- Find and read the description of the company, including the type of business it is in.
- Locate the companys primary financial statements. See pages 507 - 508 in your textbook for a summary of ratios in Chapter 7 (Table 7.1). Calculate at least three of the listed ratios in each category. You should thus calculate at least 9 ratios in total! Show your work in calculating these ratios using Excel.
Your submission should an Excel file showing your work for the ratios you calculate, as detailed above. Be sure to write a brief statement describing what you have learned about your companys liquidity and profitability. Additionally,. answer this question: Why is gaining an understanding of the industry and type of business an important starting point for financial statement analysis? Explain.
I have chosen the Hershey Company and the Balance sheet is listed here:
Example from the book:
Ratios which must be included per the instructions:
| Profitability Ratios | |
| Gross margin ratio | |
| Profit margin ratio | |
| Return on assets | |
| Return on common shareholders |
| Earnings per share | |
| | | |
| Short-Term Liquidit Ratios |
| Current Ratio | |
| Quick Ratio | |
| Receivables Turnover Ratio |
| Inventory Turnover Ratio |
| | | |
| Long-Term Solvency Ratios |
| Debt to assets | |
| Debt to equity | |
| Times interest earned | |
2020 2019 THE HERSHEY COMPANY CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December 31, ASSETS Current assets: Cash and cash equivalents $ Accounts receivable-trade, net Inventories Prepaid expenses and other Total current assets Property, plant and equipment, net Goodwill Other intangibles Other non-current assets Deferred income taxes Total assets S LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued liabilities Accrued income taxes Short-term debt Current portion of long-term debt Total current liabilities Long-term debt Other long-term liabilities Deferred income taxes Total liabilities 1,143,987 $ 615,233 964,207 254,478 2,977,905 2,285,255 1,988,215 1,295,214 555,887 29,369 9,131,845 S 493,262 568,509 815,251 240,080 2,117,102 2,153,139 1,985,955 1,341,166 512,000 31,033 8,140,395 580,058 781,766 17,051 74,041 438,829 1,891,745 4,089,755 683,434 229,028 6,893,962 550,828 702,372 19,921 32,282 703,390 2,008,793 3,530,813 655,777 200,018 6,395,401 Stockholders' equity: The Hershey Company stockholders' equity Preferred stock, shares issued: none in 2020 and 2019 Common stock, shares issued: 160,939,248 in 2020 and 2019 Class B common stock, shares issued: 60,613,777 in 2020 and 2019 Additional paid-in capital Retained earnings Treasury common stock shares, at cost: 13,325,898 in 2020 and 12,723,592 in 2019 Accumulated other comprehensive loss TotalThe Hershey Company stockholders' equity Noncontrolling interest in subsidiary Total stockholders' equity Total liabilities and stockholders' equity 160.939 60,614 1,191,200 1.928,673 160.939 60,614 1,142,210 1,290,461 (768,992) (338,082) 2,234,352 3,531 2,237,883 9,131,845 $ (591,036) (323,966) 1,739,222 5,772 1,744.994 8,140,395 See Notes to Consolidated Financial Statements. Figure 7.1 Income Statement Trend Analysis for Coca-Cola 2019 2018 $ Percent Change Change Revenues $ 34,300 2,966 8.6% 37,266 Cost of Goods and Services Sold 14,619 13,067 1,552 11.9% GROSS PROFIT 22,647 21,233 1,414 6.7% Selling, General and Administrative Expense 12,103 11,002 1,101 10.0% Other Cost and Expense, Operating 458 1,079 (621) (57%) OPERATING INCOME 10,086 9,152 934 10.2% 2020 2019 THE HERSHEY COMPANY CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December 31, ASSETS Current assets: Cash and cash equivalents $ Accounts receivable-trade, net Inventories Prepaid expenses and other Total current assets Property, plant and equipment, net Goodwill Other intangibles Other non-current assets Deferred income taxes Total assets S LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued liabilities Accrued income taxes Short-term debt Current portion of long-term debt Total current liabilities Long-term debt Other long-term liabilities Deferred income taxes Total liabilities 1,143,987 $ 615,233 964,207 254,478 2,977,905 2,285,255 1,988,215 1,295,214 555,887 29,369 9,131,845 S 493,262 568,509 815,251 240,080 2,117,102 2,153,139 1,985,955 1,341,166 512,000 31,033 8,140,395 580,058 781,766 17,051 74,041 438,829 1,891,745 4,089,755 683,434 229,028 6,893,962 550,828 702,372 19,921 32,282 703,390 2,008,793 3,530,813 655,777 200,018 6,395,401 Stockholders' equity: The Hershey Company stockholders' equity Preferred stock, shares issued: none in 2020 and 2019 Common stock, shares issued: 160,939,248 in 2020 and 2019 Class B common stock, shares issued: 60,613,777 in 2020 and 2019 Additional paid-in capital Retained earnings Treasury common stock shares, at cost: 13,325,898 in 2020 and 12,723,592 in 2019 Accumulated other comprehensive loss TotalThe Hershey Company stockholders' equity Noncontrolling interest in subsidiary Total stockholders' equity Total liabilities and stockholders' equity 160.939 60,614 1,191,200 1.928,673 160.939 60,614 1,142,210 1,290,461 (768,992) (338,082) 2,234,352 3,531 2,237,883 9,131,845 $ (591,036) (323,966) 1,739,222 5,772 1,744.994 8,140,395 See Notes to Consolidated Financial Statements. Figure 7.1 Income Statement Trend Analysis for Coca-Cola 2019 2018 $ Percent Change Change Revenues $ 34,300 2,966 8.6% 37,266 Cost of Goods and Services Sold 14,619 13,067 1,552 11.9% GROSS PROFIT 22,647 21,233 1,414 6.7% Selling, General and Administrative Expense 12,103 11,002 1,101 10.0% Other Cost and Expense, Operating 458 1,079 (621) (57%) OPERATING INCOME 10,086 9,152 934 10.2%
