The General Mills 2002 Annual Report is reproduced in Appendix B at the end of the text.

Required

A. Answer the following questions about the General Mills Consolidated Statements of Earnings:

1. General Mills recorded sales of almost $8 billion. Is this the amount of cash collected? Explain.

2. Sales increased each year from 2000 to 2002. Compute the percentage increase for each year.

3. What is the largest expense for General Mills? Compute this expense as a percentage of sales for each of the three years. Is there a trend?

4. Compare the net income figures for three years. What do you observe?

5. Explain why a company's stock price generally is influenced by the amount of net income.

6. General Mills paid dividends in 2002, 2001, and in 2000, yet the corresponding total dividend payments do not appear as expenses on the income statement. Why not?

B. Answer the following questions about the General Mills Consolidated Balance Sheets:

1. Why does a company have assets?

2. What is the total amount of assets at the end of 2002?

3. For 2002, compare the assets at the beginning of the year to the assets at the end of the year.

a. Compute the percentage increase in assets during the year.

b. Which type of assets account for most of the increase?

4. What two groups have contributed assets to General Mills and have claims on the company's assets?

C. Answer the following questions about the General Mills Consolidated Statement of Stockholders' Equity:

1. General Mill's total stockholders' equity has increased significantly from May 27, 2001 to May 26, 2002. What is the major cause of the increase in stockholders' equity?

2. The consolidated statement of stockholders' equity identifies comprehensive income. Briefly explain the concept of comprehensive income. What kinds of activities are included in comprehensive income?