The financial statements of The Hershey Company and Tootsie Roll are presented b
ID: 2454475 • Letter: T
Question
The financial statements of The Hershey Company and Tootsie Roll are presented below.
The notes to consolidated financial statements are an integral part of these statements and are included in the Hershey's 2011 Annual Report, available at www.thehersheycompany.com.
CONSOLIDATED STATEMENTS OF
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Cash Flows (in thousands)
Impairment of equity method investment
Loss from equity method investment
Amortization of marketable security premiums
Changes in operating assets and liabilities:
Accounts receivable
Other receivables
Inventories
Prepaid expenses and other assets
Accounts payable and accrued liabilities
Income taxes payable and deferred
Postretirement health care and life insurance benefits
Deferred compensation and other liabilities
Others
Capital expenditures
Net purchase of trading securities
Purchase of available for sale securities
Sale and maturity of available for sale securities
Net cash used in investing activities
Shares repurchased and retired
Dividends paid in cash
Net cash used in financing activities
Income taxes paid
Interest paid
Stock dividend issued
Based on the information in these financial statements, compute the 2011 return on common stockholders’ equity, debt to assets ratio, and return on assets for each company. (Round answers to 1 decimal places, e.g. 15.2%.)
Compute the payout ratio for each company. Which pays out a higher percentage of its earnings? (Round answers to 1 decimal places, e.g. 15.2%.)
%
THE HERSHEY COMPANYCONSOLIDATED STATEMENTS OF INCOME For the years ended December 31, 2011 2010 2009 In thousands of dollars except per share amounts Net Sales $6,080,788 $5,671,009 $5,298,668 Costs and Expenses: Cost of sales 3,548,896 3,255,801 3,245,531 Selling, marketing and administrative 1,477,750 1,426,477 1,208,672 Business realignment and impairment (credits) charges, net (886 ) 83,433 82,875 Total costs and expenses 5,025,760 4,765,711 4,537,078 Income before Interest and Income Taxes 1,055,028 905,298 761,590 Interest expense, net 92,183 96,434 90,459 Income before Income Taxes 962,845 808,864 671,131 Provision for income taxes 333,883 299,065 235,137 Net Income $628,962 $509,799 $435,994 Net Income Per Share—Basic—Class B Common Stock $2.58 $2.08 $1.77 Net Income Per Share—Diluted—Class B Common Stock $2.56 $2.07 $1.77 Net Income Per Share—Basic—Common Stock $2.85 $2.29 $1.97 Net Income Per Share—Diluted—Common Stock $2.74 $2.21 $1.90 Cash Dividends Paid Per Share: Common Stock $1.3800 $1.2800 $1.1900 Class B Common Stock 1.2500 1.1600 1.0712
The notes to consolidated financial statements are an integral part of these statements and are included in the Hershey's 2011 Annual Report, available at www.thehersheycompany.com.
THE HERSHEY COMPANYCONSOLIDATED BALANCE SHEETS December 31, 2011 2010 In thousands of dollars ASSETS Current Assets: Cash and cash equivalents $693,686 $884,642 Accounts receivable—trade 399,499 390,061 Inventories 648,953 533,622 Deferred income taxes 136,861 55,760 Prepaid expenses and other 167,559 141,132 Total current assets 2,046,558 2,005,217 Property, Plant and Equipment, Net 1,559,717 1,437,702 Goodwill 516,745 524,134 Other Intangibles 111,913 123,080 Deferred Income Taxes 38,544 21,387 Other Assets 138,722 161,212 Total assets $4,412,199 $4,272,732 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $420,017 $410,655 Accrued liabilities 612,186 593,308 Accrued income taxes 1,899 9,402 Short-term debt 42,080 24,088 Current portion of long-term debt 97,593 261,392 Total current liabilities 1,173,775 1,298,845 Long-term Debt 1,748,500 1,541,825 Other Long-term Liabilities 617,276 494,461 Total liabilities 3,539,551 3,335,131 Commitments and Contingencies — — Stockholders’ Equity: The Hershey Company Stockholders’ Equity Preferred Stock, shares issued: none in 2011 and 2010 — — Common Stock, shares issued: 299,269,702 in 2011 and 299,195,325 in 2010 299,269 299,195 Class B Common Stock, shares issued: 60,632,042 in 2011 and 60,706,419 in 2010 60,632 60,706 Additional paid-in capital 490,817 434,865 Retained earnings 4,699,597 4,374,718 Treasury—Common Stock shares, at cost: 134,695,826 in 2011 and 132,871,512 in 2010 (4,258,962 ) (4,052,101 ) Accumulated other comprehensive loss (442,331 ) (215,067 ) The Hershey Company stockholders’ equity 849,022 902,316 Noncontrolling interests in subsidiaries 23,626 35,285 Total stockholders’ equity 872,648 937,601 Total liabilities and stockholders’equity $4,412,199 $4,272,732
Explanation / Answer
Hershey Company
Return on common stockholders’ equity = Net Income/(Average Stock holders Equity)
Return on common stockholders’ equity = 628962/((872648+937601)/2)
Return on common stockholders’ equity = 69.49%
Debt to assets = Total Liability/Total Asset
Debt to assets = 3539551/4412199
Debt to assets = 80.22%
Return on assets = Net Income/ Average Total Asset
Return on assets = 628962/((4412199+4272732)/2)
Return on assets = 14.48%
Payout ratio = (Cash Dividend+ stock dividend)/Net Income
Payout ratio =304083/628962
Payout ratio = 4.83%
Tootsie Roll
Return on common stockholders’ equity = Net Income/(Average Stock holders Equity)
Return on common stockholders’ equity = 43938/((665935+667408)/2)
Return on common stockholders’ equity = 6.59%
Debt to assets = Total Liability/Total Asset
Debt to assets = (133566+58355)/857856
Debt to assets = 22.37%
Return on assets = Net Income/ Average Total Asset
Return on assets = 43938/((857856+857959)/2)
Return on assets = 5.12%
Payout ratio = (Cash Dividend+ stock dividend)/Net Income
Payout ratio = (18360+47175)/43938
Payout ratio = 149.15%
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.