You are considering making a loan to The Hershey Company. The following information is from the financial statements included in Form 10-K for fiscal years 2014 and 2013 (in thousands of dollars):

Net sales for the year ended:

December 31, 2014 ................................... $7,421,768

December 31, 2013 .................................... 7,146,079

Accounts receivable-trade, net:

December 31, 2014 ...................................... 596,940

December 31, 2013 ...................................... 477,912

December 31, 2012 ...................................... 461,383

The following information is from the financial statements included in Form 10-K for fiscal years 2014 and 2013 for Tootsie Roll Industries, Inc. (in thousands of dollars):

Net product sales for the year ended:

December 31, 2014 ........................................... $539,895

December 31, 2013 ............................................. 539,627

Accounts receivable trade, less allowances of $1,968, $2,042, and $2,142 respectively:

December 31, 2014 ............................................. 43,253

December 31, 2013 ............................................. 40,721

December 31, 2012 ............................................. 42,108

Required

Part A. The Ratio Analysis Model

A lender must assess how well a company is managing its accounts receivable before making a loan. The accounts receivable turnover ratio tells us how many times in a year a company collects its receivables. Replicate the five steps in the Ratio Analysis Model on pages 320-321 to analyze the accounts receivable turnover ratios for The Hershey Company and Tootsie Roll Industries, Inc.:

1. Formulate the Question

2. Gather the Information from the Financial Statements

3. Calculate the Ratio

4. Compare the Ratio with Other Ratios

5. Interpret the Ratios

Part B. The Business Decision Model

A lender must consider a variety of factors, including financial ratios, before making a loan. Replicate the five steps in the Business Decision Model on page 321 to decide whether to loan money to The Hershey Company:

1. Formulate the Question

2. Gather Information from the Financial Statements and Other Sources

3. Analyze the Information Gathered

4. Make the Decision

5. Monitor Your Decision