exercise 8e

Determine the Cash Value of Hershey Company

It is simply good business to continually know the cash value (corporate valuation) of your company. This exercise gives you practice in determining the total worth of a company using several methods. To perform this analysis, use Hersheys 2014 financial statements as given in the Cohesion Case.

Instructions

Step 1

Step 2 Step 3

Calculate the financial worth of Hershey based on four approaches: (1) the net worth method, (2) the net income method, (3) the price-earnings ratio method, and (4) the outstanding shares method. Get an average of the four methods. In a dollar amount, how much is Hershey worth? Compare your analyses and conclusions with those of other students.

ART 1 OVERVIEW OF STRATEGIC MANAGEMENT Balance sheets (in thousands) EXHIBIT 4 Hershey's 2014 374,854 97,13 Assets Cash and Cash Equivalents 596,940 Short-Term Investments 801,036 Accounts Receivable-Trade (Net) 100,515 Inventories 276,57 Deferred Income Taxes 2,247,047 Prepaid Expenses and Other 2.151,90 Total Current Assets 792,955 Net Property, Plant, and Equipment 294,84 Goodwill 142,772 Other Intangibles Other Assets 5,629,516 Total Assets Liabilities and Stockholders' Equity 635,501 Short-Term Borrowings 482,017 Accounts Payable 813,513 Accrued Liabilities 4.616 Accrued Income Taxes 935,647 y Total Current Liabilities ,548,963 2 y Long-Term Debt 526,003 Other Long-Term Liabilitie Deferred Income Taxes 99.373 Total Liabilities 4,109,986 Stockholders' Equity Preferred stock shares issued none in 2014 and 2013 Common stock, shares issued: 299,281,967 in 2014 and 299,281,527 in 2013 Class B common stock, shares issued: 60,619.777 in 2014 and 60,620,527 in 2013 Additional paid-in capital Retained earnings 754,186 Treasury stock: 138,856,786 in 2014 and 136,007,023 n 2013 5,860,784 (5,161,236) Accumulated other comprehensive lo Stockholders' equity (358,573) Noncontrolling interests in subsidiaries 1,455,062 Total stockholders' equity Total liabilities and stockholders' equity 519,530 Source: Hershey's 2014 Fonn 10k, p. 47. s 5,629,516/ Competitors chocolate industry is dominated by fi 2013 1 477,912 659,54 52,511 178,862 2,487,334 1,805,345 576,56 195,244 293,004 5,357,488 166,875 461,514 699,722 79,9 1,408,022 795.142 434,068 104,204 3,741,436 664,944 5,454,286 (4,707,730) (166,567 1,604,834 11.218 616,052 5,357,488 EXHIB Produc USA CI USA N Globo Candy Source. rou Lind Mo EXH Emp Rev Rev Ne Mau Op Soure Nest Hea of 9 cust But and can com An tin its co cu ART 1 OVERVIEW OF STRATEGIC MANAGEMENT Balance sheets (in thousands) EXHIBIT 4 Hershey's 2014 374,854 97,13 Assets Cash and Cash Equivalents 596,940 Short-Term Investments 801,036 Accounts Receivable-Trade (Net) 100,515 Inventories 276,57 Deferred Income Taxes 2,247,047 Prepaid Expenses and Other 2.151,90 Total Current Assets 792,955 Net Property, Plant, and Equipment 294,84 Goodwill 142,772 Other Intangibles Other Assets 5,629,516 Total Assets Liabilities and Stockholders' Equity 635,501 Short-Term Borrowings 482,017 Accounts Payable 813,513 Accrued Liabilities 4.616 Accrued Income Taxes 935,647 y Total Current Liabilities ,548,963 2 y Long-Term Debt 526,003 Other Long-Term Liabilitie Deferred Income Taxes 99.373 Total Liabilities 4,109,986 Stockholders' Equity Preferred stock shares issued none in 2014 and 2013 Common stock, shares issued: 299,281,967 in 2014 and 299,281,527 in 2013 Class B common stock, shares issued: 60,619.777 in 2014 and 60,620,527 in 2013 Additional paid-in capital Retained earnings 754,186 Treasury stock: 138,856,786 in 2014 and 136,007,023 n 2013 5,860,784 (5,161,236) Accumulated other comprehensive lo Stockholders' equity (358,573) Noncontrolling interests in subsidiaries 1,455,062 Total stockholders' equity Total liabilities and stockholders' equity 519,530 Source: Hershey's 2014 Fonn 10k, p. 47. s 5,629,516/ Competitors chocolate industry is dominated by fi 2013 1 477,912 659,54 52,511 178,862 2,487,334 1,805,345 576,56 195,244 293,004 5,357,488 166,875 461,514 699,722 79,9 1,408,022 795.142 434,068 104,204 3,741,436 664,944 5,454,286 (4,707,730) (166,567 1,604,834 11.218 616,052 5,357,488 EXHIB Produc USA CI USA N Globo Candy Source. rou Lind Mo EXH Emp Rev Rev Ne Mau Op Soure Nest Hea of 9 cust But and can com An tin its co cu