Project

ProjectExample-KraftFoodsGroup2014.xlsx

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Bal Sht

Kraft Foods Group, Inc.
Consolidated Balance Sheets
(in millions of U.S. dollars)
			Common Size Analysis		Horizontal Analysis
	December 27, 2014	December 28, 2013	2014	2013	$ Change	% Change
ASSETS
Cash and cash equivalents	$ 1,293	$ 1,686	5.63%	7.28%	$ (393)	-23.31%
Receivables (net of allowances of $21 in 2014 and $26 in 2013)	1,080	1,048	4.71%	4.53%	32	3.05%
Inventories	1,775	1,616	7.74%	6.98%	159	9.84%
Deferred income taxes	384	360	1.67%	1.56%	24	6.67%
Other current assets	259	198	1.13%	0.86%	61	30.81%
Total current assets	4,791	4,908	20.88%	21.20%	(117)	-2.38%
Property, plant and equipment, net	4,192	4,115	18.27%	17.78%	77	1.87%
Goodwill	11,404	11,505	49.70%	49.70%	(101)	-0.88%
Intangible assets, net	2,234	2,229	9.74%	9.63%	5	0.22%
Other assets	326	391	1.42%	1.69%	(65)	-16.62%
TOTAL ASSETS	$ 22,947	$ 23,148	100.00%	100.00%	$ (201)	-0.87%
LIABILITIES
Current portion of long-term debt	$ 1,405	$ 4	6.12%	0.02%	$ 1,401	35025.00%
Accounts payable	1,537	1,548	6.70%	6.69%	(11)	-0.71%
Accrued marketing	511	685	2.23%	2.96%	(174)	-25.40%
Accrued employment costs	163	184	0.71%	0.79%	(21)	-11.41%
Dividends payable	324	313	1.41%	1.35%	11	3.51%
Accrued postretirement health care costs	192	197	0.84%	0.85%	(5)	-2.54%
Other current liabilities	641	479	2.79%	2.07%	162	33.82%
Total current liabilities	4,773	3,410	20.80%	14.73%	1,363	39.97%
Long-term debt	8,627	9,976	37.60%	43.10%	(1,349)	-13.52%
Deferred income taxes	340	662	1.48%	2.86%	(322)	-48.64%
Accrued pension costs	1,105	405	4.82%	1.75%	700	172.84%
Accrued postretirement health care costs	3,399	3,080	14.81%	13.31%	319	10.36%
Other liabilities	338	428	1.47%	1.85%	(90)	-21.03%
TOTAL LIABILITIES	18,582	17,961	80.98%	77.59%	621	3.46%
Commitments and Contingencies (Note 11)
EQUITY
Common stock, no par value (5,000,000 shares authorized; 601,402,816 shares issued at December 27, 2014 and 596,843,449 at December 28, 2013)	- 0	- 0	0.00%	0.00%	- 0
Additional paid-in capital	4,678	4,434	20.39%	19.16%	244	5.50%
Retained earnings	1,045	1,281	4.55%	5.53%	(236)	-18.42%
Accumulated other comprehensive losses	(562)	(499)	-2.45%	-2.16%	(63)	12.63%
Treasury stock, at cost	(796)	(29)	-3.47%	-0.13%	(767)	2644.83%
TOTAL EQUITY	4,365	5,187	19.02%	22.41%	(822)	-15.85%
TOTAL LIABILITIES AND EQUITY	22,947	23,148	100.00%	100.00%	(201)	-0.87%
[Source: 10-K, page 36]

Inc Stmt

Kraft Foods Group, Inc.
Consolidated Statements of Earnings
(in millions of U.S. dollars)
	For the Years Ended		Common Size Analysis		Horizontal Analysis
	December 27, 2014	December 28, 2013	2014	2013	$ Change	% Change
Net revenues	$ 18,205	$ 18,218	100.00%	100.00%	$ (13)	-0.07%
Cost of sales	13,360	11,395	73.39%	62.55%	1,965	17.24%
Gross profit	4,845	6,823	26.61%	37.45%	(1,978)	-28.99%
Selling, general and administrative expenses	2,956	2,124	16.24%	11.66%	832	39.17%
Asset impairment and exit costs	(1)	108	-0.01%	0.59%	(109)	-100.93%
Operating income	1,890	4,591	10.38%	25.20%	(2,701)	-58.83%
Interest and other expense, net	(484)	(501)	-2.66%	-2.75%	17	-3.39%
Royalty income from Mondelez International	- 0	- 0	0.00%	0.00%	- 0
Earnings before income taxes	1,406	4,090	7.72%	22.45%	(2,684)	-65.62%
Provision for income taxes	363	1,375	1.99%	7.55%	(1,012)	-73.60%
Net earnings	$ 1,043	$ 2,715	5.73%	14.90%	$ (1,672)	-61.58%
[Source: 10-K, page 34]

Ratio

Ratio	Formula	Calculation
Liquidity and Efficiency
Current Ratio	= Current assets / Current liabilities	1.00
Acid-test ratio	= Cash + Short-term investments + Current receivables / Current liabilities	0.50
Accounts receivable turnover	= Net sales / Average accounts receivable, net	17.11	times
Inventory turnover	= Cost of goods sold / Average inventory	7.88	times
Days' sales uncollected	= Accounts receivable, net / Net sales * 365	21.65	days
Days' sales in inventory	= Ending inventory / Cost of goods sold *365	48.49	days
Total asset turnover	= Net sales / Average total assets	0.79	times
Kraft Foods has low liquidity, with a current ratio of 1 and an acid-test ratio of 0.5, although this is in line with industry standards. Kraft Foods is also not very efficient, with inventory turnover of 7.88 times, which is well below the industry average of 11.15 times, and total asset turnover of .79 times compared to an industry average of 1.76 times.
Solvency
Debt ratio	= Total liabilities / Total assets	0.81
Equity ratio	= Total equity / Total assets	0.19
Debt-to-equity ratio	= Total liabilities / Total equity	4.26
Times interest earned	= Income before interest expense and income taxes / Interest expense	3.90	times
Kraft Foods has very high debt and debt-to-equity ratios. Times interest earned of almost four times means that there is not an immediate risk of default, but the company is very highly leveraged, which is risky for investors.
Profitability
Profit margin ratio	= Net income / Net sales	6%
Gross margin ratio	= Net sales - Cost of goods sold / Net sales	27%
Return on total assets	= Net income / Average total assets	5%
Return on common stockholders' equity	= Net income - Preferred dividends / Average common stockholders' equity	22%
Book value per common share	= Shareholders' equity applicable to common shares / Number of common shares outstanding	$ 7.43
Basic earnings per share	= Net income - Preferred dividends / Weighted-average common shares outstanding	$ 1.76		[Weighted Average shares outstanding found in 10-K, Note 14]
Kraft Foods has strong profitability. Profit margin of 6% and return on total assets of 5% are both more than double the industry averages of 3.5% and 2%. Return on equity of 22% is significantly stronger than the industry average of 7.9%.
Market Prospects
Price-earnings ratio	= Market price per common share / Earnings per share	50.14	times
Dividend yield	= Annual cash dividends per share / Market price per share	2.4%		[Dividends per share found on Income Statement]
Kraft Foods has a high P/E ratio at 50 times earnings, indicating that high growth is expected [this is likely because of the merger with Heinz that had been announced by the time Kraft Foods shares stopped trading]. A dividend yield of 2.4% is a strong return for investors interested in income.

Graph

Quarter	High	Low
Q3 2013	$ 58.76	$ 51.20
Q4 2013	$ 55.93	$ 51.72
Q1 2014	$ 56.56	$ 50.54
Q2 2014	$ 60.24	$ 55.47
Q3 2014	$ 61.10	$ 53.33
Q4 2014	$ 64.47	$ 53.63
Q1 2015	$ 90.61	$ 60.28
Q1 2015	$ 91.32	$ 82.94

KRFT Stock Price by Quarter

High Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q1 2015 58.76 55.93 56.56 60.24 61.1 64.47 90.61 91.32 Low Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q1 2015 51.2 51.72 50.54 55.47 53.33 53.63 60.28 82.94

KRFT Stock Price by Quarter