The financial statements of Hershey Foods are presented in Appendix B, following the financial statements for Tootsie

Question:

The financial statements of Hershey Foods are presented in Appendix B, following the financial statements for Tootsie Roll in Appendix A.

Instructions

(a) Based on the information in these financial statements, compute the 2007 return on common stockholders’ equity, debt to total assets ratio, and return on assets ratio for each company.

(b) What conclusions concerning the companies’ profitability can be drawn from these ratios? Which company relies more on debt to boost its return to common shareholders?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...