Jonathan Rogers
5-1 activity Capital Management
FIN-320 Principles of Finance
November 28, 2021
Financial Statements:
To calculate the working capital of a business we will need to calculate the difference between
the business's current assets and current liabilities for a fiscal year. By utilizing the companies
balance sheet we will determine all other information based on Liquidity. However; Kelloggs
working capital is calculated by the company's efficiency and operating liquidity. The working
capital is usually determined by subtracting the current liabilities from the current assets. Which
is essentially a rectification that gives the organization the ability to continue it's normal
operation without any variances or occurrences.
In saying that, 1st we must determine what Financial Statements consist of which is essentially
records of financial activities and the financial status of a business, person, or entity.
Kellogg Co., 10/02/21 accounting period:
The current assets = 3.24 B
current liabilities = 5.74 B
Working Capital = Current assets - total liabilities
Therefore, Kellogg Co., working capital would be 3,024,000,000 - 5,074,000,000 =
2,050,000,000
To determine the company financial health, we would need to utilize the working capitol ratio
formula, which Current Assets/Current Liabilities
Kellogg's working capital ratio is 3.24B/5.74B which is equal to 0.59
Working Capital Interpretation:
Working capital measures, the difference between current assets and current liabilities. However:
Kellogg Working Capital is decreasing with stable movements from year to year. Working
Capital is estimated to finish at -1,731,578,947 this year. For the period between 2010 and 2021,
Kellogg, Working Capital quarterly trend regression had mean deviation of 526,602,339 and r-
value of (0.28) Kellogg Returns is increasing as compared to previous years. The last year's
value of Revenues was reported at 13.77 Billion. Cited Work;
(https://www.macroaxis.com/financial-statements/K/Working-Capital)
Working Capitals Role:
"Most indicators from Kellogg Co., fundamental ratios are interrelated and interconnected.
However, analyzing fundamental ratios indicators one by one will only give a small insight into
Kellogg Company current financial condition. On the other hand, looking into the entire matrix
of fundamental ratios indicators, and analyzing their relationships over time can provide a more
complete picture of the company financial strength now and in the future."
CitedWork;(https://www.macroaxis.com/invest/symbolRatiosCompareOverTime/K?r1=Invested.
Capital&r2=Working-Capital)
Working capital management direction:
To distinguish a clearer picture of the direction of which Kelloggs is going we can distinguish
that the changes in the network capital will have to be rectified first.
References:
Mergent(2021)https://www-mergentonline-com.ezproxy.snhu.edu/companydetail.php?
compnumber=4686