FINANCIAL STATEMENT

Financial Statement Analysis

Financial Statement Analysis

The paper attempts to discuss about various financial aspects of credit analysis in a holistic context. It analyzes the credit position of Kraft Foods Inc., which is the selected organization for credit analysis. The paper first provides with relevant information about the company selected including its background, vision and briefs about market position. It then describes as to what the credit analysis is and explains as to how the process of credit analysis can be carried out. The paper then proceeds onto the credit analysis of Kraft Foods Inc. by calculating the four major selected ratios that include current ratio, quick ratio, and debt to equity ratio and net profit to sales ratio. The reasons for selecting precisely these ratios are mentioned and all four ratios for Kraft Foods Inc. are calculated for the years 2008, 2009 and 2010. The paper then proceeds onto analysing and interpreting these ratios to determine the credit worthiness of Kraft Foods Inc. The paper is a concise yet comprehensive presentation of the credit analysis of Kraft Foods Inc. It also attempts to uncover the various aspects of financial management and includes the analysis of ratios for better and accurate interpretation of the situation prevailing in Kraft Foods Inc. as it appears in the information that has been provided.

Company Description

The Company considers its founding date of the establishment of the cheese business selling wholesale, created by James L. Kraft in Chicago in 1903. In 2000, Kraft had its business around the world except Europe. In September 2006, Kraft Foods Inc. acquired the European business of United Biscuits and the rights to key Nabisco trademarks in Europe, Middle East and Africa, including Oreo, Ritz and Chips Ahoy. Kraft Foods Inc. became a fully independent company on March 30, 2007, and is included in the Standard & Poor's 100 and 500. The company is a member of the Dow Jones Sustainability Index and the Ethibel Sustainability Index. Today, Kraft Foods Inc. has about 90,000 employees and is one of the largest food and beverage companies in the world, with annual revenues of more than 34,000 million dollars and a broad portfolio of iconic brands marketed in 155 countries (Hisrich et al., 2005). Kraft Foods Inc. wants to be for them the "Preferred Partner" by establishing relationships with them honest, stable and lasting, fulfilling the commitments undertaken strictly in terms of service and quality so that products reach shelves in excellent condition and are supported through advertising and promotions that make them more attractive to consumers (Brigham, 2012). Competitive advantage in Kraft Foods Inc. has a longstanding commitment to its goals. This forms a solid foundation to improve and make us move forward with enthusiasm, working together toward a common goal that represents the essence of Kraft Foods Inc. making it competent. “Kraft Foods Inc.” competitive edge is their clever incorporation of flavours and taste (KraftFoods, 2012).

Credit Analysis Concept

In the process of credit analysis phase, all records concerning client eligibility as a potential subject of credit have to be ...