The financial statements of The Hershey Company are presented in Appendix B, following the financial statements for
Question:
The financial statements of The Hershey Company 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 2009 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 2009 ratios for each company.
(1) Debt to total assets.
(2) Times interest earned. (Hershey’s total interest expense for 2009 was $91,336,000. See Tootsie Roll’s Note 10 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:
a Based on the current ratio Tootsie Roll is more liquid than Hershey Tootsie Rolls current rat...View the full answer
Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
