Question
Recent balance sheet information for two companies in the food industry, H.J. Heinz Company and The Hershey Company , are as follows (in thousands of
Recent balance sheet information for two companies in the food industry, H.J. Heinz Company and The Hershey Company, are as follows (in thousands of dollars):
a. Determine the ratio of total liabilities to stockholders' equity for both companies. Round to one decimal place.
H.J. Heinz | |
Hershey |
Note: Notice both companies' long-term liabilities include two lines ("Long-term debt" and "Other long-term liabilities"). This is a bit confusing, because "debt" and "liabilities" are often synonymous. These companies (and many other companies) use the term "Long-term debt" to mean the long-term portion of bank loans. Of course, we know that "debt" can be many things other than bank loans, but when you see "debt" on the balance sheet separate from other liabilities, the term "debt" almost always means bank loans. "Long-term debt" means the portion of bank loans that is due after one year from the balance sheet date. The amount of bank loans that are due within one year are included in Current liabilities.
b. Determine the amount of each company's bank loans that is due sometime after one year from the date of this balance sheet.
H.J. Heinz | |
Hershey |
c. Determine the ratio of fixed assets to long-term liabilities for both companies. Round to two decimal places.
H.J. Heinz | |
Hershey |
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