The financial statements of Hershey Foods are presented in Appendix B, following the financial statements for Tootsie Roll in Appendix A.

Instructions Answer the following questions for each company:

(a) What is the balance in cash and cash equivalents at December 31, 1998?

(b) How much cash was provided by operating activities during 1998?

(c) Calculate the ratio of cash to daily cash expenses.

(d) Calculate free cash flow.

(e) What conclusions regarding the ability to generate cash and the companies cash management can be made from the comparison of these results?

RESEARCH CASE