12.52 Liquidity Ratios

Complete problems 1 and 2 using exhibit 17-2

12-52 Liquidity Ratios Exhibit 12-17 contains the income statements and balance sheets of The Hershey Company, manufacturer of such well-known products as Hershey's chocolate bars, Reese's peanut butter cups, Almond Joy candy bars, and York peppermint patties. 1. Compute the following ratios for 2011: (a) current, (b) herage collection period, and (c) inventory turnover. Assume all sales are on credit. 2. Assess Hershey's liquidity compared with the following averages for the food processing industry as provided by Reuters and with ratios computed for Tootsie Roll, a competitor in the candy manufacturing, marketing, sales, and distribution industry. Reuters provides the following overview of the food processing industry. The industry consists of "companies engaged in processing and packaging produce, meats, fish, animal feeds, fruit juices and dairy products. The industry includes, grain milling, crop cleaning, grading and packaging, animal slaughtering and packaging operations, seafood processing, freezing, canning operations, juice, coffee, tea, dairy and all other food manufacturers, including pet foods." EXHIBIT 12-17 The Hershey Company Years Ended December 31, 2011, and December 31 , 2010 ( $ in thousands, except per share data) EXHIBIT 1217 (Continued) The Hershey Company Years Ended December 31, 2011, and December 31, 2010 (\$ in thousands, except per share data) 12-52 Liquidity Ratios Exhibit 12-17 contains the income statements and balance sheets of The Hershey Company, manufacturer of such well-known products as Hershey's chocolate bars, Reese's peanut butter cups, Almond Joy candy bars, and York peppermint patties. 1. Compute the following ratios for 2011: (a) current, (b) herage collection period, and (c) inventory turnover. Assume all sales are on credit. 2. Assess Hershey's liquidity compared with the following averages for the food processing industry as provided by Reuters and with ratios computed for Tootsie Roll, a competitor in the candy manufacturing, marketing, sales, and distribution industry. Reuters provides the following overview of the food processing industry. The industry consists of "companies engaged in processing and packaging produce, meats, fish, animal feeds, fruit juices and dairy products. The industry includes, grain milling, crop cleaning, grading and packaging, animal slaughtering and packaging operations, seafood processing, freezing, canning operations, juice, coffee, tea, dairy and all other food manufacturers, including pet foods." EXHIBIT 12-17 The Hershey Company Years Ended December 31, 2011, and December 31 , 2010 ( $ in thousands, except per share data) EXHIBIT 1217 (Continued) The Hershey Company Years Ended December 31, 2011, and December 31, 2010 (\$ in thousands, except per share data)