Document Sample
BKF-ConAgra Powered By Docstoc
					ConAgra Foods, Inc
  Bryna Fugate
     Executive Summary
 The company needs to raise their net income.
 One good point is that they reduced the time
           they have inventory on hand.
They are slowly improving there Debt to Equity
With their future plans and good outlook I feel
that they are on the right track to improving there
             company and its numbers.

            2005 Annual Report
                    The Company
   Bruce Rhode, Chairman and Executive Officer
   Home Office: One ConAgra Drive
                      Omaha, NE 68102-5001
   The ending date of the last fiscal year was May 29, 2005.
   ConAgra has three segments: Retail, Foodservice, and Food
    Ingredients. Some of the company’s products include: Processed
    prepared meats, condiments, cooking products, frozen entrees and side
    dishes, and cooking ingredients.
   ConAgra is a global company but its main distribution is in the United
               Audit Report
 Deloitte and Touch LLP
  Omaha, NE
 The statements are accurate in stating the position
  of the company. Also, they changed its method
  of accounting for variable interest entities and
  asset retirement obligations in 2004. It also
  changed its methods of accounting for goodwill
  and other intangible assets in 2003.
    Stock Market Information
 Stock Price : 20.99
 Twelve month trading range: $28.39-19.99
 Dividend per share : .2725
 March 2, 2006
 I would recommend holding because the
  success is increasing so the stock price will
  probably go down.
Industry Situation and Company
            ConAgra is a company that has a wide variety of brands and
   offers a wide variety of foods. From reading about the company they
   seem to care about your family. They offer easy, quick, but healthy
 foods. The company focuses on long-term growth. They seem to stress
    that they want to improve relations between their company and its
customers. Also, making processes more productive and streamlining the
  supply chain. (P. 4, Annual Report) They also want to make healthier
              foods for families. (P. 18, Annual Report)
          Income Statement
   ConAgra uses a Multi-Step income statement.

   Financial Highlights Page 5

There was   not a large amount of increases or
decreases. However, the decreases they did have
was that they went down 2,000 employees, the
diluted earnings per share of discontinued operations
went down .14, and net income went down $120.
             Balance Sheet
Balance Sheet   Page 56 Page 56
 The Cash, Other Assets, Notes Payable, and
Current Liabilities of discontinued Operations
all decreased. Accumulated other
Comprehensive Income increased. The
Current Installment on Long Term Debt
changed the most. It decreased about $270.
       Statement of Cash Flows
The cash flows are down about $100 or so from
    the past two years.
The company is not really growing through
    investing activities. However, they did buy
    some furniture and office equipment.
ConAgra’s primary source of financing is through
    long-term loans.
Cash has decreased over the past two years.
          Accounting Policies
Cash and Cash Equivalents:
       All highly liquid investments with a maturity of three months or less at the
       date of acquisition, including short-term time deposits, government agency
       and corporate obligations, are classified as cash and cash equivalents.

       The company primarily uses the lower of cost (determined using the first-in,
       first-out method) or market for valuing inventories not hedged. Grain, flour
       and major feed ingredient inventories are hedged to the extent practicable and
       are primarily stated at market, in including adjustment to market of open
       contracts for purchases and sales.

Property, Plant, and Equipment:
       Carried at cost. Depreciation is calculated using primarily the straight-line
       method over the estimated useful lives.
                   Financial Analysis
                    Liquidity Ratios
 Working Capital: 2005: 2135.1          2004: 2144.8
                 The working capital did not change.
 Current Ratio: 2005: 1.89              2004: 1.80
                 Although the ratio could stand to be higher, it is a decent number to have.
 Receivable Turnover: 2005: 11.23           2004: 13.62 times
                      11.23 is not a bad number to have, but compared to last year’s it is a little
                      on the low side.
 Average days’ sales uncollected: 2005: 32.50             2004: 26.8
                  32.54 days to collect an account may not sound like a lot but
                  compared to last year, the days increasing by 6 is not a good thing.
 Inventory Turnover: 2005: 4.47           2004: 2.18
                  Whatever the company did to make their turnover double, they need to
                  keep the trend going.
 Average Days’ Inventory on hand: 2005: 81.6          2004: 167.43
                  These numbers reflect the turnover rate and it is very impressive that they
                  cut the days in half.
               Financial Analysis
               Profitability Ratios
   Profit margin: 2005: 4.4% 2004: 5.7%
             For every dollar of net sales in 2005, the company made $.04. Even
             though they only decreased by 1 percent. That difference can decide if
             that year was a profitable year or a fair one.
Asset turnover: 2005: 1.08 2004: .96
             The company used their assets more efficiently this year than last.

Return on assets: 2005: 4.8%                        2004: 5.5%
             The assets did not produce as much net income as did last year.

Return on equity: 2005: 6.65%                       2004: 17.1%
             This drop on ROE most likely does not look too good to the investors.
                 Financial Analysis
                  Solvency Ratio
 Debt to    equity: 2005: 1.65
                     2004: 1.97
      In 2004, the ratio was very high. The company’s creditors controlled it.
 In 2005, even though the ratio is still high, they did make an improvement.
 Hopefully it is the beginning of a trend.
       Financial Analysis
      Market Strength Ratios
Price/Earnings per share: 2005: 16.2 times
                                       2004: 18.5 times
           That is relatively low. The investors are not paying very
             much compared to earnings.

Dividend yield:       2005: 1.3% 2004: 1.2%
           The investors should be happy because the amount of
           dividends has been rather constant over the past two

Shared By:
tao peng tao peng fuzhou http://
About 1234567