A Case Study On The Archer Daniels Midland (ADM) Companys Financial Statement Analysis: Strengths And Weaknesses

Abstract

This article is a case study that analyzes the Archer Daniels Midland Company’s financial strengths and weaknesses. The ADM is an agricultural food-processing company located in Decatur, Illinois. The firm’s primary industry segments include oilseeds processing, corn processing, agricultural services and other segments, such as food and feed ingredient businesses and financial activities. The study conducts a ratio analysis that compares the ADM’s key ratios to its two competitors - Corn Products International and Bunge - along with the food-processing industry.  As far as turnover and return ratios are concerned, the firm seems to outperform its competitors and other firms in the industry, although its profit margins are somewhat lower. When current ratio and beta are compared to the industry average, ADM seems to be less risky. The firm has superior future earnings growth prospects in both agriculture food processing and ethanol fuel businesses. Overall, the firm can be a good investment, considering PE and other valuation ratios are considered.