Visit one of the following online resources: Yahoo Finance D&B Hoovers - provide

Question

Visit one of the following online resources:

Yahoo Finance

D&B Hoovers - providers of business and industry data, business analytics etc.

MSU's globalEDGE - a source for international business related resources.

Calculate the following ratios for Hershey Company (Use the template provided)

Liquidity Ratios: 1) Current Ratio 2)Quick Ratio

Leverage Ratios: 1) Debt-to-Total-Assets Ratio 2) Debt-to-Equity Ratio 3) Long-Term 4) Debt-to-Equity Ratio 5) Times-Interest-Earned Ratio

Activity Ratios: 1) Inventory Turnover Fixed Assets 2) Turnover Accounts Receivable 3) Turnover Average Collection Period

Profitability Ratios: 1) Gross Profit Margin 2) Operating Profit Margin 3) Return on Total Assets 4) Return on Stockholders’ Equity 5) Earnings Per Share 6) Price-Earnings Ratio

3) What do the ratios calculated communicate about the financial strengths and weaknesses of Hershey?

4) Based on your calculations, would you invest in Hershey Company, why or why not?

Chart:

*All of the #DIV/0! need to be filled with the answers of the calculations. Please state which source above used to calculate all of the data.  

Income Statement

All numbers in thousands

Balance Sheet

All numbers in thousands

Cash Flow

All numbers in thousands

Historical Ratios Projected Ratios 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 Current Ratio #DIV/0! #DIV/0! Current Ratio #DIV/0! #DIV/0! #DIV/0! Quick Ratio #DIV/0! #DIV/0! Quick Ratio #DIV/0! #DIV/0! #DIV/0! Total Debt-to-Total-Assets Ratio #DIV/0! #DIV/0! Debt-to-Total-Assets Ratio #DIV/0! #DIV/0! #DIV/0! Total Debt-to-Equity Ratio #DIV/0! #DIV/0! Debt-to-Equity Ratio #DIV/0! #DIV/0! #DIV/0! Times-Interest-Earned Ratio #DIV/0! #DIV/0! Times-Interest-Earned Ratio #DIV/0! #DIV/0! #DIV/0! Inventory Turnover #DIV/0! #DIV/0! Inventory Turnover #DIV/0! #DIV/0! #DIV/0! Fixed Assets Turnover #DIV/0! #DIV/0! Fixed Assets Turnover #DIV/0! #DIV/0! #DIV/0! Total Assets Turnover #DIV/0! #DIV/0! Total Assets Turnover #DIV/0! #DIV/0! #DIV/0! Accounts Receivable Turnover #DIV/0! #DIV/0! Accounts Receivable Turnover #DIV/0! #DIV/0! #DIV/0! Average Collection Period #DIV/0! #DIV/0! Average Collection Period #DIV/0! #DIV/0! #DIV/0! Gross Profit Margin % #DIV/0! #DIV/0! Gross Profit Margin % #DIV/0! #DIV/0! #DIV/0! Operating Profit Margin % #DIV/0! #DIV/0! Operating Profit Margin % #DIV/0! #DIV/0! #DIV/0! ROA % #DIV/0! #DIV/0! ROA % #DIV/0! #DIV/0! #DIV/0! ROE % #DIV/0! #DIV/0! ROE % #DIV/0! #DIV/0! #DIV/0!

Explanation / Answer

Formula sheet

A B C D E F G H 2 Income Statement: 3 Revenue 12/31/2017 12/31/2016 12/31/2015 12/31/2014 4 Total Revenue 7,515,426 7,440,181 7,386,626 7,421,768 5 Cost of Revenue 4,065,760 4,224,184 3,987,842 4,083,980 6 Gross Profit 3,449,666 3,215,997 3,398,784 3,337,788 7 Operating Expenses 8 Research Development - 47,268 49,281 47,554 9 Selling General and Administrative 1,896,643 1,846,894 1,889,241 1,834,513 10 Non Recurring - - - - 11 Others - - - - 12 Total Operating Expenses 5,962,403 6,118,346 5,926,364 5,966,047 13 Operating Income or Loss 1,553,023 1,321,835 1,460,262 1,455,721 14 Income from Continuing Operations 15 Total Other Income/Expenses Net -442,355 -222,354 -558,415 -149,678 16 Earnings Before Interest and Taxes 1,553,023 1,321,835 1,460,262 1,455,721 17 Interest Expense -98,282 -91,948 -109,309 -87,598 18 Income Before Tax 1,110,668 1,099,481 901,847 1,306,043 19 Income Tax Expense 354,131 379,437 388,896 459,131 20 Minority Interest - 41,831 49,465 64,468 21 Net Income From Continuing Ops 756,537 720,044 512,951 846,912 22 Non-recurring Events 23 Discontinued Operations - - - - 24 Extraordinary Items - - - - 25 Effect Of Accounting Changes - - - - 26 Other Items - - - - 27 Net Income 28 Net Income 782,981 720,044 512,951 846,912 29 Preferred Stock And Other Adjustments - - - - 30 Net Income Applicable To Common Shares 782,981 720,044 512,951 846,912 31 32 Balance sheet 33 Period Ending 12/31/2017 12/31/2016 12/31/2015 12/31/2014 34 Current Assets 35 Cash And Cash Equivalents 380,179 296,967 346,529 374,854 36 Short Term Investments - - - 97,131 37 Net Receivables 588,262 581,381 599,073 634,800 38 Inventory 752,836 745,678 750,970 801,036 39 Other Current Assets - - - 147,573 40 Total Current Assets 2,001,910 1,816,778 1,848,598 2,247,047 41 Long Term Investments - - - - 42 Property Plant and Equipment 2,106,697 2,177,248 2,240,460 2,151,901 43 Goodwill 821,061 812,344 684,252 792,955 44 Intangible Assets 369,156 588,038 447,309 358,093 45 Accumulated Amortization - - - - 46 Other Assets 254,902 129,925 123,752 72,874 47 Deferred Long Term Asset Charges 3,023 56,861 36,390 - 48 Total Assets 5,553,726 5,524,333 5,344,371 5,622,870 49 Current Liabilities 50 Accounts Payable 523,229 522,536 474,266 482,017 51 Short/Current Long Term Debt 2,920,480 2,980,169 2,460,826 2,177,818 52 Other Current Liabilities 17,723 3,207 95,268 103,500 53 Total Current Liabilities 2,076,543 1,909,443 2,217,912 1,935,647 54 Long Term Debt 2,061,023 2,347,455 1,597,390 1,542,317 55 Other Liabilities 484,595 439,748 481,607 625,376 56 Deferred Long Term Liability Charges - - - - 57 Minority Interest - 41,831 49,465 64,468 58 Negative Goodwill - - - - 59 Total Liabilities 4,622,161 4,696,646 4,296,909 4,103,340 60 Stockholders' Equity 61 Misc. Stocks Options Warrants - - - - 62 Redeemable Preferred Stock - - - - 63 Preferred Stock - - - - 64 Common Stock 931,565 359,901 359,901 359,901 65 Retained Earnings - 6,115,961 5,897,603 5,860,784 66 Treasury Stock - -6,559,863 -6,043,384 -5,519,809 67 Capital Surplus - 869,857 783,877 754,186 68 Other Stockholder Equity - -375,888 -371,025 -358,573 69 Total Stockholder Equity 931,565 785,856 997,997 1,455,062 70 Net Tangible Assets -258,652 -614,526 -133,564 304,014 71 72 73 Ratios 74 12/31/2017 12/31/2016 12/31/2015 12/31/2014 75 Current Ratio =Current Assets/ Current Liabilities 0.964059015 0.951470141 0.833485729 1.160876441 76 Quick Ratio = (Cash +Marketable Security+Acc. Rec.)/Current Liabilities 0.466371753 0.46000221 0.426347844 0.521610604 77 Total Debt-to-Total-Assets Ratio 0.896965929 0.964392262 0.75934399 0.661607862 78 Total Debt-to-Equity Ratio 5.347456162 6.779389608 4.066360921 2.55668487 79 Times-Interest-Earned Ratio 15.80170326 14.37589725 13.35902808 16.61819905 80 Inventory Turnover 5.426389076 5.644859713 5.138951782 81 Fixed Assets Turnover 3.508647287 3.368344399 3.363396588 82 Total Assets Turnover 1.356812777 1.369101781 1.3470345 83 Accounts Receivable Turnover 12.85080319 12.60562631 11.9730734 84 Average Collection Period 28.40289393 28.95532447 30.4850716 85 Gross Profit Margin % 0.459011372 0.432247146 0.460126721 0.449729498 86 Operating Profit Margin % 0.206644707 0.177661672 0.197689987 0.196142078 87 ROA % 0.141357073 0.132498594 0.093542396 88 ROE % 0.911810208 0.807290735 0.418213341 89

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