Strategic Management (16th Edition)

Chapter 8, Problem 8ALE

Problem

Determine the Cash Value of Hershey Company

Purpose

It is simply good business to continually know the cash value (corporate valuation) of your company. This exercise gives you practice in determining the total worth of a company using several methods. To perform this analysis, use Hersheys 2017 financial statements as given in the Cohesion Case.

Instructions

Step 1 Calculate the financial worth of Hershey based on four approaches:

(1) the net worth method,

(2) the net income method,

(3) the price-earnings ratio method, and (4) the outstanding shares method.

Step 2 Get an average of the four methods. In a dollar amount, how much is Hershey worth?

Step 3 Compare your analyses and conclusions with those of other students.

Annual Income Statement (values in 000's)Get Quarterly Data