The Hershey Co. is famous worldwide for its chocolate confections-the Hershey bar and those delightful Hershey Kisses.
Question:
The Hershey Co. is famous worldwide for its chocolate confections-the Hershey bar and those delightful Hershey Kisses. Tootsie Roll Industries is equally famous for its chewy Tootsie Roll and those flavorful Tootsie Roll Pops. Selected financial information about each company's performance in 2014 follows:
Hershey Co. Tootsie Roll Industries
Sales.................................$7,422 million........................$540 million
Net income.........................$847 million..........................$63 million
Return on assets (ROA) .................16.3%.................................7.0%
Profit margin..............................12.1%................................11.7%
Asset turnover...............................1.35..................................0.60
Required:
1. Why is Tootsie Roll so much less profitable than Hershey?
2. The industry-average ROA for confectioners is around 10%. Which company has the more valuable brand?
Step by Step Answer:
Requirement 1 Tootsie Roll is the smaller of the two companies as measured by sales and thus it shou...View the full answer
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
