Complete the following ratios using the financial documents on pages 29–31 1. Cu
ID: 2791940 • Letter: C
Question
Complete the following ratios using the financial documents on pages 29–31
1. Current Ratio= Current Assets/Current Liabilities
2. Quick Ratio= Current Assets – Inventory/ Current Liabilities
3. Debt-to-Total-Assets Ratio= Total Debt/Total Assets
4. Debt-to-Equity Ratio= Total Debt/ Total Stockholders’ equity
5. Long-Term Debt-to-Equity Ratio= Long-term debt/ Total Stockholders’ equity
6. Time-Interest-Earned Ratio= Profits before interest & taxes/ Total interest charges
7. Inventory Turnover= Sales/Inventory of Finished Goods
8. Flood Assets Turnover= Sales/ Fixed Assets
9. Total Assets Turnover= Sales/Total Assets
10. Accounts Receivable Turnover= Annual Credit Sales/ Accounts Receivable
11. Average Collection Period= Accounts Receivable/(Total Credit Sales/365 days)
12. Gross Profit Margins= Sales Minus Cost of Goods Sold/ Sales
13. Operating Profit Margin= Earnings before interest & taxes EBIT/ Sales
14. Net Profit Margin= Net Income/Sales
15. Return on Total Assets(ROA)= Net Income/Total Assets
16. Return on Stockholders’ Equity (ROE)= Net Income/Total Stockholders’ Equity
17. Earnings Per Share(EPS)= Net Income/Number of Shares of Common Stock Outstanding
18. Price-Earnings Ratio= Market Price per Share/Earnings per Share
19. Sales= Annual Percentage Growth in Total Sales
20. Net Income= Annual Percentage Growth in Profits
2014, and 1 pexhut category, the coenpany koeps istemat rocords by three product segmens: Chocolate, Sweets and 94 percent as of December 31, 2013. Although Henhey does not repoet sales and income by s Chocolate category consists of fancier optices such as Refreshments, and Snacks and Adjacencies. The aoquired Cadbury, traditional products such as Mr. Goodbar and Hershey's Kisses, and Dagoba organic chocolates. Twizlers, Jolly Rancher, PayDay, and oders are included under the Confectionary Products umbrella. Breath Savons, Butèle Yum, and Icebreakers fall under Sweets and Refreshements, and Her shey's baking chocolates and synups are inclhaded under Snacks and Adjacencies. Hershey also offers a ll line of sagar free products. Many Hershey products are naturally gluten free and kosher in nature. sales and icome by geographic region are given in Exhibit 2. North America accounted 87.3 percent of the company's sales in 2014, 2013, and 2012, respectively. Note for 85.6, 868 and in Exhibit 2 that Hershey's income from outside Noeth America has declined sseadily. All sales and income from Hershey stores are included in the International and Other segment EXHIBIT 2 Hershey's Net Sales and Income (in millions) 2014 2014 $6,200.1 946.0 7,146.1 $5,812.7 831.6 6.644.3 $6,352.7 North America International and Other Total ,069.1 1,656.1 514 $1,707.5 1,862.6 North America International and Other Total 1.916.2 $1,956.2 $1,907.2 ch Source: Based on Hershey's 2014 Form JOK. p. 2. Hershey reported a 3.9 percent increase in revenues in 2014 to $7.42 billion, whereas increased about 7 percent overall from the prior year. The compamy's international net sales increased nearly 15 percent, including the negative impact of foreign currency exchange rates and positive contri bution of about $54 million from Hershey's acquisition of Shanghai Golden Moekey in China. company earnings Hershey has gained market share in every measured channel three years running, even after raising prices on many inems 10 percent over the same period. In fact, Hershey has prodoced higher eaming every year but two since 2000. With a 34 percent market share in North America, Hershey instituted an S percent price hike in late 2014 on most of its chocolate products, partly in response to higher cocoa and 4, respectively. Note the steady increases in both revenues and net income. EXHIBIT 3 Hershey's Income Statements (in thousands, except per share amounts) The company's most recent income statements and balance sheets are provided in Exhibits 3 2014 2013 2012 $7,421,768 $7.146,079 $6,644,252 Costs and expeeses Cost of sales Selling, marketing, and administrative Business realignment and impairment Total costs and expenses Income before interest and taxes Inderest expense Iecome before taxes Income taxes Net Income Net income per share Dividends paid per share 4,085.602 1,900,970 45,621 6,032,193 1.389 575 83,532 1,306,043 459,131 846,912 3865,231 1322.508 18,665 5,806.404 1.339,675 88,356 1,251,319 430849 820,470 3,784,370 1,703,796 44,938 5,533,104 1,111,148 95.569 1.015,579 354.648 2.04 Sourre: Based on Hershey's 2014 Form 10K. p 45Explanation / Answer
Ratios 2013 2014 1 Current Ratio= Current Assets/Current Liabilities 1.160876441 1.766545 2 Quick Ratio= Current Assets – Inventory/ Current Liabilities 0.74704272 1.298128 3 Debt-to-Total-Assets Ratio= Total Debt/Total Assets, Debt here is long term borrowings only 0.386239066 0.435543 4 Debt-to-Equity Ratio= Total Debt/ Total Stockholders’ equity 1.430928642 1.443898