General Mills Inc. (NYSE:GIS)

Debt to Equity

The debt to equity ratio shows an overall increasing trend from 1.34 in 2014 to a peak of 2.58 in 2018, followed by a decline to 2.05 in 2019. This indicates that the company increased its reliance on debt financing relative to equity over the years, with a slight reduction in leverage towards the end of the period.

Debt to Capital

This ratio increased from 0.57 in 2014 to a high of 0.72 in 2018, demonstrating a growing proportion of debt in the company’s total capital structure. Thereafter, it decreased to 0.67 in 2019, consistent with the reduction observed in the debt to equity ratio.

Debt to Assets

The debt to assets ratio rose from 0.38 in 2014 to 0.52 in 2018, suggesting an increased use of debt relative to total assets. In 2019, the ratio decreased to 0.48, indicating a modest reduction in asset financing through debt.

Financial Leverage

Financial leverage increased steadily from 3.54 in 2014 to a peak of 5.04 in 2017, then slightly declined to 4.99 in 2018 and further to 4.27 in 2019. This suggests the company expanded its asset base funded by debt and equity, with some deleveraging in the later years.

Interest Coverage

The interest coverage ratio decreased overall from 9.62 in 2014 to 5.08 in 2019, with some fluctuations. After a dip to 6.62 in 2015, it rebounded to 8.99 in 2016 and 8.8 in 2017, followed by a continuous decline through 2019. This trend indicates progressively lower earnings available to cover interest expenses, potentially signaling increased financial risk.

Fixed Charge Coverage

Fixed charge coverage follows a similar pattern to interest coverage, declining from 6.41 in 2014 to 4.02 in 2019. There was a peak at 5.97 in 2016, but overall the company's ability to cover fixed charges from earnings appears to be weakening over the period.

Total Debt

The total debt demonstrates a fluctuating trend over the observed periods. It initially increased from 8,785,800 thousand USD in 2014 to 9,223,900 thousand USD in 2015, followed by a decrease to 8,430,900 thousand USD in 2016. Subsequently, debt rose again in 2017 to 9,481,700 thousand USD, then surged significantly in 2018 to 15,818,600 thousand USD. In 2019, total debt decreased moderately to 14,490,000 thousand USD. Overall, the trend suggests a substantial rise in debt levels particularly towards the latter years.

Stockholders’ Equity

Stockholders’ equity indicates a declining trend during the initial years, decreasing from 6,534,800 thousand USD in 2014 to 4,327,900 thousand USD in 2017. However, this negative trend reverses from 2017 onward, with equity rising to 6,141,100 thousand USD in 2018 and further to 7,054,500 thousand USD in 2019. This suggests a recovery in equity after a period of contraction.

Debt to Equity Ratio

The debt to equity ratio exhibits an overall increasing pattern from 1.34 in 2014 to a peak of 2.58 in 2018, reflecting higher leverage over these years. After reaching this high point, the ratio decreases to 2.05 in 2019. The elevated ratios imply that debt levels became significantly larger relative to equity, especially in 2018, indicating a possible increase in financial risk during that period, followed by some deleveraging in the most recent year.

The financial data indicates notable fluctuations in the capital structure over the six-year period. Total debt initially increased from 8,785,800 thousand US dollars in May 2014 to 9,223,900 thousand US dollars in May 2015, followed by a decrease to 8,430,900 thousand US dollars in May 2016. Subsequently, total debt rose again, peaking at 15,818,600 thousand US dollars in May 2018, before declining slightly to 14,490,000 thousand US dollars by May 2019.

Total capital exhibited a different pattern, declining steadily from 15,320,600 thousand US dollars in May 2014 to 13,361,100 thousand US dollars in May 2016. It then experienced growth, reaching a peak of 21,959,700 thousand US dollars in May 2018, with a marginal decrease to 21,544,500 thousand US dollars in May 2019.

The debt to capital ratio showed an overall increase from 0.57 in May 2014 to a high of 0.72 in May 2018, indicating a greater reliance on debt financing relative to total capital over time. In May 2019, this ratio decreased somewhat to 0.67 but remained above the levels seen in the earlier years.

Trends in Total Debt

Initial increase, followed by a dip in 2016, then a significant rise through 2018 before a moderate decrease in 2019.

Trends in Total Capital

Decline over the first three years, a marked increase in 2017 and 2018, with slight contraction in the final year observed.

Debt to Capital Ratio

Overall upward trajectory, peaking in 2018, indicative of increased leverage, with some reduction in leverage noted in 2019.

These patterns suggest a strategy involving increased debt utilization to finance growth or capital expenditures around 2017 and 2018, followed by an effort to reduce leverage in the subsequent year. The increases in total capital alongside rising debt levels imply an expansion phase, while the debt to capital ratio movements reflect changes in the company’s risk and capital structure policies during the period analyzed.

Total Debt

Over the analyzed period, total debt exhibited fluctuations with a general upward trend. Starting at approximately $8.79 billion in 2014, total debt increased slightly to around $9.22 billion in 2015, then decreased to about $8.43 billion in 2016. A notable increase occurred in 2017, reaching nearly $9.48 billion, followed by a significant surge in 2018 to approximately $15.82 billion. The following year saw a modest reduction, with total debt closing near $14.49 billion in 2019.

Total Assets

Total assets demonstrated relatively stable figures from 2014 through 2017, ranging from roughly $21.7 billion to $23.1 billion. However, a marked increase took place in 2018, with total assets rising to about $30.62 billion, maintaining a similar level in 2019 with just a slight decrease to approximately $30.11 billion.

Debt to Assets Ratio

The debt to assets ratio shows an increasing trend overall. It started at 0.38 in 2014 and rose to 0.42 in 2015. After a brief dip to 0.39 in 2016, the ratio climbed back to 0.43 in 2017. The most significant increase was observed in 2018, reaching 0.52, indicating that over half of the assets were financed through debt at that point. In 2019, the ratio slightly declined to 0.48, still remaining at a relatively high level compared to earlier years.

Insights

The data suggest that while total assets saw considerable growth particularly from 2017 to 2018, total debt grew even more substantially during this period, as reflected in the sharp rise in the debt to assets ratio. This indicates an increase in leverage and potentially higher financial risk. The slight reduction in debt and the debt to assets ratio in 2019 may reflect efforts to manage or reduce leverage after the significant rise in the previous year. Overall, the company appears to have increased its borrowing considerably in recent years relative to its asset base.

Total assets

The total assets of the company exhibited a steady level between 2014 and 2017, fluctuating slightly around the 21.7 to 23.1 billion US dollars range. A significant increase occurred in 2018, with total assets rising sharply to approximately 30.6 billion US dollars, maintaining a similar level in 2019 at about 30.1 billion US dollars. This sudden growth indicates a major expansion or acquisition activity during this period.

Stockholders’ equity

Stockholders’ equity demonstrated a declining trend from 2014 through 2017, decreasing from roughly 6.5 billion to 4.3 billion US dollars. However, a recovery began in 2018 and continued into 2019, where equity rose substantially to around 7 billion US dollars. This reversal in the trend suggests improved profitability or capital infusion after several years of decline.

Financial leverage

The financial leverage ratio increased from 3.54 in 2014 to a peak of 5.04 in 2017, indicating growing use of debt relative to equity during this timeframe. Subsequently, the ratio decreased in 2018 and further in 2019 to 4.27, reflecting a reduction in leverage and potentially a stronger equity base or a decrease in total debt levels.

Earnings before interest and tax (EBIT)

Over the six-year period, the EBIT experienced notable fluctuations. Starting at a high point of approximately 3.06 billion USD in 2014, the EBIT declined sharply to about 2.17 billion USD in 2015. Subsequently, it recovered notably in 2016, reaching approximately 2.80 billion USD. In the following years, EBIT showed a moderate downward trend, with values stabilizing around the 2.60 to 2.68 billion USD range between 2017 and 2019. Overall, despite the initial drop and some variability, EBIT remained relatively stable in the latter years, although it did not return to the initial 2014 level.

Interest expense, net of capitalized interest

Interest expenses exhibited a general upward trend during the examined period. Starting from 318.5 million USD in 2014, the interest expense remained relatively stable through 2017, fluctuating between approximately 302.1 million USD and 328.6 million USD. However, a significant rise occurred in 2018, where interest expense increased to about 385.4 million USD, followed by a substantial jump in 2019 reaching 527.4 million USD. This sharp increase in interest costs in the last two years indicates a potential increase in debt levels, higher interest rates, or other related financial factors.

Interest coverage ratio

The interest coverage ratio, which measures the ability to meet interest obligations from operating earnings, demonstrated a declining trend over the period. Starting from a strong ratio of 9.62 in 2014, it decreased significantly to 6.62 in 2015, aligning with the decrease in EBIT and stable interest expenses. Following a rebound to 8.99 in 2016, the ratio again declined gradually each subsequent year, reaching 5.08 by 2019. This downward trend reflects diminishing EBIT relative to rising interest expenses, indicating a potential weakening in the company's ability to cover interest payments from operating earnings over time.

Earnings before fixed charges and tax

The earnings before fixed charges and tax exhibit volatility over the six-year period. Starting at 3,252,100 thousand US dollars in 2014, there is a notable decline in 2015 to 2,368,300 thousand US dollars. Following this decrease, earnings rise in 2016 to 2,993,000 thousand US dollars but then gradually decline in the subsequent years, reaching 2,795,100 thousand US dollars in 2018. In 2019, a slight increase occurs, ending at 2,866,300 thousand US dollars. Overall, the earnings do not show a consistent growth trend, experiencing fluctuations with an overall downward drift from the initial year.

Fixed charges

Fixed charges demonstrate a generally increasing trend over the examined period. Commencing at 507,500 thousand US dollars in 2014, these charges remain relatively stable through 2016, with minor fluctuations. Thereafter, there is a noticeable upward trajectory, rising to 574,800 thousand US dollars in 2018 and sharply increasing to 712,300 thousand US dollars by 2019. This rising pattern in fixed charges could indicate growing financial obligations or increased cost structures associated with fixed expenses.

Fixed charge coverage ratio

The fixed charge coverage ratio declines progressively throughout the years. Starting at a relatively strong ratio of 6.41 in 2014, it falls markedly to 4.54 in 2015. Despite some improvement to 5.97 in 2016 and a slight decline to 5.81 in 2017, the ratio decreases again in the last two years, reaching 4.86 in 2018 and further dropping to 4.02 in 2019. This downward trend indicates a weakening ability to cover fixed charges with earnings before fixed charges and tax, which may suggest increasing financial risk or reduced operational efficiency in meeting fixed financial obligations.