Food Company Tyson Foods, Founded in 1935,

Food Company

Tyson Foods, founded in 1935, is one of the world's largest providers of meat protein, with chicken being the largest product type. Tyson is located in Springdale, Arkansas, but sells in over 90 countries. The company has over 400 facilities worldwide, employing 117,000 people. This presentation will analyze the company's financial performance for the past three years. In general, the figures show that Tyson's performance has improved. The financial figures presented herein were calculated based on the revised financial statements available on MSN Moneycentral.

The recession of 2009 hit Tyson's revenue and more importantly its earnings. However, in 2010 the company recovered. Tyson hit highs for revenue, gross profit, operating profit and net income in 2010. The company is general has remained at roughly the same size for the past several years, which means that financial improvements will largely come from internal improvements such as paying down debt and improving operating efficiency.

Slide 3: Tyson's balance sheet shows that the company decreased in size in 2009, but rebounded with an increase in 2010. More importantly, 2010 saw Tyson add equity value for its shareholders, while reducing its total debt level. The increase in current liabilities is in part due to an increase in the current portion of long-term debt and does not reflect a material decline in the company's liquidity position.

Slide 4: In general, Tyson's ratios have improved over the past couple of years. Although the current ratio is lower in 2010, it remains healthy and that reduction relates to current payment of long-term debt. That long-term debt is not being replaced, so the overall financial health of Tyson is improving. Not shown here are the interim financial statements -- the balance sheet for Q1 of fiscal 2011 shows that the current ratio is moving upward again, indicating that the level shown here is probably a low point for Tyson.

The company's margins are improving as well. In 2008 and 2009, Tyson was earning very slim margins on its products and this was having an impact on profitability. By improving the top-line margin, Tyson improved its bottom-line margin as well, bringing it to a more comfortable level. These margins are acceptable for a company that has a high-volume, low-margin business model, as Tyson does.

Slide 5: Tyson's returns to shareholder have improved significantly over the past two years. The return on assets and return on equity have both improved, as the company lost money in 2009. Earnings per share, which were low in 2008 and negative in 2009, have been restored. In addition, Tyson's operating efficiency has improved significantly over the past three years. All of the turnover ratios have shown steady improvement, even in the weak 2009-year. Remember, improving operating efficiency is one of the most important ways for companies in mature industries to improve, and the evidence shows Tyson is doing just that.