General Mills Inc., FCFE calculation

US$ in thousands

12 months ended:	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
Net earnings attributable to General Mills	1,752,700)	2,131,000)	1,657,500)	1,697,400)	1,221,300)	1,824,400)
Net earnings attributable to redeemable and noncontrolling interests	33,500)	32,000)	43,600)	39,400)	38,100)	36,900)
Net noncash charges	1,028,300)	135,900)	844,200)	634,800)	1,068,700)	711,900)
Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures	(7,500)	542,100)	(232,000)	258,200)	214,700)	(32,200)
Net cash provided by operating activities	2,807,000)	2,841,000)	2,313,300)	2,629,800)	2,542,800)	2,541,000)
Purchases of land, buildings, and equipment	(537,600)	(622,700)	(684,400)	(729,300)	(712,400)	(663,500)
Proceeds from disposal of land, buildings, and equipment	14,300)	1,400)	4,200)	4,400)	11,000)	6,600)
Change in notes payable	(66,300)	327,500)	962,400)	(323,800)	(509,800)	572,900)
Issuance of long-term debt	339,100)	6,550,000)	1,072,100)	542,500)	2,253,200)	1,673,000)
Payment of long-term debt	(1,493,800)	(600,100)	(1,000,000)	(1,000,400)	(1,145,800)	(1,444,800)
Free cash flow to equity (FCFE)	1,062,700)	8,497,100)	2,667,600)	1,123,200)	2,439,000)	2,685,200)

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

Operating Cash Flow Trend: The net cash provided by operating activities for the company remains relatively stable over the analyzed six-year period. It fluctuates within a narrow range, starting at approximately $2.54 billion in 2014 and peaking slightly above $2.84 billion in 2018. A slight dip is observed in 2017 where the value declined to approximately $2.31 billion, followed by a recovery to $2.84 billion in 2018 and a minor decrease to $2.81 billion in 2019. Overall, this indicates consistent cash generation from core operations without significant volatility.
Free Cash Flow to Equity (FCFE) Analysis: The Free Cash Flow to Equity exhibits considerable volatility across the six-year period. It begins at around $2.69 billion in 2014, followed by a marginal decline in 2015 to approximately $2.44 billion. A notable drop occurs in 2016, reducing FCFE to roughly $1.12 billion. This is succeeded by a significant rebound to approximately $2.67 billion in 2017 and an exceptional spike to about $8.50 billion in 2018, which stands out as an anomaly compared to other years. However, in 2019, FCFE falls sharply to around $1.06 billion. These fluctuations suggest variability in cash available to equity shareholders, possibly due to changes in capital expenditures, debt repayments, or other financial adjustments impacting equity-related cash flows.
Comparative Insights: Comparing the two indicators, net cash from operations shows stability, whereas FCFE demonstrates considerable swings, including one year with an extraordinary increase. The divergence indicates that non-operational cash items or capital structure changes play a significant role in defining cash flow available to equity holders. The spike in 2018’s FCFE may require further investigation to understand its drivers and sustainability.

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General Mills Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	604,816,813
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)	1,062,700)
FCFE per share	1.76
Current share price (P)	53.18
Valuation Ratio
P/FCFE	30.27
Benchmarks
P/FCFE, Competitors¹
Coca-Cola Co.	41.42
Mondelēz International Inc.	38.21
PepsiCo Inc.	21.84
Philip Morris International Inc.	30.80

Based on: 10-K (reporting date: 2019-05-26).

¹ Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

General Mills Inc., historical P/FCFE calculation, comparison to benchmarks

	May 26, 2019	May 27, 2018	May 28, 2017	May 29, 2016	May 31, 2015	May 25, 2014
No. shares of common stock outstanding¹	601,959,611	593,367,848	577,099,679	597,020,906	598,737,719	612,508,457
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)²	1,062,700)	8,497,100)	2,667,600)	1,123,200)	2,439,000)	2,685,200)
FCFE per share³	1.77	14.32	4.62	1.88	4.07	4.38
Share price^1, 4	52.52	44.26	54.97	71.32	56.59	53.05
Valuation Ratio
P/FCFE⁵	29.75	3.09	11.89	37.91	13.89	12.10
Benchmarks
P/FCFE, Competitors⁶
Coca-Cola Co.	—	—	—	—	—	—
Mondelēz International Inc.	—	—	—	—	—	—
PepsiCo Inc.	—	—	—	—	—	—
Philip Morris International Inc.	—	—	—	—	—	—

Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2019 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,062,700,000 ÷ 601,959,611 = 1.77

⁴ Closing price as at the filing date of General Mills Inc. Annual Report.

⁵ 2019 Calculation
P/FCFE = Share price ÷ FCFE per share
= 52.52 ÷ 1.77 = 29.75

⁶ Click competitor name to see calculations.

Share Price Trend: The share price exhibited a fluctuating pattern over the analyzed period. It increased modestly from $53.05 in May 2014 to a peak of $71.32 in May 2016. However, it subsequently declined significantly, reaching a low of $44.26 in May 2018, before experiencing a partial recovery to $52.52 by May 2019.
Free Cash Flow to Equity (FCFE) per Share: FCFE per share showed notable volatility throughout the period. Starting at $4.38 in May 2014, it saw a slight decline to $4.07 in May 2015, followed by a sharp drop to $1.88 in May 2016. The value rebounded to $4.62 in May 2017 and surged dramatically to $14.32 in May 2018, before falling sharply again to $1.77 in May 2019. This irregular pattern indicates significant fluctuations in the company's free cash flow generation available to shareholders.
Price to FCFE (P/FCFE) Ratio: The P/FCFE ratio demonstrated considerable variability, reflecting changes in both share price and FCFE per share. Starting at 12.1 in May 2014, it increased slightly to 13.89 in May 2015, followed by a substantial rise to 37.91 in May 2016. It then decreased sharply to 11.89 in May 2017 and reached its lowest point at 3.09 in May 2018. However, the ratio surged once more to 29.75 by May 2019. These movements suggest fluctuating market valuations relative to the company's free cash flow, indicative of changing investor sentiment or underlying earnings quality.
Insights and Interpretation: The data reveals a lack of consistent growth in both share price and free cash flow metrics, accompanied by pronounced volatility in valuation multiples. The sharp increases and declines in FCFE per share point to variability in cash generation efficiency or potential one-time cash flow impacts. The corresponding oscillations in the P/FCFE ratio imply shifts in market pricing that are not always aligned with underlying free cash flow trends. Overall, the financial indicators suggest a period of uncertainty or transition affecting company performance and investor perception over the six-year timeframe.

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General Mills Inc. (NYSE:GIS)

Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)

Price to FCFE Ratio, Current

Price to FCFE Ratio, Historical