The Hershey Company. For more than 100 years, The Hershey Company has enjoyed a position as one of North America’s largest manufacturers of quality chocolate and confectionery products. Today, The Hershey Company and its subsidiaries export to approximately 70 countries worldwide.

1. Compute the following ratios for 2011: (a) ROE, (b) gross profit rate, (c) return on sales, (d) total asset turnover, (e) ROA (with after-tax net income in the numerator), and (f) financial leverage ratio. Note that to be consistent with the industry averages used in the problem, return on sales and ROA are computed with after-tax net income, not EBIT in the numerator.

Reuters Averages (as of August 31, 2012) Tootsie Roll (year ended December 31, 2011) (Respectively in %'s below)

Return on stockholders’ equity 19.08% 6.59%

Gross profit rate 38.75% 31.2%

Return on sales (Net income ÷ Sales) 5.91% 8.3%

Total asset turnover 1.11 times 0.62 times

Return on assets (Net income ÷ Assets) 8.16% 5.12%

Financial leverage ratio Not available 1.29

  

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EXHIBIT 12-17 CONSOLIDATED BALANCE SHEETS The Hershey Company Years Ended December 31, 2011, and December 31, 2010 ($ in thousands, except per share data) 2011 2010 Assets Current assets: Cash and cash equivalents $ 693,686 $ 884,642 Accounts receivable-trade 399,499 390,061 Inventories 648,953 533,622 Deferred income taxes 136,861 55,760 Prepaid expenses and other 167,559 141,132 Total current assets 2,046,558 2,005,217 Property, plant, and equipment, net Goodwill 1,559,717 1,437,702 516,745 524,134 Other intangibles 111,913 123,080 Deferred income taxes 38,544 21,387 Other assets 138.722 161.212 Total assets $4,412,199 $4,272.732 Liabilities and Stockholders' Equity Current liabilities: $ 420,017 $ 410,655 Accounts payable Accrued liabilities 612,186 593,308 Accrued income taxes 1,899 9,402 Short-term debt 42,080 24,088 97,593 261,392 1,298,845 Current portion of long-term debt Total current liabilities 1,173,775 Long-term debt 1,748,500 1,541,825 494,461 3,335,131 Other long-term liabilities 617.276 Total liabilities 3,539,551 Stockholders' equity: Common stock, shares issued: 299,269,702 in 2011 and 299,195,325 in 2010 Class B Common stock, shares issued: 60,632.042 in 2011 and 60,706,419 in 2010 299,269 299,195 60,632 60,706 Additional paid-in-capital 490,817 434,865 Retained earnings Treasury-Common stock shares, at cost: 134,695,826 in 2011 and 132,871,512 in 2010 4,699,597 4,374,718 (4,258,962) (4,052,101) (215,067) Accumulated other comprehensive loss (442,331) The Hershey Company stockholders' equity Noncontrolling interests in subsidiaries 849,022 902,316 23,626 35,285 937,601 Total stockholders' equity Total liabilities and stockholders' equity 872,648 $4,412,199 $4,272,732 EXHIBIT 12-17 CONSOLIDATED BALANCE SHEETS The Hershey Company Years Ended December 31, 2011, and December 31, 2010 ($ in thousands, except per share data) 2011 2010 Assets Current assets: Cash and cash equivalents $ 693,686 $ 884,642 Accounts receivable-trade 399,499 390,061 Inventories 648,953 533,622 Deferred income taxes 136,861 55,760 Prepaid expenses and other 167,559 141,132 Total current assets 2,046,558 2,005,217 Property, plant, and equipment, net Goodwill 1,559,717 1,437,702 516,745 524,134 Other intangibles 111,913 123,080 Deferred income taxes 38,544 21,387 Other assets 138.722 161.212 Total assets $4,412,199 $4,272.732 Liabilities and Stockholders' Equity Current liabilities: $ 420,017 $ 410,655 Accounts payable Accrued liabilities 612,186 593,308 Accrued income taxes 1,899 9,402 Short-term debt 42,080 24,088 97,593 261,392 1,298,845 Current portion of long-term debt Total current liabilities 1,173,775 Long-term debt 1,748,500 1,541,825 494,461 3,335,131 Other long-term liabilities 617.276 Total liabilities 3,539,551 Stockholders' equity: Common stock, shares issued: 299,269,702 in 2011 and 299,195,325 in 2010 Class B Common stock, shares issued: 60,632.042 in 2011 and 60,706,419 in 2010 299,269 299,195 60,632 60,706 Additional paid-in-capital 490,817 434,865 Retained earnings Treasury-Common stock shares, at cost: 134,695,826 in 2011 and 132,871,512 in 2010 4,699,597 4,374,718 (4,258,962) (4,052,101) (215,067) Accumulated other comprehensive loss (442,331) The Hershey Company stockholders' equity Noncontrolling interests in subsidiaries 849,022 902,316 23,626 35,285 937,601 Total stockholders' equity Total liabilities and stockholders' equity 872,648 $4,412,199 $4,272,732

Answer rating: 100% (QA)

RE Net Inme Shrehlders equity 628962 872648 100 72 ... View the full answer