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 Industries in Appendix A.
Instructions
(a) Based on the information contained in these financial statements, compute the current ratio for 2007 for each company.
What conclusions concerning the companies’ liquidity can be drawn from these ratios?
(b) Based on the information contained in these financial statements, compute the following 2007 ratios for each company.
(1) Debt to total assets.
(2) Times interest earned. (Hershey’s total interest expense for 2007 was $121,066,000. See Tootsie Roll’s Note 6 for its interest expense.)
What conclusions about the companies’ long-run solvency can be drawn from the ratios?
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... Solvency
Solvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial...
Step by Step Answer:
Financial Accounting Tools for Business Decision Making
ISBN: 978-0470239803
5th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso