Please read and follow these instructions carefully.

Make sure you understand what you have to

do before attempting to complete this assignment. You will need to do some work on the data
supplied here, outside of this window before coming back and entering your answers. You can
save your work as you go (save button at the bottom of this page), and come back and add more
answers later, as long as it is submitted before the closing date of 29/6/2015 at 6pm Melbourne
time (UTC+10). Ensure you submit your final answers for grading (button at the bottom of the
page).
Instructions
There are three (3) parts to this assignment worth 20 points in total. You will need to complete all
three parts.
Part one: Ratio computations (9 points) - Use the data supplied below to complete these
calculations and then enter them in the quiz link below (Part One).
AND
Part two: Ratio analysis (10 points total) to be completed here in the peer assessment after you
have done your calculations in part one.
AND
Part three: NPV calculation (1 point) Calculate the NPV of the project supplied and then
choose the closest answer to your answer in the quiz link below (Part One).
Data: Both parts of this assignment are based on the supplied financial extracts from Kellogg's
financial statements in 2012 and 2011 - use all of the data below in your assignment, or you
can download this PDF file and use it as a reference while you do the assignment if you want to
work offline.
You can also download an Excel spreadsheet with the data. The data in both the PDF the Excel
spreadsheet are the same as the data presented below. We are giving it to you in three formats, as
an option so you can work with the data the way you want to. You can use one or all three data
sources.
The data presented below are financial extracts from Kellogg's financial statements in 2012 and
2011.
Statement of profit and loss
(millions, except per share data)
Net sales
Cost of goods sold
Selling, general and administrative expense
Operating profit
Interest expense
Other income (expense), net

2012
$ 14,197
8,763
3,872
1,562
261
24

2011
$ 13,198
8,046
3,725
1,427
233
(10)

(millions, except per share data)

Net sales
Income before income taxes
Income taxes
Net income

2012
$ 14,197
1,325
364
961

2011
$ 13,198
1,184
318
866

(millions, except per share data)

Cash and cash equivalents
Accounts receivable
Inventories
Other current assets
Total current assets
Property
Goodwill
Other intangibles
Other assets
Total non-current assets
Total asssets

2012
$ 281
1,454
1,365
280
3,380
3,782
5,053
2,359
610
11,804
15,184

2011
$ 460
1,188
1,174
247
3,069
3,281
3,623
1,454
516
8,874
11,943

Current maturities of long-term debt

Accounts payable
Total current liabilities
Long-term debt
Other liabilities
Total non-current liabilities
Total liabilities
Total equity

3,121
1,402
4,523
6,082
2,099
8,181
12,704
2,480

2,124
1,189
3,313
5,037
1,795
6,832
10,145
1,798

Balance sheet

Other information
Average basic shares outstanding
358
Share price
56.52
NOTE: In 2013 Kellogg's share price was $57.98.

362
-

Part One: Ratio computation (9 points)

Calculate the following financial ratios and measures for 2012 first, and then use this link to
go to a numeric entry quizand enter your answers there.

The numeric entry quiz is also available in the Quizzes section of the course
- https://class.coursera.org/financialanalysis-001/quiz
Note: Please give all percentage answers to the nearest percentage and give all other numerical
answers to 2 decimal places.
You need to calculate for 2012 the following ratios and measures:
Profitability Ratios 1
Gross Margin %
Operating Margin %
Net Profit Margin %
ROE %
ROA %
Efficiency Measures
Total Asset Turnover
Receivables Turnover
Average Collection Period (days)
Inventory Turnover
Days in Inventory

Profitability Ratios 2
EPS
Price/Earnings Ratio

Leverage Measures
Debt/Equity Ratio
Debt/Assets Ratio
Interest Coverage Ratio

Liquidity Measures
Current Ratio
Quick Ratio
Cash Ratio

Part Two: Ratio analysis (10 points)

Comment and interpret on how the 2013 ratios and measures differ from the 2012 ratios
and measures you calculate for each question. Make your comments brief (no more than 100
words for each comment). Enter your comments in the fields below for each section for the
following areas:

Profitability Ratios 1

Profitability Ratios 2

Leverage Measures

Efficiency Measures

Liquidity Measures

If a certain ratio has changed significantly, explain exactly what the change indicates about that
particular aspect of the business. If it has gone down, is that a positive or negative sign?
Why or why not?

Part Three: NPV calculation (1 point)

Consider the following investment proposal for a 6-year project.
The investment has an upfront cost of $1,500,000.
The proposal is expected to generate cash inflows for 6 years according to the following
schedule:

Year 1: $750,000;

Year 2: $1,500,000;

Year 3: $2,000,000;

Year 4: $1,250,000;

Year 5: $1,000,000;

Year 6: $500,000.

Each year of operation you must also pay the cost of labour attached to the project a cash
outflow of $750,000 per year.
You have estimated that the appropriate discount rate for the project is 11% per annum.
Calculate the NPV of the project and then select the answer closest to your NPV calculation in
the quiz for part one of this assessment. (see link above in Part One).

Comment and interpret on the Profitability Ratios 1 in the text

box below:

Comment and interpret on the Profitability Ratios 2 in the text

box below:

Comment and interpret on the Leverage Measures in the text

box below:

Comment and interpret on the Efficiency Measures in the text

box below:

Comment and interpret on the Liquidity Measures in the text

box below: