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    1. The document compares COGS, SGA expenses, income tax expenses, and inventory levels between Kelloggs and General Mills in 2009 and 2010. 2. COGS is significantly higher than other expenses for both companies. General Mills had lower SGA expense ratios both years. General Mills' income tax ratio increased 6% while Kelloggs' decreased 2%. 3. Kelloggs uses the weighted average inventory method bringing higher profits than LIFO. General Mills uses LIFO outside the US lowering income and expenses and reducing taxes paid. Both companies need perpetual inventory systems due to perishable goods.

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    1. The document compares COGS, SGA expenses, income tax expenses, and inventory levels between Kelloggs and General Mills in 2009 and 2010. 2. COGS is significantly higher than other expenses for both companies. General Mills had lower SGA expense ratios both years. General Mills' income tax ratio increased 6% while Kelloggs' decreased 2%. 3. Kelloggs uses the weighted average inventory method bringing higher profits than LIFO. General Mills uses LIFO outside the US lowering income and expenses and reducing taxes paid. Both companies need perpetual inventory systems due to perishable goods.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    16 views12 pages

    DC2

    Uploaded by

    Navin
    1. The document compares COGS, SGA expenses, income tax expenses, and inventory levels between Kelloggs and General Mills in 2009 and 2010. 2. COGS is significantly higher than other expenses for both companies. General Mills had lower SGA expense ratios both years. General Mills' income tax ratio increased 6% while Kelloggs' decreased 2%. 3. Kelloggs uses the weighted average inventory method bringing higher profits than LIFO. General Mills uses LIFO outside the US lowering income and expenses and reducing taxes paid. Both companies need perpetual inventory systems due to perishable goods.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 12

    Kelloggs General Mills

    Largest Expense COGS COGS


    7108 8922.9
    If we compare the COGS and General, Administrative, and Selling Expenses, COGS is thrice that o
    g Expenses, COGS is thrice that of others and it proves to be a significant expense for both the companies.
    General
    and
    Administr Selling, General Comparis
    ative and Ratio on based
    Expense(2 Ratio (SGA/Net Administrative (SGA/Net on both
    Company Name 009) Sales) Expense(2010) Sales) the years
    Ratio
    General Mills 2951.8 0.20092163389 3236.1 0.218707 increased

    Ratio
    Kelloggs 3390 0.26958250497 3299 0.266113 decreased
    Both in 2009
    General Mills
    has the lowest
    ratio and in
    2010 General
    Mills has the
    lowest ratio.
    Comparis
    Income Income on based
    Company Tax Ratio to Tax on both
    Name (2009) Income Tax (2010) Ratio the years

    Around 6
    %
    increase
    for
    General General
    Mills 771.2 0.349829893 720.4 0.370919576 Mills

    Almost 2
    %
    decrease
    for
    Kelloggs 502 0.288174512 476 0.282660333 Kelloggs

    In 2009
    General
    Mills has
    the
    highest
    ratio and
    in 2010
    General
    Mills has
    the
    highest
    ratio.
    From Cash Flow Statement Debit Credit
    Land, buildings and equipments 649.9
    Cash 649.9
    From Cash Flow Debit Credit
    Long Term Debt 906.9
    Cash 906.9
    Kellogs
    General Mills
    Revenue recognition is based on when the delivery is accepted by the customer and bills are sent to customers and custom
    products to the company only on prior approval. No there are no difference in the companies' revenue recognition policie

    Accts receivable
    1190
    1041.6

    Kellogs has a greater percentage of receivables


    40.82333
    29.93103

    Accts receivable
    Kellogs 1190 40.82333
    General Mil1041.6 29.93103
    1 Kellogs and General Mills are manufacturers.
    2
    Inventories
    Kellogs 1056 10.04474
    General Mills 1344 7.602283

    3 The advantage to Kelloggs is that they use the weighted average method and using this method brings in
    4 In General Mills outside USA they use LIFO so lower income and higher expense so they have to pay less
    5 Both Kellogs and General Mills have perishable goods that have an expiry date so both companies need t
    and using this method brings in higher profits than LIFO and lower than FIFO
    xpense so they have to pay less tax. But inside USA they use FIFO which shows higher income and less expense and they evntually have to
    date so both companies need to have a perpetual inventory system so that they can keep the balance of the inventory in a smooth way.
    se and they evntually have to pay high tax.
    e inventory in a smooth way.

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