Question

The Hershey Company Analysis Using the financial statements of the Hershey Company compute the following ratios (hint: when computing the return on equity use the amount for Total Stockholders' Equity when computing the average) for 2019: 5. Asset turnover ratio 6. Profit margin on sales 7. Return on assets 8. Return on equity

Answer 1

5) Asset turnover ratio:
Net sales (a)	$7,986,252
Average total assets (b) ($8,140,395 + $7,703,020/2)	$7,921,708
Asset turnover ratio (a/b)	1.01	times
6) Profit margin on sales:
Net income (a)	$1,149,692
Net sales (b)	$7,986,252
Profit margin on sales (a/b*100)	14%
7) Retunr on assets:
Net income (a)	$1,149,692
Total assets (b)	$8,140,395
Return on assets (a/b)	0.14	times
8) Return on equity:
Net income (a)	$1,149,692
Total shareholders' equity (b)	$1,744,994
Return on assets (a/b)	0.66	times