Kellogg Company is the world’s leading producer of ready-to-eat cereal products.

Question

Kellogg Company is the world’s leading producer of ready-to-eat cereal products. In recent years, the company has taken numerous steps aimed at improving its profitability and earnings per share. Presented below are some basic facts for Kellogg.

(c1)

Calculate the ratio of debt to assets for 2010 and 2011. (Round answers to 2 decimal places, e.g. 52.75.)

2011 2010 Net sales $13,198 $12,397 Net income 1,229 1,240 Total assets 11,901 11,847 Total liabilities 10,139 9,693 Common stock, $0.25 par value 105 105 Capital in excess of par value 522 495 Retained earnings 6,721 6,122 Treasury stock, at cost 3,130 2,650 Number of shares outstanding (in millions) 357 366

Explanation / Answer

Debt to Asset Ratio = Total liabilities/Total assets

This ratio tells that how much of a company's asset is financed by external sources i.e debt.

Particulars 2011 2010 A Total asset 11901 11847 B Total liabilities 10139 9693 C Ratio of debt to asset (B/A) 0.85 0.82

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