The Nature Of Kellogg 's Company Essay examples

1807 Words Jun 9th, 2016 null Page
Balance Sheet Analysis
The nature of Kellogg’s Company is that it is a very stable company, as it is a big multinational food company. This explains why the changes in percentage of assets are within 1%, with a few in 3% and 5%. Looking at the vertical analysis, one of the largest changes is treasury stock (common). Treasury stock has increased by 6%, which may be due to the fact that the company is repurchasing shares, as shown by the statement of equity where common stock repurchases has increased by $187 million. The increase in treasury stock can have many possible reasons. Firstly, the company is providing stock options for its employees. Secondly, it can be used to create extra cash when needed. Another possible reason can be that the company is improving its financial ratios such as EPS or P/E, given that both their ratios have increased over the years. Kellogg’s retained earnings has increased by 6%. This is a good sign, considering that an increase in retained earnings indicates that the company is staying consistently profitable even after paying out its dividends. The last significant change is long term debt. Looking at the vertical analysis, long term debt has migrated to current liabilities, as evidenced by the 8% increase in total current liabilities and
5% decrease in long term debt. One explanation could possibly be that the company is experiencing a slow down in its growth and operations, since revenue has decreased over the years. As a result, large amount…

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