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

Instructions

(a) Based on the information contained in these financial statements, compute the following 2009 values for each company.

(1) Receivables turnover ratio. (For Tootsie Roll use “Net product sales.” Assume all sales were credit sales.)

(2) Average collection period for receivables.

(b) What conclusions concerning the management of accounts receivable can be drawn from these data?

RESEARCH CASE