Posted: April 7th, 2013

GRUMA and BIMBO

1. Read the appropriate sections of GRUMA’s and Bimbo’s annual reports so that you have an understanding about the companies´ strategies for the future, their position in their industries, presence worldwide and how the current global recession may have affected them. (It is important that you do this before analyzing the financial statements). 

2. Prepare the common-size and trend analyses for the balance sheets and income statements for the last 5 years of data.
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3. Calculate the financial ratios included in chapter 5 (except for the operating cash flow to total liabilities) and the ratio of TOTAL LIABILITIES/TOTAL EQUITY for the last 5 years of data presented. For your calculations, assume a tax rate of 30%. The ratios that should be included are:
a. ROA
b. ROE (or ROCE)
c. Current ratio
d. Quick ratio
e. Turnovers: Receivables, Inventory and Payables (In times and days)
f. LTD to Assets
g. LTD to Tangible assets
h. Interest coverage
i. Total liabilities/Total equity
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4. Prepare a report with the interpretation of the common-size and trend analyses, and your interpretation for the trends of the ratios you calculated for each of the main categories of ratios we discussed: Liquidity (Including cash conversion cycle), Solvency and Profitability. Finally, compare your results from both companies, giving pros and cons for both companies, strengths and weaknesses, and your opinion of the future performance of these companies for the next 2 years.(The report of #4 should be at least three pages long)


What you need to turn in is the printout of your results for #2, 3 and 4. 
Finally, keep in mind that you are using real data from a public company. If you cannot find the specific account you need for the formula, think about a good proxy that you could use (i.e. using net sales instead of net credit sales). Remember we said that in the database you will find “suppliers” instead of Accounts payable, and you will find “financial expenses” instead of interest expense…..CLICK HERE TO GET MORE ON THIS PAPER!!!!