Ratios Analysis: Hershey The Hershey Company is one of the world's leading producers of chocolates, candies, and confections. It sells chocolates and candies, mints and gums, baking ingredients, toppings, and beverages. Hershey's consolidated balance sheets for 20X2 and 20X3 follow. Hershey: Consolidated Balance Sheets Dollar Amounts in Millions 20X2 20X3 Assets Current Assets Cash and Equivalents $728.3 $1,118.5 Receivables 461.4 477.9 Inventories 633.3 659.5 Deferred Income Taxes 122.2 52.5 Prepaid Expenses and Other Assets 168.3 178.9 Total Current Assets $2,113.5 $2,487.3 Property, Plant and Equipment, Net 1,674.1 1,805.3 Goodwill 588.0 576.6 Other Intangible Assets, net 214.7 195.2 Other Assets 164.5 293.0 Total Assets $4,754.8 $5,357.5 Liabilities and Shareholders' Equity Current Liabilities Accounts Payable $442.0 $461.5 Accrued Liabilities 650.9 699.7 Accrued Income Taxes 2.3 79.9 Short-Term Debt 118.2 166.0 Current Portion of Long-Term Debt 257.7 0.9 Total Current Liabilities $1,471.1 $1,408.0 Long-Term Debt 1,531.0 1,795.1 Other Long-Term Liabilities 668.7 434.1 Deferred Income Taxes 35.7 104.2 Total Liabilities $3,706.5 $3,741.4 Shareholders' Equity Common Stock 359.9 359.9 Additional Paid-In Capital 593.0 664.9 Retained Earnings 5,027.6 5,454.3 Treasury Stock (at cost) (4,558.7) (4,707.7) Accumulated Other Comprehensive Loss (385.1) (166.6) Noncontrolling interests 11.6 11.2 Total Shareholders' Equity $1,048.4 $1,616.1 Total Liabilities and Shareholders' Equity $4,754.8 $5,357.5 Additional information for 20X3 is as follows (amounts in millions): Total credit sales (all on credit) $7,146.1 Costs of goods sold 3,865.2 Net income 820.5 Required: Next Level Compute the following ratios for 20X3. Provide a brief description of what each ratio reveals about Hershey. Return on common equity (Round your answer to three decimal places.) Debt-to-assets (Round your answer to three decimal places.) Debt-to-equity (Round your answer to two decimal places.) Current (Round your answer to two decimal places.) Quick (Round your answer to two decimal places.) Inventory turnover days (Use 365 days. Round your answer to nearest whole number.) days Accounts receivable turnover days (Use 365 days. Round your answer to nearest whole number.) days Accounts payable turnover days (Use 365 days. Round your answer to nearest whole number.) days Operating cycle (in days) (Use 365 days. Round your answer to nearest whole number.) days Total asset turnover (Round your answer to two decimal places.)

Ratios Analysis: Hershey The Hershey Company is one of the world's leading producers of chocolates, candies, and confections. It sells chocolates and candies, mints and gums, baking ingredients, toppings, and beverages. Hershey's consolidated balance sheets for 20X2 and 20X3 follow. Hershey: Consolidated Balance Sheets Dollar Amounts in Millions 20X2 20X3 Assets Current Assets Cash and Equivalents $728.3 $1,118.5 Receivables 461.4 477.9 Inventories 633.3 659.5 Deferred Income Taxes 122.2 52.5 Prepaid Expenses and Other Assets 168.3 178.9 Total Current Assets $2,113.5 $2,487.3 Property, Plant and Equipment, Net 1,674.1 1,805.3 Goodwill 588.0 576.6 Other Intangible Assets, net 214.7 195.2 Other Assets 164.5 293.0 Total Assets $4,754.8 $5,357.5 Liabilities and Shareholders' Equity Current Liabilities Accounts Payable $442.0 $461.5 Accrued Liabilities 650.9 699.7 Accrued Income Taxes 2.3 79.9 Short-Term Debt 118.2 166.0 Current Portion of Long-Term Debt 257.7 0.9 Total Current Liabilities $1,471.1 $1,408.0 Long-Term Debt 1,531.0 1,795.1 Other Long-Term Liabilities 668.7 434.1 Deferred Income Taxes 35.7 104.2 Total Liabilities $3,706.5 $3,741.4 Shareholders' Equity Common Stock 359.9 359.9 Additional Paid-In Capital 593.0 664.9 Retained Earnings 5,027.6 5,454.3 Treasury Stock (at cost) (4,558.7) (4,707.7) Accumulated Other Comprehensive Loss (385.1) (166.6) Noncontrolling interests 11.6 11.2 Total Shareholders' Equity $1,048.4 $1,616.1 Total Liabilities and Shareholders' Equity $4,754.8 $5,357.5 Additional information for 20X3 is as follows (amounts in millions): Total credit sales (all on credit) $7,146.1 Costs of goods sold 3,865.2 Net income 820.5 Required: Next Level Compute the following ratios for 20X3. Provide a brief description of what each ratio reveals about Hershey. Return on common equity (Round your answer to three decimal places.) Debt-to-assets (Round your answer to three decimal places.) Debt-to-equity (Round your answer to two decimal places.) Current (Round your answer to two decimal places.) Quick (Round your answer to two decimal places.) Inventory turnover days (Use 365 days. Round your answer to nearest whole number.) days Accounts receivable turnover days (Use 365 days. Round your answer to nearest whole number.) days Accounts payable turnover days (Use 365 days. Round your answer to nearest whole number.) days Operating cycle (in days) (Use 365 days. Round your answer to nearest whole number.) days Total asset turnover (Round your answer to two decimal places.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ratios Analysis: Hershey

The Hershey Company is one of the world's leading producers of chocolates, candies, and confections. It sells chocolates and candies, mints and gums, baking ingredients, toppings, and beverages. Hershey's consolidated balance sheets for 20X2 and 20X3 follow.

Hershey: Consolidated Balance Sheets
	Dollar Amounts in Millions
	20X2	20X3
Assets
Current Assets
Cash and Equivalents	$728.3	$1,118.5
Receivables	461.4	477.9
Inventories	633.3	659.5
Deferred Income Taxes	122.2	52.5
Prepaid Expenses and Other Assets	168.3	178.9
Total Current Assets	$2,113.5	$2,487.3
Property, Plant and Equipment, Net	1,674.1	1,805.3
Goodwill	588.0	576.6
Other Intangible Assets, net	214.7	195.2
Other Assets	164.5	293.0
Total Assets	$4,754.8	$5,357.5
Liabilities and Shareholders' Equity
Current Liabilities
Accounts Payable	$442.0	$461.5
Accrued Liabilities	650.9	699.7
Accrued Income Taxes	2.3	79.9
Short-Term Debt	118.2	166.0
Current Portion of Long-Term Debt	257.7	0.9
Total Current Liabilities	$1,471.1	$1,408.0
Long-Term Debt	1,531.0	1,795.1
Other Long-Term Liabilities	668.7	434.1
Deferred Income Taxes	35.7	104.2
Total Liabilities	$3,706.5	$3,741.4
Shareholders' Equity
Common Stock	359.9	359.9
Additional Paid-In Capital	593.0	664.9
Retained Earnings	5,027.6	5,454.3
Treasury Stock (at cost)	(4,558.7)	(4,707.7)
Accumulated Other Comprehensive Loss	(385.1)	(166.6)
Noncontrolling interests	11.6	11.2
Total Shareholders' Equity	$1,048.4	$1,616.1
Total Liabilities and Shareholders' Equity	$4,754.8	$5,357.5

Additional information for 20X3 is as follows (amounts in millions):

Total credit sales (all on credit)	$7,146.1
Costs of goods sold	3,865.2
Net income	820.5

Required:

Next Level Compute the following ratios for 20X3. Provide a brief description of what each ratio reveals about Hershey.

Return on common equity (Round your answer to three decimal places.)
Debt-to-assets (Round your answer to three decimal places.)
Debt-to-equity (Round your answer to two decimal places.)
Current (Round your answer to two decimal places.)
Quick (Round your answer to two decimal places.)
Inventory turnover days (Use 365 days. Round your answer to nearest whole number.) days
Accounts receivable turnover days (Use 365 days. Round your answer to nearest whole number.) days
Accounts payable turnover days (Use 365 days. Round your answer to nearest whole number.) days
Operating cycle (in days) (Use 365 days. Round your answer to nearest whole number.) days
Total asset turnover (Round your answer to two decimal places.)

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