General Mills (NYSE:GIS) ROIC %

: 7.63% (As of Feb. 2023)

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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. General Mills's annualized return on invested capital (ROIC %) for the quarter that ended in Feb. 2023 was 7.63%.

As of today (2023-03-30), General Mills's WACC % is 4.03%. General Mills's ROIC % is 8.47% (calculated using TTM income statement data). General Mills generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.

General Mills ROIC % Historical Data

The historical data trend for General Mills's ROIC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

General Mills Annual Data

Trend

May13

May14

May15

May16

May17

May18

May19

May20

May21

May22

ROIC %

10.07

7.85

8.39

9.02

9.10

General Mills Quarterly Data
	May18	Aug18	Nov18	Feb19	May19	Aug19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23
ROIC %																7.31	11.26	6.92	8.36	7.63

Competitive Comparison

For the Packaged Foods subindustry, General Mills's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Annual Data Quarterly Data

General Mills ROIC % Distribution

For the Consumer Packaged Goods industry and Consumer Defensive sector, General Mills's ROIC % distribution charts can be found below:

* The bar in red indicates where General Mills's ROIC % falls in comparison to its industry or sector. The grey bar indicates the ROIC %'s extreme value range as defined by GuruFocus.

General Mills ROIC % Calculation

General Mills's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in May. 2022 is calculated as:

	ROIC % (A: May. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: May. 2021 )	+	Invested Capital (A: May. 2022 ))	/ count )
=	3255.2 * ( 1 - 18.27% )	/	( (29503.7	+	28981.2)	/ 2 )
=	2660.47496	/	29242.45
=	9.10 %

where

	Invested Capital		(A: May. 2021 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	31841.9	-	4849.5	-	( 1865.2	-	max(0, 8265.8	-	5754.5	+	1865.2	))
=	29503.7

	Invested Capital		(A: May. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	31090.1	-	5039	-	( 819.2	-	max(0, 8019.9	-	5089.8	+	819.2	))
=	28981.2

General Mills's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Feb. 2023 is calculated as:

	ROIC % (Q: Feb. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Nov. 2022 )	+	Invested Capital (Q: Feb. 2023 ))	/ count )
=	2871.6 * ( 1 - 16.57% )	/	( (31174.8	+	31633.9)	/ 2 )
=	2395.77588	/	31404.35
=	7.63 %

where

	Invested Capital		(Q: Nov. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	31319.8	-	4022.6	-	( 644.1	-	max(0, 9208.2	-	5330.6	+	644.1	))
=	31174.8

	Invested Capital		(Q: Feb. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	31199.8	-	3868.2	-	( 618.7	-	max(0, 9418.3	-	5116	+	618.7	))
=	31633.9

Note: The Operating Income data used here is four times the quarterly (Feb. 2023) data.

General Mills (NYSE:GIS) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, General Mills's WACC % is 4.03%. General Mills's ROIC % is 8.47% (calculated using TTM income statement data). General Mills generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases. General Mills earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

General Mills ROIC % Related Terms

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General Mills (NYSE:GIS) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » General Mills Inc (NYSE:GIS) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

GIS:Mexico GRM:Germany G1MI34:Brazil

Address

Number One General Mills Boulevard, Minneapolis, MN, USA, 55426

Website

https://www.generalmills.com

General Mills is a leading global packaged food company that produces snacks, cereal, convenient meals, yogurt, dough, baking mixes and ingredients, pet food, and superpremium ice cream. Its largest brands are Nature Valley, Cheerios, Old El Paso, Yoplait, Pillsbury, Betty Crocker, BLUE, and Haagen-Dazs. In fiscal 2022, 77% of its revenue was derived from the United States, although the company also operates in Canada, Europe, Australia, Asia, and Latin America. While most of General Mills' products are sold through retail stores to consumers, the company also sells products into the food-service channel and the commercial baking industry.

Executives

C Kim Goodwin	director	C/O AKAMAI TECHNOLOGIES, INC., 8 CAMBRIDGE CENTER, CAMBRIDGE MA 02142
Karen Wilson Thissen	officer: General Counsel & Secretary	1098 AMERIPRISE FINANCIAL CENTER, MINNEAPOLIS MN 55474
Paul Joseph Gallagher	officer: Chief Supply Chain Officer	1 GENERAL MILLS BLVD, MINNEAPOLIS MN 55426
Jaime Montemayor	officer: Chief Technology Officer	NUMBER ONE GENERAL MILLS BLVD, MINNEAPOLIS MN 55426
Mark A Pallot	officer: Chief Accounting Officer	NUMBER ONE GENERAL MILLS BLVD, MINNEAPOLIS MN 55426
Jo Ann Jenkins	director	2211 SOUTH 47TH STREET, PHOENIX AZ 85034
Dana M Mcnabb	officer: Group President	NUMBER ONE GENERAL MILLS BLVD, MINNEAPOLIS MN 55426
Elizabeth Cahill Lempres	director	TWO COMMERCE SQUARE, 2001 MARKET STREET, SUITE 3600, PHILADELPHIA PA 19103
Sean N Walker	officer: Group President	NUMBER ONE GENERAL MILLS BLVD, MINNEAPOLIS MN 55426
Diane L Neal	director
Jodi J Benson	officer: Chief Innovation Officer	GENERAL MILLS, INC., ONE GENERAL MILLS BLVD, MINNEAPOLIS MN 55426
Maria Sastre	director	C/O DARDEN RESTAURANTS, INC., 1000 DARDEN CENTER DRIVE, ORLANDO FL 32837
Bishop William W Jr	officer: Group President	C/O BLUE BUFFALO PET PRODUCTS, INC., 11 RIVER ROAD, WILTON CT 06897
Kofi A Bruce	officer: Vice President	GENERAL MILLS, INC., ONE GENERAL MILLS BLVD., MINNEAPOLIS MN 55426
Ivan Pollard	officer: Senior Vice President	GENERAL MILLS, INC., ONE GENERAL MILLS BLVD., MINNEAPOLIS MN 55426