initial steps toward normalization.

Leverage Ratios

Reported debt to equity increased substantially from 1.34 in 2014 to a peak of 2.58 in 2018, before decreasing to 2.05 in 2019. Adjusted debt to equity shows a similar pattern, growing from 0.93 to 1.70 by 2018 and then declining to 1.46. Debt to capital ratios also rose from around 0.57 to 0.72 (reported) and 0.48 to 0.63 (adjusted) over the same period, before slightly dipping in 2019. These trends indicate increasing financial leverage and reliance on debt financing up to 2018, with some deleveraging occurring afterward.

Financial Leverage

The reported financial leverage ratio trends upward from 3.54 in 2014 to a high near 5.04 in 2017 and remains elevated through 2018 before falling to 4.27 in 2019. Adjusted financial leverage rises steadily from 2.41 to 3.27 by 2018, then edges down to 3.01. This increase implies a growing use of debt relative to equity to finance asset growth over most of the period, with marginal reduction towards the end.

Profitability Margins

The reported net profit margin shows variability, with a decline from 10.19% in 2014 to 6.93% in 2015, recovering to peak at 13.54% in 2018, before dropping to 10.39% in 2019. Adjusted net profit margin presents a more volatile picture, swinging from a high of 13.26% in 2014 to a slightly negative value in 2015, then returning to positive territory with peaks above 14% in 2017 before tapering off. These fluctuations suggest variable profitability, possibly influenced by extraordinary items or operational adjustments.

Returns on Equity and Assets

Reported return on equity (ROE) rises from 27.92% in 2014 to a peak of 38.3% in 2017, followed by a decline to about 24.85% in 2019. Adjusted ROE exhibits greater volatility, with a negative value in 2015, then recovery to 29.08% in 2017 before falling to 15.33% by 2019. Return on assets (ROA) follows a similar trajectory, peaking in 2016-2017 and subsequently decreasing. The data indicate that although the company achieved strong equity and asset returns mid-period, these declined noticeably towards the end of the timeframe, reflecting challenges in maintaining profitability relative to asset and equity bases.

Overall, the company experienced increasing leverage and diminishing asset efficiency in the earlier years, along with fluctuating profitability metrics. While some improvements in liquidity and asset turnover appeared in the most recent year, profitability and returns declined from their mid-period highs, indicating a potential need to address operational effectiveness and capital structure optimization going forward.

Net Sales

Over the six-year period, net sales exhibited an overall declining trend from 17,909,600 thousand US dollars in 2014 to 15,619,800 thousand US dollars in 2017, representing a decline of approximately 12.8%. After reaching this low point, net sales showed a moderate recovery, increasing to 16,865,200 thousand US dollars by 2019, but still remaining below the 2014 level. This trend indicates some volatility with a downward pressure in the earlier years followed by partial rebound.

Total Assets

Total assets displayed a relatively stable trend with minor fluctuations from 23,145,700 thousand US dollars in 2014 to approximately 21,712,300 thousand US dollars in 2016 and 2017. However, there was a notable surge beginning in 2018, with total assets increasing significantly to 30,624,000 thousand US dollars and remaining at a similar level in 2019 at 30,111,200 thousand US dollars. This sharp increase suggests major asset acquisitions or revaluation occurring in 2018 or change in asset strategy.

Reported Total Asset Turnover

The reported total asset turnover ratio steadily declined over most of the period, starting at 0.77 in 2014 and dropping to its lowest level of 0.51 in 2018. In 2019, there was a slight improvement to 0.56. This ratio trend indicates that the company's efficiency in generating sales from its assets weakened significantly by 2018, reflecting the large asset base increase which did not correspond proportionally to sales growth, before showing a modest recovery.

Adjusted Total Assets

Adjusted total assets mirrored the trend of reported total assets with a similar pattern of relative stability initially followed by a pronounced increase starting in 2018. The value increased from 23,650,035 thousand US dollars in 2014 to 31,367,082 thousand US dollars in 2018 and slightly decreased to 30,790,840 thousand US dollars in 2019. The adjusted figures support the observation of significant asset base growth in the latter years, possibly reflecting adjustments for factors such as asset revaluation or accounting changes.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio demonstrated a comparable pattern to the reported turnover, with a gradual decrease from 0.76 in 2014 to 0.5 in 2018, followed by a slight increase to 0.55 in 2019. This pattern reinforces the conclusion that despite asset growth, asset utilization efficiency in sales generation has declined over the period, with some signs of improvement in the final year analyzed.

The financial data over the six-year period reveals distinct trends in the liquidity position as represented by current assets, current liabilities, and the resulting current ratios, both reported and adjusted.

Current Assets

Current assets show an initial decline from 4,393,500 US$ thousands in 2014 to 3,785,700 US$ thousands in 2015, followed by a gradual recovery in the subsequent years, reaching 4,186,500 US$ thousands by 2019. This suggests some volatility with a general trend toward stabilization and slight growth in liquidity resources available in the short term.

Current Liabilities

Current liabilities decreased from 5,423,500 US$ thousands in 2014 to 4,890,100 US$ thousands in 2015 and then began a rising trend, climbing to 7,341,900 US$ thousands in 2018 before slightly decreasing to 7,087,100 US$ thousands in 2019. The increase in liabilities after 2015 indicates growing short-term obligations, peaking notably in 2018, which may imply increased operational expenditures or changes in creditor terms.

Reported Current Ratio

The reported current ratio consistently remained below 1.0, indicating that current liabilities exceeded current assets through all periods. There is a downward trend from 0.81 in 2014 to 0.56 in 2018, with a minor improvement to 0.59 in 2019. This decline reflects a weakening short-term liquidity position over time, raising concerns about the ability to cover short-term liabilities solely with current assets.

Adjusted Current Assets and Liabilities

Adjusted values present a similar pattern to the reported figures but with slightly higher asset values and lower liability values across all years, suggesting some reclassification or valuation adjustments that improve the liquidity perspective marginally.

Adjusted Current Ratio

The adjusted current ratio shows a pattern closely mirroring the reported ratio but at somewhat more favorable levels, starting at 0.84 in 2014, peaking at 0.85 in 2016, then declining to 0.60 in 2018 and rising slightly to 0.63 in 2019. Despite being higher than the reported ratios, the adjusted ratios remain below 1.0, indicating continued short-term liquidity constraints even after adjustments.

Overall, the analysis indicates that while there was some recovery in current assets after an initial decline, the increasing current liabilities have exerted downward pressure on the company’s liquidity ratios. Both reported and adjusted current ratios being below unity throughout the period denote a persistent liquidity challenge. The slight improvement observed in 2019 suggests a possible stabilization, although the ratios remain at levels that warrant ongoing monitoring and possibly liquidity management actions.

Total Debt

The total debt exhibited a fluctuating trend over the analyzed period. Beginning at approximately $8.79 billion in 2014, it experienced a moderate increase in 2015, followed by a decline in 2016. Subsequently, total debt rose sharply, peaking around $15.82 billion in 2018 before slightly decreasing to about $14.49 billion in 2019. This pattern indicates a notable increase in leverage toward the latter years.

Stockholders’ Equity

Stockholders’ equity demonstrated a declining trend from 2014 to 2017, dropping from $6.53 billion to $4.33 billion. After 2017, equity values rebounded, rising to $6.14 billion in 2018 and further to $7.05 billion in 2019. This suggests a recovery phase in the company's equity base following a period of contraction.

Reported Debt to Equity Ratio

The reported debt to equity ratio increased steadily between 2014 and 2018, moving from 1.34 to 2.58, indicating increasing financial leverage and potential risk. In 2019, this ratio decreased somewhat to 2.05, reflecting a partial reduction in leverage relative to equity.

Adjusted Total Debt

Adjusted total debt parallels the trend of reported total debt but at slightly higher absolute values. Starting at $9.13 billion in 2014, it followed a similar trajectory by peaking in 2018 at approximately $16.32 billion, then declining to about $14.93 billion in 2019. This confirms the pattern of elevated debt in the later years.

Adjusted Total Equity

Adjusted total equity mirrors the stockholders’ equity trend but with consistently higher figures. It decreased from $9.82 billion in 2014 to $7.63 billion in 2017, and then increased through 2018 and 2019 to reach about $10.23 billion. This reflects an initial contraction followed by recovery of the company's equity considering adjustments.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio escalated from 0.93 in 2014 to 1.70 in 2018, indicating an increase in leverage though at lower levels than the reported ratio suggests. This ratio decreased to 1.46 in 2019, again confirming a slight deleveraging. The adjusted ratio's lower absolute values compared to the reported counterpart suggest differences in calculation methods or adjustments made to debt and equity components.

Overall Insights

The financial data reveals a period of increased leverage from 2014 through 2018, as evidenced by rising debt levels and higher debt to equity ratios. The peak leverage in 2018 corresponds to the highest observed debt figures. Both reported and adjusted equity declined during the initial years and then improved in the final two years, contributing to a partial easing of financial leverage in 2019. The variations between reported and adjusted figures highlight the importance of considering adjustments in assessing financial health. The company appears to have undergone significant capital structure changes, marked by increased borrowing followed by efforts to strengthen equity and reduce leverage.

Total Debt

The total debt exhibited fluctuations over the reported periods. Beginning at approximately $8.79 billion in 2014, the debt rose to a peak of around $9.22 billion in 2015, then decreased to about $8.43 billion in 2016. Subsequently, it increased again, reaching a high of approximately $15.82 billion in 2018 before slightly declining to $14.49 billion in 2019. Overall, a notable upward trend is seen with a significant increase between 2017 and 2018.

Total Capital

Total capital showed a declining trend from 2014 ($15.32 billion) to 2016 ($13.36 billion), followed by a moderate recovery in 2017 ($13.81 billion). A sharp increase occurred in 2018, peaking at $21.96 billion, and maintained a similar level in 2019 at $21.54 billion. This pattern suggests a considerable expansion in capital during the latter years of the period under review.

Reported Debt to Capital Ratio

The reported debt to capital ratio generally increased from 0.57 in 2014 to a peak of 0.72 in 2018, indicating a growing proportion of debt in the capital structure. It slightly decreased to 0.67 in 2019. This upward movement implies increasing leverage, particularly marked in 2018.

Adjusted Total Debt

Adjusted total debt follows a similar trajectory to reported total debt, starting at $9.13 billion in 2014 and increasing to about $9.58 billion in 2015. It then declined to $8.79 billion in 2016, followed by a rise reaching approximately $16.32 billion in 2018, before decreasing to $14.93 billion in 2019. This pattern confirms the increasing debt load especially in the later years.

Adjusted Total Capital

Adjusted total capital decreased steadily from $18.95 billion in 2014 to $16.67 billion in 2016, then showed recovery to $17.57 billion in 2017. A substantial increase occurred in 2018, reaching $25.90 billion, with a slight decline to $25.16 billion in 2019. This indicates enhanced capital base adjustments corresponding to the expanded scale of operations or financing activities.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio increased from 0.48 in 2014 to 0.63 in 2018, reflecting a higher leverage level over time. It then slightly decreased to 0.59 in 2019. The ratio trend corresponds with increases in adjusted debt and capital, confirming a more leveraged financial position in the latter periods.

Summary Insights

Overall, both reported and adjusted figures indicate a trend of increasing leverage from 2014 through 2018, peaking in 2018 before a marginal reduction in 2019. The company's total capital, after a period of decline, substantially increased starting in 2017, suggesting new capital inflows or valuation adjustments. The significant rise in both total debt and capital in 2018 points to a possible strategic expansion or acquisition activity. Despite the higher leverage, the company's capital base also grew, potentially mitigating some financial risk associated with the increased indebtedness.

The financial data reveals several discernible trends over the six-year period under review. Total assets demonstrated relative stability between 2014 and 2017, with values fluctuating slightly around the 21.7 to 23.1 billion USD range. A significant increase occurred in 2018, when total assets surged to over 30.6 billion USD, before slightly decreasing in 2019 to approximately 30.1 billion USD. This indicates a notable expansion in asset base during the later years.

Stockholders’ equity presents a somewhat different pattern. From 2014 through 2017, equity consistently declined year-over-year, dropping from approximately 6.53 billion USD to 4.33 billion USD. However, this trend reversed in 2018, with equity rising sharply to over 6.14 billion USD, followed by a further increase in 2019 to approximately 7.05 billion USD, suggesting strengthening of the company's net asset base after several years of contraction.

Examining the reported financial leverage ratios, a general upward trend is observed from 3.54 in 2014 to a peak of 5.04 in 2017, followed by a gradual decline to 4.27 in 2019. This indicates increased reliance on debt financing relative to equity up to 2017, with some deleveraging or equity strengthening thereafter.

Adjusted total assets and adjusted total equity, which likely account for certain valuation or accounting adjustments, follow similar trajectories as their unadjusted counterparts but with slightly higher absolute values. Adjusted total assets remained stable initially before jumping from approximately 22.5 billion USD in 2017 to over 31.3 billion USD in 2018, and then slightly receding in 2019. Adjusted total equity declined from 9.82 billion USD in 2014 to 7.63 billion USD in 2017, before rebounding to over 10.2 billion USD in 2019.

The adjusted financial leverage mirrors the reported leverage trends but at lower numerical values, starting at 2.41 in 2014 and rising steadily to 3.27 in 2018, then falling slightly to 3.01 in 2019. This progression signifies a moderate increase in leverage when factoring in adjustments, with a modest reduction in the latest period.

Overall, the data indicates that after a period of relative stability and declining equity, significant asset growth occurred in 2018, accompanied by a recovery in equity levels. Leverage ratios increased during much of the timeframe, highlighting enhanced use of debt until 2017 or 2018, followed by a trend toward lowering leverage or improved equity financing in the most recent year analyzed.

Total Assets

Stable between 2014-2017; sharp increase in 2018; slight decrease in 2019.

Stockholders' Equity

Decline from 2014 to 2017; strong recovery in 2018 and 2019.

Reported Financial Leverage

Progressively increased to 2017 peak; declined thereafter but remained elevated.

Adjusted Total Assets and Equity

Similar patterns to reported figures, with values consistently higher due to adjustments.

Adjusted Financial Leverage

Incremental increase until 2018; minor reduction in 2019, indicating moderated leverage.

The financial data over the six-year period reveals considerable fluctuations in profitability and sales performance. Net earnings attributable show variability, beginning at approximately $1.82 billion in 2014, declining significantly to around $1.22 billion in 2015, then recovering to $1.70 billion in 2016. After a slight dip in 2017, earnings peaked at $2.13 billion in 2018 before decreasing again to roughly $1.75 billion in 2019.

Net sales exhibit a decreasing trend from 2014 through 2017, starting at about $17.91 billion and falling steadily to approximately $15.62 billion. In 2018, sales stabilize marginally before increasing to $16.87 billion in 2019, suggesting a partial recovery after several years of decline.

The reported net profit margin follows a pattern somewhat aligned with net earnings, showing a marked decline from 10.19% in 2014 to 6.93% in 2015. This is followed by a recovery and gradual improvement to a peak of 13.54% in 2018, before declining again to 10.39% in 2019. This indicates volatility in profitability relative to sales over the observed period.

Adjusted net earnings present a more erratic profile, with a notable negative figure in 2015 of approximately -$28,800 thousand, contrasting sharply against positive values in other years. Adjusted earnings peak in 2017 at about $2.22 billion, before diminishing in subsequent years. The associated adjusted net profit margin mirrors this inconsistency, moving from a positive 13.26% in 2014 to a negative margin in 2015, followed by a rebound in 2017 and a decline through 2019.

Overall, the data depicts fluctuations in both earnings and margins, with 2015 standing out as an anomalous year with significant negative adjustment impacts. While net sales generally declined initially, there is evidence of recovery by 2019. Profit margins appear sensitive to these changes, demonstrating variability but maintaining a generally positive range outside of the exception in 2015.

Net Earnings

Fluctuated between $1.22 billion and $2.13 billion, with a notable dip in 2015 and peak in 2018.

Net Sales

Decreased consistently from 2014 to 2017, then increased modestly by 2019.

Reported Net Profit Margin

Presented volatility but remained positive, peaking in 2018 and declining thereafter.

Adjusted Net Earnings

Varied widely with one negative outlier in 2015, peaking in 2017 before declining.

Adjusted Net Profit Margin

Reflected adjusted earnings trends, including the negative margin in 2015, and declined after 2017.

The financial data reveals several noteworthy trends over the six-year period. Net earnings attributable to General Mills exhibit fluctuations without a clear upward or downward trajectory. After a peak in 2014 at approximately 1.82 billion US dollars, net earnings decreased significantly in 2015 to 1.22 billion, then recovered in 2016 and 2017 to around 1.69 billion and 1.66 billion respectively. A further increase was observed in 2018, reaching the highest point in the period at about 2.13 billion, followed by a decline again to roughly 1.75 billion in 2019.

Stockholders’ equity shows more variability with a general declining trend from 2014 to 2017, dropping from about 6.53 billion US dollars to 4.33 billion. However, there was a noticeable recovery in 2018 and 2019, reaching levels exceeding 7 billion US dollars by 2019, suggesting improvements in the company’s capital base towards the end of the period.

The reported return on equity (ROE) percentages indicate a generally strong but volatile profitability relative to equity. Starting at 27.92% in 2014, ROE declined to 24.44% in 2015, then surged notably to reach a peak of 38.3% in 2017. There was a slight decrease in 2018 to 34.7%, followed by a more significant drop to 24.85% in 2019. This pattern corresponds closely with net earnings and equity changes.

Adjusted net earnings, which include earnings attributable to redeemable and noncontrolling interests, vary significantly and include a negative figure in 2015 (-28.8 million US dollars), indicating an extraordinary loss or adjustment in that year. Apart from 2015, adjusted earnings remain positive but show a decline from 2017 onwards, decreasing from 2.22 billion in 2017 to 1.57 billion in 2019.

Adjusted total equity demonstrates a downward trend from 2014 (approximately 9.82 billion) to 2017 (7.63 billion), followed by a recovery to over 10 billion US dollars in 2019. This movement is consistent with the stockholders’ equity pattern but reflects a broader equity measure including adjustments.

The adjusted ROE presents large fluctuations and a notably negative return in 2015 (-0.36%), in line with the negative adjusted earnings. From this low point, adjusted ROE improves to 29.08% in 2017 but declines steadily afterward, reaching 15.33% in 2019. This suggests that the company’s adjusted profitability relative to equity weakened in the latter years compared to the middle of the period.

Overall, the data portrays a company experiencing volatility in profitability and equity over the analyzed years, with certain years of recovery following periods of decline. The divergence between reported and adjusted figures, particularly in 2015, highlights the impact of accounting and operational adjustments on financial performance. Toward the end of the period, both reported and adjusted equity metrics improve, though profitability measures suggest some challenges in maintaining return levels seen earlier.

The analysis of the financial data reveals several key trends over the six-year period from 2014 to 2019.

Net Earnings Attributable

Net earnings attributable to General Mills showed fluctuations throughout the period. Beginning at approximately $1.82 billion in 2014, there was a significant decrease in 2015 to about $1.22 billion. Earnings recovered noticeably in 2016 to nearly $1.7 billion, followed by a slight decline in 2017. The highest earnings were recorded in 2018, reaching over $2.13 billion, before declining again to $1.75 billion in 2019.

Total Assets

Total assets remained relatively stable from 2014 through 2017, fluctuating modestly between roughly $21.7 billion and $23.1 billion. However, in 2018, total assets increased markedly to over $30.6 billion, maintaining a similar level in 2019 just above $30.1 billion. This sharp increase suggests a significant asset acquisition or revaluation during that period.

Reported Return on Assets (ROA)

The reported ROA began at 7.88% in 2014, saw a decline to 5.56% in 2015, and improved back near previous levels in 2016 and 2017 (around 7.6-7.8%). The ratio then declined steadily in 2018 and 2019 to 6.96% and 5.82%, respectively. The declining trend in the final years indicates decreasing efficiency in generating net earnings from the existing asset base despite the increase in asset size.

Adjusted Net Earnings

Adjusted net earnings exhibited more volatility than net earnings attributable. After a strong 2014 figure ($2.38 billion), a drastic negative adjustment occurred in 2015, resulting in a loss of $28.8 million. Subsequent years showed recovery with fluctuating but positive adjusted net earnings, peaking in 2017 at approximately $2.22 billion and then declining in 2018 and 2019.

Adjusted Total Assets

Adjusted total assets closely mirror the reported total assets, showing relative stability from 2014 through 2017 and a substantial jump in 2018 to about $31.37 billion, maintaining a similar level in 2019 ($30.79 billion). This reinforces the observation of a major asset growth event in 2018.

Adjusted Return on Assets (Adjusted ROA)

The adjusted ROA started quite high in 2014 at 10.04%, before plummeting to a slightly negative figure in 2015 (-0.13%). It rebounded in 2016 and 2017 to 6.83% and 9.87%, respectively, indicating improved profitability relative to adjusted assets. However, similar to the reported ROA, adjusted ROA declined in the last two years to 5.96% in 2018 and 5.09% in 2019, suggesting reduced asset utilization effectiveness after the asset expansion.

Overall, the data indicates a period of considerable asset base growth beginning in 2018, accompanied by increased net earnings in the same year. However, the efficiency ratios, both reported and adjusted ROA, reveal a downward trend post-2017, implying that the expanded asset base has not yet translated into proportional increases in profitability. The volatility in adjusted net earnings, particularly the notable negative adjustment in 2015, warrants further investigation into the underlying factors contributing to such fluctuations.