Investment Analysis and Recommendation Paper-General Mills, Inc

You will prepare the final section of your Investment Analysis and Recommendation Paper, consisting of the capital structure choices, as well as an executive summary of your research.

• You will examine the mix of debt and equity that your firm uses. After finding this information:
• Compare this to an industry average or a main competitor. What are the differences?
• Based on what you know about your selected company, do these differences seem appropriate?
• Relate your company’s capital structure choices to the appropriate capital structure theory(ies).
• Also, as a component of your executive summary, obtain the current stock price for your company and use it as an additional calculation. Based upon all of your research, would you recommend investing in this company? Justify your answer.
• Use all of the information that you have gathered in previous weeks and combine as your Investment Analysis and Recommendation Paper, which will comprise a minimum of 8–10 pages in APA format. Three to five diagrams and presentation slides may be included, but they will be additional to the required length of the paper. Include an introduction describing the company, a logical organization of the information and a concise executive summary of your findings.

Executive Summary

General Mills has a distinguished portfolio of leading food brands. Many are long-standing favorites, as appealing to consumers today as when they introduced decades ago. The operating environment for our business is ever-changing, but our brands are resilient and generate continuing growth (http://thomson.mobular.net/thomson/7/3006/4051/document_0/GIS_AR09.pdf).

General Mills is one of the largest packaged food producers in the world, with over $14 billion in sales in 2008. The firm owns some of the most recognizable brands in the grocery store, including Cheerios, Progresso Soup, Hamburger Helper and Fruit Roll-Ups. U.S. retail accounts for 68% of sales, but its international segment, helped by a joint venture with French food giant Nestle SA, is growing fast as the company now operates in 100 countries worldwide (http://www.wikinvest.com/stock/General_Mills_(GIS).

Like many other food and beverage companies, General Mills faces a market marked by increasing commodities prices. The company is a large purchaser of corn and wheat and the rise in the price of oil has hurt as well. As the costs of doing business increase, General Mills must either absorb these losses or charge higher prices at the risk of losing market share. Nonetheless, General Mills has managed to maintain its gross margin constant in the face of the 2008 Financial Crisis; it fell only slightly from 35.7 percent in 2008 to 35.6 percent in 2009. In doing so, the company has introduced new products like lower-sodium Progresso soups and Hamburger Helper singles for the microwave, while growing its reach from grocery stores into new channels like supercenters, drug and discount stores and convenience stores. It is also expanding into fast growing markets like China, Russia and Latin America.

General Mills, Inc.

Proxy Statement

The board of directors of General Mills, Inc. is soliciting proxies for use at the Annual Meeting of Stockholders. This proxy statement summarizes the information you need to know to vote at the Annual Meeting. You do not need to attend the Annual Meeting to vote your shares. We first mailed or made available the proxy materials.