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Financial Ratio Analysis for Hershey & Co. Use 2019 financials if you can find them; otherwisu 2018. Remember that you need t

Exercise 4C Perform a Financial Ratio Analysis for Hershey Company


Breakdown 12/31/2019 12/31/2018 12/31/2017 12/31/2016 Assets Current Assets Cash Cash And Cash Equivalents 493,262 587,998 38
v Liabilities and stockholders eq Liabilities Current Liabilities Total Revenue 735,672 1,203,316 502,314 Accounts Payable 55
Breakdown TTM 12/31/2019 12/31/2018 12/31/2017 12/31/2016 Total Revenue 7,986,252 7,986,252 7,791,069 7,515,426 7,440,181 Cos
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Answer #1

Financial ratios for the company can be calculated by using the following formulas in Excel:

Hershey Company trend
Type Ratio Formula Calculation 2017 2018 2019
Liquidity ratio Current ratio = Current asset/Current liabilities =2117102/2008793 =2001910/2076543= 0.9640 =2239181/2418566= 0.9258 =2117102/2008793= 1.05392
Quick ratio = Current asset- inventories/Current liabilities =(138,300-82,000)/75,000 =(2001910-752836)/2076543= 0.6015 =(2239181-784879)/2418566= 0.6013 =(2117102-815251)/2008793= 0.6481
Activity Inventory turnover =Cost of goods sold i.e Cost of Revenue/Total inventory =600,000/82,000 =4070907/752836 = 5.4074 =4215774/784879= 5.3712 =4363774/815251 = 5.3527
Fixed assets turnover =Total sales/Total assets =600,000/408,300 =7515426/5553726= 1.3532 =7791069/7703020 = 1.0114 =7986252/8140395 = 0.9811
Leverage ratio Debt ratio =Total liabilities/Total assets = 225,000/408,300 =4622161/5553726= 0.8323 =6295754/7703020 = 0.8173 =6395401/8140395 = 0.7856
Debt to equity =Total debt/Total shareholders equity =4622161/915338= 5.0497 =6295754/1398721= 4.5011 =6395401/1739222 = 3.6772
Profitability Gross profit margin =Gross Profit/Sales = 140,000/600,000 =3444519/7515426*100 = 45.8326 =3575325/7791069*100 = 45.8900 =3622478/7986252*100 = 45.3589
Net profit margin = Net Profit/Sales = 43,000/600,000 =782981/7515426*100 = 10.4183 =1177562/7791069*100 = 15.1142 =1149612/7986252*100 = 14.3949
ROA =Operating Income i.e. EBIT/Total Assets = 80,000/408,300 =1531116/5553726*100=27.57 =1700496/7703020*100 = 22.07 =1716549/8140395*100 = 21.09
ROE =Net Income/Shareholder's Equity =43,000/183,300 =782981/915338*100 = 85.5401 =1177562/1398721*100 = 84.1885 =1149612/1739222*100 = 66.0992
Growth Sales Total sales 7515426 7791069 7986252
Net income 782981 1177562 1149612
Earnings per share =Net income-dividends/Weighted average common shares outstanding =782981/((785856+915338)/2) = 0.9205 =1177562/((1398721+915338)/2) = 1.0177 =1149692/((1398721+1739222)/2) = 0.7328
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