General Mills Inc. (NYSE:GIS)

The financial ratios associated with asset and equity turnover reveal notable trends over the observed periods. These indicators provide insight into the efficiency and effectiveness of asset utilization and equity management within the company.

Net Fixed Asset Turnover

This ratio demonstrates fluctuations with a general downward trend until the penultimate period. Starting from 4.54 in 2014, it increased slightly to 4.66 in 2015, then declined gradually over the next three years reaching a low of 3.89 in 2018. However, in 2019, there was a notable recovery to 4.45. This pattern suggests varied efficiency in using net fixed assets to generate sales, with a dip in asset utilization prior to an improvement by the final period.

Total Asset Turnover

The total asset turnover ratio depicts a generally decreasing trend from 0.77 in 2014 to a low of 0.51 in 2018, followed by a slight rebound to 0.56 in the last recorded year. This decline indicates a decreasing efficiency in generating sales from total assets over the majority of the timeline, with only a modest improvement at the end.

Equity Turnover

This ratio shows more volatility relative to asset turnover ratios. It improved significantly from 2.74 in 2014 to a peak of 3.61 in 2017, indicating enhanced effectiveness in generating revenue per unit of equity. However, this upward trend reversed sharply in the last two years, declining to 2.56 in 2018 and further to 2.39 in 2019. The dissimilar movement in equity turnover compared to asset turnover may reflect changes in capital structure, shareholder equity, or operational strategy that impacted revenue generation relative to equity.

In summary, the data reveals mixed performance with regard to asset and equity utilization. While net fixed asset turnover experienced recovery after a period of decline, total asset turnover consistently decreased with a minor recovery at the end. Equity turnover showed strong growth peak followed by a notable retreat in the most recent years. These trends suggest that while the company made some gains in using fixed assets more efficiently in its later years, overall asset utilization and equity efficiency faced challenges, potentially warranting further analysis into underlying operational or financial factors.

Net Sales

The net sales showed a declining trend from 2014 to 2017, dropping from approximately $17.91 billion to around $15.62 billion. A slight recovery was observed in 2018, with net sales increasing marginally to about $15.74 billion, followed by a more notable increase in 2019 reaching approximately $16.87 billion. Overall, the data indicates a downward trend in net sales over the first four years with a moderate rebound in the last two years.

Land, Buildings, and Equipment

Investment in land, buildings, and equipment generally decreased over the period, starting at $3.94 billion in 2014 and declining to roughly $3.69 billion in 2017. An exception occurred in 2018 when the value rose to about $4.05 billion, before slightly falling again to approximately $3.79 billion in 2019. This suggests a modest level of capital expenditure or revaluation during the 2018 fiscal year, followed by a stabilization or minor reduction.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio, which measures efficiency in using fixed assets to generate sales, experienced a decline from 4.54 in 2014 to a low of 3.89 in 2018. However, in 2019 this ratio improved significantly to 4.45, indicating a stronger use of fixed assets in generating sales towards the end of the period. This pattern aligns with the recovery observed in net sales during the same timeframe.

Net Sales

Net sales exhibit a declining trend from 2014 to 2017, decreasing from approximately $17.91 billion to $15.62 billion. In 2018, this downward trend stabilizes with a slight increase to $15.74 billion, followed by a noticeable recovery in 2019, reaching $16.87 billion. Overall, net sales declined initially but showed signs of improvement towards the end of the period.

Total Assets

Total assets remained relatively stable from 2014 through 2017, fluctuating slightly around the $21.7 billion mark. A significant increase occurred in 2018, with total assets rising sharply to about $30.62 billion, and then slightly declining to $30.11 billion in 2019. This suggests a major asset acquisition or investment took place around 2018.

Total Asset Turnover

Total asset turnover ratio shows a declining pattern over the analyzed period. Starting at 0.77 in 2014, it peaked slightly at 0.80 in 2015 before consistently dropping to a low of 0.51 in 2018. A minor rebound to 0.56 occurred in 2019. The declining ratio indicates diminishing efficiency in utilizing assets to generate sales, particularly after the significant asset increase in 2018.

Net Sales

Net sales exhibited a general downward trend from 2014 to 2017, declining from 17,909,600 thousand US$ in 2014 to 15,619,800 thousand US$ in 2017. However, a slight recovery is observed in the following years, with net sales increasing to 15,740,400 thousand US$ in 2018 and further to 16,865,200 thousand US$ in 2019. Despite this partial rebound, the 2019 figure remains below the 2014 level.

Stockholders’ Equity

Stockholders’ equity showed a fluctuating pattern over the analyzed period. It decreased significantly from 6,534,800 thousand US$ in 2014 to 4,326,900 thousand US$ in 2017. Subsequently, equity rebounded noticeably, reaching 6,141,100 thousand US$ in 2018 and further increasing to 7,054,500 thousand US$ in 2019, surpassing the initial 2014 level.

Equity Turnover Ratio

The equity turnover ratio experienced volatility during the period. It rose from 2.74 in 2014 to a peak of 3.61 in 2017, indicating higher efficiency in generating sales from shareholders' equity during those years. Following the peak, the ratio declined sharply to 2.56 in 2018 and further to 2.39 in 2019, coinciding with the increase in equity and the moderate recovery in net sales.

Summary of Trends and Insights

The data reveals that net sales faced a declining phase until 2017, after which there was modest growth. Conversely, stockholders’ equity followed a decreasing trend for the first part of the period before strong growth returning it to a higher level by 2019. The equity turnover ratio mirrored these movements, increasing when equity was lower and sales were relatively stable, and decreasing as equity grew faster than net sales.

This pattern suggests that the company’s efficiency in utilizing equity to generate sales was higher during years of lower equity but declined as equity increased, despite the partial recovery in sales. Overall, the company's financial position strengthened in terms of equity by the end of the period while sales showed signs of recovery after a prior decline.