ConAgra Foods, Inc Bryna Fugate ACG

Executive Summary  The company needs to raise their net income.  One good point is that they reduced the time they have inventory on hand.  They are slowly improving there Debt to Equity Ratio.  With their future plans and good outlook I feel that they are on the right track to improving there company and its numbers.  2005 Annual Report 2005 Annual Report

The Company  Bruce Rhode, Chairman and Executive Officer  Home Office: One ConAgra Drive Omaha, NE  The ending date of the last fiscal year was May 29,  ConAgra has three segments: Retail, Foodservice, and Food Ingredients. Some of the company’s products include: Processed prepared meats, condiments, cooking products, frozen entrees and side dishes, and cooking ingredients.  ConAgra is a global company but its main distribution is in the United States.

Audit Report Deloitte and Touch LLP Omaha, NE The statements are accurate in stating the position of the company. Also, they changed its method of accounting for variable interest entities and asset retirement obligations in It also changed its methods of accounting for goodwill and other intangible assets in 2003.

Stock Market Information  Stock Price :  Twelve month trading range: $  Dividend per share :.2725  March 2, 2006  I would recommend holding because the success is increasing so the stock price will probably go down.

Industry Situation and Company Plans ConAgra is a company that has a wide variety of brands and offers a wide variety of foods. From reading about the company they seem to care about your family. They offer easy, quick, but healthy foods. The company focuses on long-term growth. They seem to stress that they want to improve relations between their company and its customers. Also, making processes more productive and streamlining the supply chain. (P. 4, Annual Report) They also want to make healthier foods for families. (P. 18, Annual Report)

Income Statement ConAgra uses a Multi-Step income statement. Financial Highlights Page 5 There was not a large amount of increases or decreases. However, the decreases they did have was that they went down 2,000 employees, the diluted earnings per share of discontinued operations went down.14, and net income went down $120.

Balance Sheet  Balance Sheet Page 56 Page 56 Balance Sheet Page 56  The Cash, Other Assets, Notes Payable, and Current Liabilities of discontinued Operations all decreased. Accumulated other Comprehensive Income increased. The Current Installment on Long Term Debt changed the most. It decreased about $270.

Statement of Cash Flows  The cash flows are down about $100 or so from the past two years.  The company is not really growing through investing activities. However, they did buy some furniture and office equipment.  ConAgra’s primary source of financing is through long-term loans.  Cash has decreased over the past two years.

Accounting Policies  Cash and Cash Equivalents: All highly liquid investments with a maturity of three months or less at the date of acquisition, including short-term time deposits, government agency and corporate obligations, are classified as cash and cash equivalents.  Inventories: The company primarily uses the lower of cost (determined using the first-in, first-out method) or market for valuing inventories not hedged. Grain, flour and major feed ingredient inventories are hedged to the extent practicable and are primarily stated at market, in including adjustment to market of open contracts for purchases and sales.  Property, Plant, and Equipment : Carried at cost. Depreciation is calculated using primarily the straight-line method over the estimated useful lives.

Financial Analysis Liquidity Ratios  Working Capital : 2005: : The working capital did not change.  Current Ratio: 2005: : 1.80 Although the ratio could stand to be higher, it is a decent number to have.  Receivable Turnover: 2005: : times is not a bad number to have, but compared to last year’s it is a little on the low side.  Average days’ sales uncollected: 2005: : days to collect an account may not sound like a lot but compared to last year, the days increasing by 6 is not a good thing.  Inventory Turnover: 2005: : 2.18 Whatever the company did to make their turnover double, they need to keep the trend going.  Average Days’ Inventory on hand: 2005: : These numbers reflect the turnover rate and it is very impressive that they cut the days in half.

Financial Analysis Profitability Ratios Financial Analysis Profitability Ratios  Profit margin: 2005: 4.4%2004: 5.7% For every dollar of net sales in 2005, the company made $.04. Even though they only decreased by 1 percent. That difference can decide if that year was a profitable year or a fair one.  Asset turnover: 2005: :.96 The company used their assets more efficiently this year than last.  Return on assets: 2005: 4.8%2004: 5.5% The assets did not produce as much net income as did last year.  Return on equity: 2005: 6.65%2004: 17.1% This drop on ROE most likely does not look too good to the investors.

Financial Analysis Solvency Ratio  Debt to equity: 2005: : 1.97 In 2004, the ratio was very high. The company’s creditors controlled it. In 2005, even though the ratio is still high, they did make an improvement. Hopefully it is the beginning of a trend.

Financial Analysis Market Strength Ratios  Price/Earnings per share: 2005: 16.2 times 2004: 18.5 times That is relatively low. The investors are not paying very much compared to earnings.  Dividend yield: 2005: 1.3% 2004: 1.2% The investors should be happy because the amount of dividends has been rather constant over the past two years.