The financial statements of The Hershey Company appear in Appendix B, following the financial statements for Tootsie Roll in Appendix A.

Instructions

(a) Based on the information contained in these financial statements, determine the following values for each company.

(1) Profit margin ratio for 2009. (For Tootsie Roll, use “Total Revenue.”)

(2) Gross profit for 2009. (For Tootsie Roll, use “Product” amounts.)

(3) Gross profit rate for 2009. (For Tootsie Roll, use “Product” amounts.)

(4) Operating income for 2009.

(5) Percentage change in operating income from 2009 to 2008.

(b) What conclusions concerning the relative profitability of the two companies can be drawn from these data?

RESEARCH CASE