Project 2 part 1:

Using the financial statements of Hershey Company, compute the ratios in tools for analysis for both 2017 and 2016 [note: for those ratios needing 2015 balance sheet items assume that those item on the balance sheet did not change from 2015 to 2016]

The December 31, 2017 stock price was $106.51

The December 31, 2016 stock price was $98.75

Part 2: Discuss the changes in the ratios from 2016 to 2017. Has the company improved, declined or stayed the same. Justify your answer.

LIQUIDITY

Working Capital = Current Assets - Current Liabilities

Current Ratio = Current Assets / Current Liabilities

Current Cash Debt Coverage Ratio = Cash Provided By Operations/ Average Current Liabilities

Inventory Turnover Ratio = Cost of Goods Sold/ Average Inventory

Days in Inventory = 365 Days/Inventory Turnover Ratio

Receivables Turnover Ratio = Net Credit Sales/ Average Net Receivables

Average Collection Period = 365 Days/ Receivables Turnover Ratio

SOLVENCY

Debt to Total Assets Ratio = Total Liabilities / Total Assets

Cash Debt Coverage Ratio = Cash Provided by Operations / Average Total Liabilities

Times Interest Earned Ratio = Net Income + Interest Expense + Tax Expense/ Interest Expense

Free Cash Flow = Cash Provided by Operations - Capital Expenditures - cash dividends

PROFITABILITY

Earnings per Share = Net Income - Preferred Stock Dividends/ Average Common Stock Shares Outstanding

Price Earnings Ratio = Stock Price per Share/ Earnings per Share

Gross Profit Rate = Gross Profit/ Net Sales

Profit Margin Ratio = Net Income / Net Sales

Return on Assets Ratio = Net Income / Average Total Assets

Asset Turnover Ratio = Net Sales/ Average Total Assets

Payout Ratio = Cash Dividends Declared on Common Stock/ Net Income

Return on Common Stockholders' Equity Ratio = Net Income - Preferred Stock Dividends/ Average Common Stockholders' Equity