Question: I need General Mills profitability analysis for 2016. I have the one for Kimberly Clark for 2010 please follow it. KIMBERLY-CLARK CORPORATION Level 1 Profitability

I need General Mills profitability analysis for 2016. I have the one for Kimberly Clark for 2010 please follow it.

KIMBERLY-CLARK CORPORATION

Level 1 Profitability Analysis

2010

ROCE = CI/Ave CSE

38.15%

ROCE before MI

38.01%

RNOA = OI/Ave NOA

22.19%

Financial Leverage drivers

NBC = NFE/Ave NFO

2.78%

Spread = RNOA - NBC

19.41%

FLEV = NFO/(CSE + MI)

0.816

Operating liability leverage drivers

Implicit interest on OL

$52.05

ROOA

14.09%

Short borrow rate after tax

0.76%

OLSPREAD

13.50%

OLLEV = OL/NOA

0.608%

Check that the leverage equations work:

ROCE before MI = RNOA + [FLEV (RNOA NBC)]

= 22.19% + [0.816 (22.19%- 2.78%)]

= 38.01%

RNOA = ROOA + OLLEV [(ROOA S/T Borrowing Rate)] = 14.09% + [0.608 (14.09% - 0.76%)]

= 22.19%

(allow for rounding error)

PROFITABILITY ANALYSIS: Level 2 and 3

(proceed to next page)

SENSITIVITY ANALYSIS

Change the inputs and see how the outputs change. If you put the numbers above into a spreadsheet, youll do this very efficiently. The web page for Chapter 12 provides an engine and, of course, BYOAP has a full spreadsheet product.

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