General Mills Vs Kraft Essay

Kraft Heinz’s net profit margin shows a sharp increase in 2016 due to acquiring Heinz in 2015 and surpasses General Mills, who had double the percentage of Kraft in 2015. Gross profit percentage also shows Kraft overtaking General, but only slightly. The fixed asset turnover ratio for both companies is similar with Kraft’s at 4.01 and General Mills at 4.40, ultimately showing that General Mills has more effectively invested to generate more revenue than Kraft. Return on Equity show’s Kraft is struggling to create capital from investments compared to General Mills, Kraft’s ROE is 6.33 and General Mills is 34.99. Earnings per Share is neck and neck with Kraft at 2.84 and General Mills at 2.83. The Price/Earnings Ratio shows Kraft having more prospects for growth compared to General Mills, with Kraft at 31.74, and General Mill’s at 23.1.

Looking at the inventory turnover ratio shows General Mills behind Kraft considerably, Kraft has a ratio of 32.3 compared to General Mills 12.06, which shows General Mills having weaker sales and excessive inventory than Kraft. Although, Kraft has better receivable and inventory turnover ratios, the current ratio shows General Mills in the lead. At 7.27, General Mills is better at paying their short-term obligations than Kraft who is at 6.38.
At the end of 2016, Kraft’s debt-to-assets ratio was .52, and an increase from 2015’s total of .46; for General Mills, 2016 and 2015 showed them having a .72 ratio, and a risker financial strategy compared to Kraft’s. Time Interest Earned in 2016 shows Kraft having a 5.43 ratio, which is less than General Mills’ 8.8. While Kraft has a safer financing strategy than General Mill’s, Kraft is worse at generating profit to cover interest expense than General