or the foodservice market (1995 SEC 10-K Filing 70).
The raw materials used by the company in its manufacturing include a broad selection of agricultural materials as well as a variety of packaging materials. These products are purchased mainly in the open market, and the company has secured adequate and continuous supplies (1995 SEC 10-K Filing 71).
Over the past two years, Quaker oats has acquired numerous companies, including Snapple, and spent more than $2 billion in the acquisition process. During the same period, the company has sold business units which have contributed significantly to its revenues (including Aunt Jemima and Van Kamp's). The company has also taken $300 million in charges related to restructurings and realignments over the past three years (Rabinowitz 1).
The company's financial position reflects its recent acquisition strategy; as a result, many of the company's key measures (such as current assets) declined from 1994 to 1995 (the latest years for which figures are available). In addition, the company changed from a fiscal year ending in June to a calendar fiscal year during 1995, so the cash flow statement does not reflect the cash at beginning of year and cash at end of year accurately; instead, the cash flow statement reflects these figures for the previous 12 months.
The restructuring charges which the company has taken during the early 1990s are largely behind it, and Quaker Oats should be positioned to move forward in such a way that it is able to make the most of its acquisitions. There is some concern, however, that the company sold off business units which provided strong sources of revenue to the organization, and that the company will have some difficulty in recovering this revenue (Mauboussin 8).
Analysts place the company's beta at .71, indicating that most analysts expect the company to perform worse than the market as a whole (Morningstar 1). Information in the following table...