General Mills Inc

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GIS : NYSE : Consumer Goods
$62.42 | %
Today's Range: 61.92 - 62.72
Avg. Daily Volume: 2862000.0
01/20/17 - 4:01 PM ET

Financial Analysis


GENERAL MILLS INC's gross profit margin for the second quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Sales and net income have dropped, although the growth in revenues underperformed the average competitor within the industry, the net income growth did not. GENERAL MILLS INC has very weak liquidity. Currently, the Quick Ratio is 0.35 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity decreased from the same period a year ago, despite already having very weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 12.84% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)4112.14424.9
EBITDA ($mil)983.9954.5
EBIT ($mil)835.3805.9
Net Income ($mil)481.8529.5


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)809.7649.8
Total Assets ($mil)21602.121588.7
Total Debt ($mil)9471.38823.5
Equity ($mil)4180.64797.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin41.1539.03
EBITDA Margin23.9221.57
Operating Margin20.3118.21
Sales Turnover0.740.8
Return on Assets7.556.88
Return on Equity39.0330.97
Debt Q2 FY16 Q2 FY15
Current Ratio0.660.81
Debt/Capital0.690.65
Interest Expense75.573.8
Interest Coverage11.0610.92


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)580.2593.3
Div / share0.480.44
EPS0.80.87
Book value / share7.218.09
Institutional Own % n/a n/a
Avg Daily Volume2874238.03349109.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 36.79 for the Food Products industry and a discount compared to the S&P 500 average of 25.41. For additional comparison, its price-to-book ratio of 8.56 indicates a significant premium versus the S&P 500 average of 2.83 and a significant premium versus the industry average of 4.98. The current price-to-sales ratio is above the S&P 500 average, but below the industry average. The valuation analysis reveals that, GENERAL MILLS INC seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
GIS 23.00 Peers 36.79   GIS 14.82 Peers 18.05

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

GIS is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

GIS is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
GIS 17.87 Peers 22.23   GIS 1.93 Peers 1.97

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

GIS is trading at a discount to its peers.

 

Average. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

GIS trades at a valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
GIS 8.56 Peers 4.98   GIS 10.74 Peers 203.45

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

GIS is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, GIS is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
GIS 2.24 Peers 2.32   GIS -7.71 Peers 25.88

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

GIS is trading at a valuation on par with its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

GIS significantly trails its peers on the basis of sales growth

 

 

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