.67.5Inventory Turnover in Days48.475449.6619263849Operating Cycle79.870481.7979507086When comparing Kellogg’s 1997 A/R turnover to 1998 it has increased by .26x moving it slightly past the industry average. Even though inventory turnover is slightly behind industry averages it is also showing a positive trend by increasing .18x for 1997. A decrease in the operating cycle is yet another sign that Hasbro is increasing efficiency.Leverage:LEVERAGE19971996PeerDebt Ratio79.50%74.60%53%Equity Ratio20.40%25.40%47%Debt/Equity Ratio389.00%293.00%112%Kellogg’s has increased their leverage, which is illustrated by a 4.9% increase in the debt ratio for 1997. Kellogg’s is well above its industry average in 1997 and 1996 when looking at the debt ratio, which indicates the firms long-term debt-paying ability. An increase of 96% in the Debt/Equity ratio also shows how Kellogg’s has been increasing their leverage through an increase in debt mainly contributed to a large increase of $688,700,000 in long-term debt. The reasons for increases in debt are due to Kellogg’s issuance of two $500,000,000 Euro-Dollar notes.Profitability:PROFITABILITY19971996PeerGross Profit Margin52.12%53.20%50.60%Net Profit Margin 7.99 7.9522.20%Total Asst. Turnover7.527.347.03ROA1.821.733.5Equity Multiple4.893.932.13Dupont ROE5.474.14%7.7The Company's gross profit margin for the year is down 1.08% when compared to last year. Kellogg’s is slightly above the industry average by 1.52%. One way in which Kellogg’s was able to help increase margins was by lowering selling and administrating expenses by $91,900,000 for 1997. Kellogg’s total asset turnover has increased by .18 along with a .09% increase in ROA indicates that their ability to generate sales through the use of their assets is increasing. When compared to the industry average Kellogg’s ROA is 1.68% less. The Dupont ROE and equit...
