What components of stockholders equity do

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Review the financial statements we used in the first module to learn additional information (General Mills and Meiji holding). The emphasis of this Case is to review the income statement, balance sheet, and computation of ratios.

Review the financial statements for the companies and answer the following questions for the last reporting year. If no information is available, state that to be the case:

Balance Sheet

  • What components of stockholders' equity do each of the companies disclose?
  • Do the companies have preferred stock shares outstanding? If so, what special features do these shares contain?
  • Do either of the companies report treasury shares? If so, do the companies disclose the reason for reacquiring the shares?

IncomeStatement

  • What are the basic and diluted earnings per share for each company?
  • Have the companies reported any discontinued operations?
  • Do the companies disclose any stock compensation plans? If so, are they reporting such plans under the fair value or intrinsic value methods? What was the value of compensation expense measured for any outstanding stock option plans?

Financial Ratios

Compute the following ratios. Also, interpret and assess each group of ratios for the company. What type of story are the ratios telling the analyst?

  • Profitability ratios:
    • Grossprofitmargin
    • Net profitmargin
    • Returnonstockholders' equity
  • Liquidity ratios:
    • Current ratio
    • Quick ratio
    • Inventoryturnover
  • Leverage ratios:
    • Debt-to-assets
    • Debt-to-equity
    • Times-covered ratio

What type of information do you find in footnotes to the financial statements?

Do you find the balance sheet, income statement or other measures such as ratios the most informative? Comment on the advantages and disadvantages of using ratios for analysis.

Reference no: EM13667369

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