Question
Download the Financial Ratios Spreadsheet and complete the spreadsheet by filling in the financial statements (the ratios will calculate themselves). The instructions are provided on
Download the Financial Ratios Spreadsheet and complete the spreadsheet by filling in the financial statements (the ratios will calculate themselves). The instructions are provided on the template. You will submit the completed Financial Ratios Spreadsheet separately with this assignment, per the instructions below. Focus primarily on the issues developed in the Strategic Management text, Chapters 1 and 2, but respond to all questions asked in the Case Analysis Template in relation to The Hershey Company, drawing from the information provided on the company in the text and outside research.
Instructions: Fill in the cells with $ (yellow highlighted) and the ratios will automatically calculate | |||||
Financial Ratios Analysis | Current Year | Previous Year | Previous Year | ||
Liquidity Ratios | |||||
Current Ratio: Current Assets/Current Liabilities | - | - | - | extent to which a firm can meet short-term obligations - generally one wants an upward trend | |
Quick Ratios: Current assets minus inventory/current liabilities | - | - | - | extent to which a firm can meet short-term obligations w/o selling inventory - generally one wants an upward trend | |
$ Current Assets | |||||
$ Current Liabilities | |||||
$ Inventory | |||||
Leverage Ratios | |||||
Debt-to-Total Assets Ratio: Total Debt/Total Assets | - | - | - | % of total funds provided by creditors - generally one wants a downward trend | |
Debt-to-Equity Ratios: Total Debt/Total Stockholders' Equity | - | - | - | % of total funds provided by creditors vs.. by owners - generally one wants a downward trend | |
Times-Interest-Earned Ratio: Profits before interest & taxes/Total Interest Charges | - | - | - | extent to which earnings can decline w/o firm being unable to pay interest - generally one wants and upward trend | |
$ Total Debt | |||||
$ Total Assets | |||||
$ Total Stockholders' Equity | |||||
$ Profits before Interest and taxes | |||||
$ Total Interest Expense | |||||
Activity Ratios | |||||
Inventory Turnover: Sales/Inventory of Finished Goods | - | - | - | whether firm holds extensive inventory and is selling it slower than industry - generally one wants and upward trend | |
Fixed Assets Turnover: Sales/Fixed Assets | - | - | - | Sales productivity and plan and equipment utilization - generally one want to see an upward trend | |
Total Assets Turnover: Sales/Total Assets | - | - | - | whether firm is generating sufficient vol. of business. for size of asset investment - generally one wants an upward trend | |
Average Collection Period: Accounts Receivable/(Total credit sales/365 days) | - | - | - | average time it takes for firm to collect on credit sales - generally one wants a downward trend | |
$ Sales | |||||
$ Inventory of Finished Goods | |||||
$ Fixed Assets | |||||
$ Total Assets | |||||
$ Accounts Receivable | |||||
$ Total Credit Sales (unless otherwise indicated, same as sales) | |||||
Profitability Ratios | |||||
Gross Profit Margin: Sales minus cost of good sold/Sales | - | - | - | total margin available to cover operating expenses and yield a profit - generally one wants an upward trend | |
Operating Profit Margin: Earnings before interest and taxes (EBIT)/Sales | - | - | - | profitability w/o concern for taxes and interest - generally one wants and upward trend | |
Net Profit Margin: Net Income/Sales | - | - | - | after-tax profits per dollar of sales - generally one wants an upward trend | |
Return on Total Assets (ROA): Net income/Total Assets | - | - | - | after-tax profits per dollar of assets (ROI) - generally one wants and upward trend | |
Return on Stockholders' Equity (ROE): Net Income/ Total Stockholders' Equity | - | - | - | after-tax profits per dollar of stockholders' investment in the firm - generally one wants and upward trend | |
Sales Revenue (already entered above - no need to re-enter data) | - | - | - | ||
$ Cost of goods sold or cost of sales | |||||
$ EBIT (Earnings Before Interest and Taxes) | |||||
$ Net Income (Earnings After Interest and Taxes) | |||||
Total Assets (already entered above - no need to re-enter data) | - | - | - | ||
Total Stockholders' Equity (already entered above - no need to re-enter) | - | - | - | ||
$ Other Operating Expenses | |||||
Revenue/Expense | |||||
Sales Revenue (percentage change) | - | - | - | annual percentage growth rate in sales - generally one wants an upward trend | |
Cost of Sales (percentage change) | - | - | - | annual percentage growth rate in cost of sales - generally one wants a downward trend | |
Operating Profit (percentage change) | - | - | - | annual percentage growth rate in operating profit - generally one wants an upward trend | |
Net Income (percentage change) | - | - | - | annual percentage growth rate in net income - generally one wants an upward trend | |
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