Copyright

Page 1

The Super ProjectHarvard Business School Case 112-034Case Software 2-298-723

Copyright © 1997 by the President and Fellows of Harvard College

This case was prepared as the basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation.

Exhibit 1

Page 2

April 1, 1967 ($ millions)

AssetsCash $20Marketable securities 89Receivables 180Inventories 261Prepaid expenses 14 Current assets 564Land, buildings, equipment (at cost, less depreciation) 332Long-term receivables and sundry assets 7Goodwill 26 Total $929

Liabilities and Stockholders' EquityNotes payable $22Accounts payable 86Accrued liabilities 73Accrued income taxes 57 Current liabilities 238Long-term notes 393-3/8% debentures 22Other noncurrent liabilities 10Deferred investment tax credit 9Stockholders' equity Common stock issued 164 Retained earnings 449 Common stock held in treasury, at cost (2)Stockholders' equity 611 Total $929

Common stock—shares outstanding at year-end (millions) 25.127

Exhibit 1 Consolidated Balance Sheet of General Foods Corporation, Fiscal Year Ended

Exhibit 1

Page 3

Consolidated Balance Sheet of General Foods Corporation, Fiscal Year Ended

Exhibit 2

Page 4

Year Low High

1958 $24 $391959 37-1/8 53-7/81960 49-1/8 75-1/21961 68-5/8 1071962 57 961963 77-5/8 90-1/21964 78-1/4 93-1/41965 77-1/2 89-7/81966 62 831967 65-1/4 81

Exhibit 2 Common Stock Prices of General Foods Corporation, 1958-1967

Exhibit 3

Page 5

1958 1959 1960 1961 1962 1963 1964 1965 1966 1967

Income StatementSales to customers (net) $1,009 $1,053 $1,087 $1,160 $1,189 $1,216 $1,338 $1,478 $1,555 $1,652Cost of sales 724 734 725 764 769 769 838 937 965 1,012Marketing, administrative and general expense 181 205 236 261 267 274 322 362 406 449Earnings before income taxes 105 115 130 138 156 170 179 177 185 193Taxes on income 57 61 69 71 84 91 95 91 91 94Net earnings $48 $54 $61 $67 $72 $79 $84 $86 $94 $99

Dividends on common shares 24 28 32 35 40 45 50 50 53 55Retain earnings—current year 24 26 29 32 32 34 34 36 41 44

$1.99 $2.21 $2.48 $2.69 $2.90 $3.14 $3.33 $3.44 $3.73 $3.93

1.00 1.15 1.30 1.40 1.60 1.80 2.00 2.00 2.10 2.20

Assets, Liabilities, and Stockholders' EquityInventories 169 149 154 189 183 205 256 214 261 261Other current assets 144 180 200 171 204 206 180 230 266 303Current liabilities 107 107 126 123 142 162 202 173 219 238Working capital 206 222 230 237 245 249 234 271 308 326Land, buildings, equipment, gross 203 221 247 289 328 375 436 477 517 569Land, buildings, equipment, net 125 132 148 173 193 233 264 283 308 332Long-term debt 49 44 40 37 35 34 23 37 54 61Stockholders' equity 287 315 347 384 419 454 490 527 569 611

11.78 12.87 14.07 15.46 16.8 18.17 19.53 20.99 22.64 24.32

Capital ProgramCapital additions 28 24 35 40 42 57 70 54 65 59Depreciation 11 14 15 18 21 24 26 29 32 34

Employment DataWages, salaries, and benefits $128 $138 $147 $162 $171 $180 $195 $204 $218 $237Number of employees (in thousands) 21 22 22 25 28 28 30 30 30 32Assets per employee ($ thousands) $21 $22 $23 $22 $22 $23 $24 $25 $29 $29

Exhibit 3 Summary of Statistical Data of General Foods Corporation, Fiscal Year 1958-1967 ($ millions, except assets per employee and figures on a share basis)

Net earnings per common sharea

Dividends per common sharea

Stockholders' equity per common sharea

aPer-share figures calculated on shares outstanding at year-end and adjusted for 2-for-1 stock split in August 1960.

Exhibit 3

Page 6

Summary of Statistical Data of General Foods Corporation, Fiscal Year 1958-1967 ($ millions, except assets per employee and figures on a share basis)