Stock Analysis on Net

General Mills Inc. (NYSE:GIS)

$22.49

This company has been moved to the archive! The financial data has not been updated since December 18, 2019.

Enterprise Value to FCFF (EV/FCFF)

Microsoft Excel

Paying user area


We accept:

Visa Mastercard American Express Maestro Discover JCB PayPal Apple Pay Google Pay
Visa Secure Mastercard Identity Check American Express SafeKey

Free Cash Flow to The Firm (FCFF)

General Mills Inc., FCFF calculation

US$ in thousands

Microsoft Excel
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
Net earnings attributable to redeemable and noncontrolling interests
Net noncash charges
Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures
Net cash provided by operating activities
Cash interest payments, net of tax1
Capitalized interest, net of tax2
Purchases of land, buildings, and equipment
Proceeds from disposal of land, buildings, and equipment
Free cash flow to the firm (FCFF)

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 the following trends and insights regarding cash flow performance over the examined six-year period:

Net Cash Provided by Operating Activities

This metric demonstrates a generally stable pattern with some fluctuations. Starting at approximately $2.54 billion in 2014, the value remained nearly constant in 2015, followed by a slight increase to about $2.63 billion in 2016. However, in 2017, a noticeable decline occurred, bringing the figure down to roughly $2.31 billion. This dip was reversed in 2018, with a significant increase to $2.84 billion, representing the highest value recorded in the period. In 2019, the value decreased marginally to around $2.81 billion, maintaining a relatively strong cash flow from operations near the peak of the timeframe.

Free Cash Flow to the Firm (FCFF)

The free cash flow to the firm follows a somewhat parallel trend to operating cash flows but exhibits slightly greater variation. Starting at about $2.08 billion in 2014, it decreased modestly in 2015 and rose slightly in 2016. A more pronounced drop is seen in 2017, falling to approximately $1.84 billion, the lowest in the period. In contrast, 2018 experienced a strong rebound with FCFF climbing to nearly $2.42 billion, followed by a further increase to around $2.70 billion in 2019, which marks the peak value here.

Overall, the data indicates that while operating cash flows remain solid with minor year-to-year volatility, free cash flow to the firm is slightly more sensitive to changes, particularly showing a dip in 2017 and a marked recovery in the subsequent years. The improvements in 2018 and 2019 suggest enhanced cash generation capacity and potential efficiency gains or capital expenditure management improving free cash flow for the company.


Interest Paid, Net of Tax

General Mills Inc., interest paid, net of tax calculation

US$ in thousands

Microsoft Excel
12 months ended: May 26, 2019 May 27, 2018 May 28, 2017 May 29, 2016 May 31, 2015 May 25, 2014
Effective Income Tax Rate (EITR)
EITR1
Interest Paid, Net of Tax
Cash interest payments, before tax
Less: Cash interest payments, tax2
Cash interest payments, net of tax
Interest Costs Capitalized, Net of Tax
Capitalized interest, before tax
Less: Capitalized interest, tax3
Capitalized interest, net of tax

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 See details »

2 2019 Calculation
Cash interest payments, tax = Cash interest payments × EITR
= × =

3 2019 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= × =


Effective Income Tax Rate (EITR) Trend
The effective income tax rate exhibited a consistent downward trend over the six-year period. Starting at 33.3% in May 2014 and remaining steady into 2015, the rate gradually declined each subsequent year. By May 2017, the rate had decreased to 28.8%, continuing downward to 27.2% in May 2018, and sharply dropping to 18.1% by May 2019. This significant reduction in EITR may indicate improved tax efficiency or changes in tax legislation benefiting the company.
Cash Interest Payments, Net of Tax
Cash interest payments, net of tax, fluctuated moderately between 2014 and 2018, remaining within the range of approximately $192 million to $203 million. However, in the latest year ending May 2019, there was a notable increase, with cash interest payments more than doubling to approximately $410 million. This sharp rise may suggest either an increase in debt levels or higher interest rates on existing or new borrowings.
Capitalized Interest, Net of Tax
Capitalized interest showed a more variable pattern with no clear long-term trend. The values increased from approximately $3.3 million in 2014 to a peak of about $5.3 million in 2016, followed by a decline to around $2.3 million by 2019. The initial increase could reflect investments in long-term projects capitalizing interest costs, whereas the subsequent decline might indicate reduced capital expenditures or changes in project financing strategies.

Enterprise Value to FCFF Ratio, Current

General Mills Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in thousands)
Enterprise value (EV)
Free cash flow to the firm (FCFF)
Valuation Ratio
EV/FCFF
Benchmarks
EV/FCFF, Competitors1
Coca-Cola Co.
Mondelēz International Inc.
PepsiCo Inc.
Philip Morris International Inc.

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

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.


Enterprise Value to FCFF Ratio, Historical

General Mills Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
May 26, 2019 May 27, 2018 May 28, 2017 May 29, 2016 May 31, 2015 May 25, 2014
Selected Financial Data (US$ in thousands)
Enterprise value (EV)1
Free cash flow to the firm (FCFF)2
Valuation Ratio
EV/FCFF3
Benchmarks
EV/FCFF, 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 See details »

2 See details »

3 2019 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =

4 Click competitor name to see calculations.


Enterprise Value (EV)
The enterprise value demonstrated an overall increasing trend over the six-year period. It began at approximately 40.88 billion US dollars in 2014 and rose to about 45.97 billion US dollars by 2019. Notably, there was a peak in 2016 at around 50.62 billion, followed by a decline in 2017 to roughly 40.80 billion. After this decline, EV steadily increased again through 2019.
Free Cash Flow to the Firm (FCFF)
Free cash flow to the firm showed variability but generally increased over the period. Starting at approximately 2.08 billion US dollars in 2014, FCFF slightly decreased to around 1.84 billion in 2017, then experienced a significant increase reaching approximately 2.70 billion in 2019. This suggests fluctuations in operational efficiency or investment activities impacting cash generation.
EV/FCFF Ratio
The EV/FCFF ratio, representing the valuation multiple relative to cash flow, trended upwards from 19.66 in 2014 to a peak of 23.99 in 2016. Following this peak, the ratio declined consistently to 17.05 by 2019. This decreasing trend post-2016 implies an improving valuation attractiveness or enhanced cash flow generation relative to enterprise value.
Summary of Trends
The enterprise value grew overall but with fluctuations, notably a high in 2016 and a dip in 2017. Free cash flow showed variability but increased significantly toward the end of the period. The EV/FCFF ratio's rise until 2016 followed by a steady decline indicates that while the company’s market valuation fluctuated, its cash flow generation improved, potentially enhancing investor perceptions of value over time.