We Have Numbers Of Free Samples

Part-A

Introduction

The company that we have chosen for the report is named Campbell. This is a household name in US for packaged food. Company sells canned soup and related products. The company is based of America and is headquartered in Camden. The company has its presence in more than 120 countries.

Products

The products of company can be summed up under following categories:

1. Soup – Condensed, chunky, healthy, natural, oriental and so on
2. Sauce – Garden Fresh, Pace Foods, Prego
3. Baked Goods – Arnott’s Biscuits, Pepperidge Farm
4. Beverages – Tomato Juice, Vegetable Juice, Splash Juice drinks, V-fusion
5. Swanson – Broth, Chicken a La King
6. Other products – Meatballs, school cafeteria services, meal kits and so on

Future Performance of These Products

In the fast pace life, people don’t have much time to buy and cook with the fresh ingredients every day. This has created a big market for the packaged and canned food products. Further, there has been an increase in focus on health hence there has been a significant increase in the healthy food, soup and baked products. Considering these two scenarios, we can say that the outlook for the demand of the products of Campbell is positive. Further, company has its presence in more than 120 countries and has many of its product catering to specific country hence we can say that we expect the demand to remain strong.

Financial Summary for Past 3 Years

The financial performance of the company can be summarized under three heads – profitability, liquidity and leverage. The company has recorded decline in revenue however the profitability of the company has remained strong as can be seen from the operating margin of 20% and net margin of 11%. The company has generated good returns for investor as can be seen from RoE of 56% which has drastically improved from last year. The improvement in income has also reflected in better cash flows where the operating cash flow have been recorded at $1.2 billion. Company has been using the operating cash flows to repay the debt which can be seen from cash outflow of $911 million from financing activities. This has heled company to improve its interest cost and profitability. The good cash flows have helped the liquidity as well which has remained at comfortable level. Though current ratio continued to be less than 1. The leverage profile of the company has remained comfortable with debt to equity of 1.53 which is less than 2 and interest coverage of more than 12.

Particular	2015	2016	2017
Revenue	8,082	7,961	7,890
Gross Margin	34.4	34.9	38.8
Operating Margin	14.4	13.9	20.7
Net Margin	8.55	7.07	11.24
RoA	8.53	7.07	11.40
RoE	46.14	38.76	56.10
RoIC	13.76	12.09	18.77
Current Ratio	0.75	0.75	0.79
Quick Ratio	0.32	0.36	0.39
Receivables Turnover	13.17	13.45	12.82
Inventory Turnover	5.25	5.36	5.25
Asset Turnover	1.00	1.00	1.01

Part-B

1. The name of the auditor is Pricewaterhouse Coopers LLP. The same can be seen from the page no 97 of the annual report.

2. There is no specific information on the annual report of the company regarding the number of meetings that audit committee had however the charter of audit committee says that they are expected to meet at least once per year to review the various financial reports.

3. There are five members in the audit committee of the company. The same can be seen as below:

4.The information of the same is not given in the annual report of the company and the website of the company has also not given on the website of the company.

5. The name of the CEO of the company is Denise Morrison. She has been appointed in August 2011.

6. Les C. Vinney is the chair of board and he has retired in 2017.

7. There are 13 members in the boards of the company.

8. The board of the company has met once in FY17.

Part C. Income Statement

1. The company has 305 million shares outstanding on the basic level. The same can be seen from Item 6 of 10-K Sec Filling.

2. The basic per share earning has been $2.91 in FY17.

3. Company has reported net sales of $7.89 billion in Fy17. The same can be seen from Item 8 of 10-K Sec Filling.

4. The operating income of the company has been $1.6 billion in FY17.

5. The company has reported interest expense of $112 million in FY17.

6. The pre-tax earnings of the company has been of $1.29 billion.

7. The income tax expense of the company has been of $406 Million in FY17.

8. The net income of the company has been $887 Million in FY17.

9.

Particular	2015	2016	2017
Revenue	8,082	7,961	7,890
Gross Margin	34.4	34.9	38.8
Operating Margin	14.4	13.9	20.7
Net Margin	8.55	7.07	11.24
RoA	8.53	7.07	11.40
RoE	46.14	38.76	56.10
RoIC	13.76	12.09	18.77

The profitability of the company has been at upward trend as can be seen from the improvement in GM, OM as well as NM of the company. All the profitability indicators have shown upward trend. The same has been reflected in return ratio as well where the RoA and RoE have jumped significantly. The same can be seen from the fact that company has paid good dividend.

10. Campbell is an US entity and follows FASB guidelines for the preparation of financial statement. The page no 14 of the SEC filling (https://www.sec.gov/Archives/edgar/data/16732/000001673217000058/cpb-7302017x10xk.htm#s9FF6414A1F8859D59FF365995F2B85F9) mentions that company has used FASB for the preparation of the financials. FASB is knows as generally accepted financial standards (GAAP). In my opinion, IFRS income statement are better than GAAP for the reason that IFRS is now globally accepted hence a company which prepares its statement as per IFRS tend to have global recognition and comparability.

Part D. Balance sheet

1. The total asset of the company is $7.7 billion as on July 30, 2017.

2. Total current assets of the company are $1.9 billion.

3. The company has reported account receivables as $647 Million while the same has been reported at $605 million. This means that the same has declined by 6.49%. As an investor I would like to see the decline in receivables so that company can generate cash and ease out its liquidity. This will help in lower reliance on short term debt hence lower interest cost and better profitability.

4. The company has not disclosed the inventory valuation practice. The reason for the same could be that this is not a material event.

5. Net pant and properties has been of $2,4 billion.

6. The company has been depreciating assets by straight line method where life of assets has been in the range of 2 to 45 years. The same can be seen from the page no 70 of annual report.

7. Company has reported intangible in form of goodwill of $2.1 billion.

8. The total liabilities of the company are $6.08 billion.

9. The current liabilities of the company are $2.39 billion.

10. The non-current liabilities of the company are $3.69 billion.

11. Total contributed capital of the company is $1.63 billion.

12.

Particular	2015	2016	2017
Current Ratio	0.75	0.75	0.79
Quick Ratio	0.32	0.36	0.39
Receivables Turnover	13.17	13.45	12.82
Inventory Turnover	5.25	5.36	5.25
Asset Turnover	1.00	1.00	1.01

The liquidity profile of the company has also improved with improvement in margins. Though, due to retail operations the inventory has remained high thus current ratio has been subdued. The receivables turnover has remained strong at 12 and inventory turnover has also been more than 5.

13. Campbell is an US entity and follows FASB guidelines for the preparation of financial statement. The page no 14 of the SEC filling (https://www.sec.gov/Archives/edgar/data/16732/000001673217000058/cpb-7302017x10xk.htm#s9FF6414A1F8859D59FF365995F2B85F9) mentions that company has used FASB for the preparation of the financials. FASB is knows as generally accepted financial standards (GAAP). In my opinion, IFRS income statement are better than GAAP for the reason that IFRS is now globally accepted hence a company which prepares its statement as per IFRS tend to have global recognition and comparability.

Part E. Cash flow statement

1. The cash flow from operating activities has been of $1.2 billion while investing activities have reported cash outflow of $368 million and financing activities have reported cash out flow of $911 million.
2. The company has invested $338 million in property plant and equipment.
3. the company has reported net income of $887 million while net cash from operating activities has been $1.2 billion. This is indicative of strong cash flow generation from the company and this is a good sign.
4. The most of the difference between the two has arisen from non-cash expenses such as impairment charges and depreciation.
5. Yes, the company has paid dividend of $420 million as can be seen from financing activities.
6. Cash dividend has been 47.3% of the net income.

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