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Analyzing JM Smucker’s Financial Performance in Processed and Packaged Goods

JM Smucker, founded in 1897 and headquartered in Orrville, Ohio, is a leading name in processed and packaged goods, known for products like jams, peanut butter, Crisco, and coffee. Using the RNEA formula, we calculated JM Smucker’s RNEA for 2013 to be 8.53%. This analysis includes a comparison with key competitors such as Starbucks and Mondelez, and examines profitability and efficiency through Enterprise Profit Margin (EPM) and Enterprise Asset Turnover (EATO). Our assessment relies on parsimonious assumptions to provide insights into the financial standing of JM Smucker and its market positioning.

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Analyzing JM Smucker’s Financial Performance in Processed and Packaged Goods

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  1. JM SmuckerProcessed & Packaged Goods Connor Myers

  2. “With a name like Smucker’s, it has to be good”

  3. Background • Founded in 1897 • Headquartered in Orrville, Ohio • Various Product lines including Jams, Peanut Butter, Crisco and Coffee

  4. Comparable Companies (Processed & Packaged Goods) • Starbucks (SBUX) • Green Mountain Coffee (GMCR) • Mondelez (MDLZ)

  5. RNEA Formula EPAT RNEA = ____________ average NEA -use average NEA because we are not sure of actual timing of investments

  6. RNEA Calculation • For JM Smucker 2013: $603,042 RNEA = ____________ ($7,028,154 + $7,114,737)/2 RNEA 2013 = 8.53%

  7. JM Smucker’s Past RNEA

  8. RNEA of Comparables

  9. Breaking Apart RNEA EPAT Sales RNEA = ______ * _________ Sales avg(NEA) (EPM) (EATO)

  10. Enterprise Profit Margin • EPM = EPAT / Sales • Profit generated by each dollar of sales • General measure of profitability of company

  11. Enterprise Asset Turnover • EATO = Sales / avg(NEA) • Indicates the sales generated by each dollar of NEA • General measure of efficiency of the company

  12. Breaking Apart RNEA EPAT Sales RNEA = ______ * _________ Sales avg(NEA) $603,042 5,897,700 RNEA =________ * __________ 5,897,700($7,028,154 + $7,114,737)/2 10.23% * .834 RNEA = 8.53%

  13. JM Smucker’s EPM

  14. JM Smucker’s EATO

  15. EPM and EATO of Comparables

  16. Parsimonious - Revenues Assume: 6.5%

  17. Parsimonious – EPM Assume: 10%

  18. EATO of Comparables Assume: .80

  19. Parsimonious Assumptions

  20. Parsimonious Assumptions

  21. Parsimonious Assumptions

  22. Parsimonious Assumptions

  23. Questions?

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