Question: Forecasting from Core Income: General Mills (Medium) The following are selected numbers from the income statements reported by General Mills for 2008 and 2007 (dollars in millions):
The firm statutory tax rate at the time was 38.5 percent. Further investigation revealed that operating income was after restructuring charges of $21 million in 2008 and $39 million in 2007.
a. Calculate core income from sales and total core income for both years.
b. The income for 2008 was earned on a base of $12,572 million of net operating assets. What was core RNOA for 2008?
c. What is your best forecast of the operating profit margin and core RNOA for 2009 based on this information?
d. Why would earnings from joint ventures be reported after the tax line on the income statement?