Compute the percentage change in sales and operating profit

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Reference no: EM131912626

Question - Kellogg Company has its headquarters in Battle Creek, Mi. The company manufactures and sells ready to eat breakfast cereals and convenience foods including cookies, toaster pastries and cereal bars.

Selected data from Kellogg Company's 2011 annual report follows (dollar amounts in millions)


2011

2010

2009

Sales

13,198.00

12,397.00

12,575.00

Gross Profit

41.28

42.66

42.87

Operating Profit

1,976.00

1,990.00

2,001.00

Net Cash flow less capital expenditures

1,001.00

534.00

1,266.00

Net Earnings

1,231.00

1,247.00

1,212.00

In its annual reports, Kellogg Company has indicated that it plans to achieve sustainability of its operating results with principles that emphasize profit-rich, sustainable sales growth, as well as cash flow and return on invested capital. Kellogg believes its steady earnings growth, strong cash flow, and continued investment during a multi-year period demonstrates the strength and flexibility of its business model.

Instructions

a. Compute the percentage change in sales, operating profit, net cash flow less capital expenditures and net earnings from year to year for the years presented.

b. Evaluate Kellogg's performance. Which trend seems most favorable? Which trend seems least favorable? What are the implications of these trends for Kellogg's sustainable performance objectives? Explain.

Reference no: EM131912626

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