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: 1. Inventory turnover ratio 2. Average days in inventory 3. Receivables turnover ratio 4. Average collection period 5. Asset turnover ratio 6. Profit margin on sales 7. Return on assets 8. Return on equity

Answer 1

RATIO ANALYSIS FOR 2019
1. Inventory Turnover Ratio= Cost of goods sold/Average inventory
COGS	4363774
Opening inventory	784879
Closing invenstory	815251
Average inventory	800065
ITR	5.45
2. Average days in inventory= Days in a year/Inventory Turnover ratio
Days	365
ITR	5.45
Days in inventory	67	days
3. Receivable turnover ratio= Net sales/ Average receivable
Net sales	7986252
Opening receivable	594145
Closing receivable	568509
Average receivable	581327
Turnover ratio	13.74
4. Average collection period= Days in a year/Receivable turnover ratio
Days	365
Ratio	13.74
Collection period	27	days