The following data were taken from Hershey Foods Corporation’s 2004 annual report. All dollar amounts are in thousands.

Required:

a. Compute Hershey’s accounts receivable ratios for 2004 and 2003.

b. Compute Hershey’s average days to collect accounts receivables for 2004 and 2003.

c. Based on the ratios computed in Requirements a and

b, did Hershey’s performance get better or worse from 2003 to 2004?

d. In 2004 the average interest rate on Hershey’s long-term debt was approximately 7.2 percent. Assume it took Hershey 30 days to collect its receivables. Using an interest rate of 7.2 percent, calculate how much it cost Hershey to finance its receivables for 30 days in 2004.

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Sales Accounts Receivable Fiscal Years Ending December 31, 2004 $4,429,248 408,930 December 31, 2003 $4,172,551 407,612