Financial Analysis: Hershey Corp. & Tootsie Roll Industries

Financial Analysis: Hershey Corp. & Tootsie volute Industries Financial Analysis: Hershey Corp. & Tootsie spue Industries Hershey and Tootsie Roll are two companies in the confection persistence. We compared both companies for the years 2004, 2005, and 2006 against each other and against the industry averages in disposition to make a decision about which alliance we would ask to invest in. The comparisons we utilise to make our decision were ratios for liquid state, solvency, and profitability. As a result of our analyses, we have chosen the Hershey Company. Liquidity Liquidity ratios measure short ability of the company to wages its maturing obligations and to meet unexpected necessarily for cash (Kimmel Weygandt, & Kieso, 2007, p. 74). The higher the ratio value the larger the circumference of safety that the company possesses to cover short-term debts. The liquidity ratios we used in analyzing both Hershey and Tootsie Roll are the true ratio, current cash debt coverage ratio, accounts receivable turnover ratio, average collection period (average age of receivables), catalogue turnover, and days in inventory (average age of inventory).

rate of flow Ratio Results Current ratio is a measure used to evaluate a companys liquidity and short-term debt-paying ability; computed as current assets divided by current liabilities (Kimmel et al, 2007, p. 73). A current ratio of 1.0 means the company could theoretically survive for one year, even if it made no sales. Hersheys current ratio has slightly improved from .9199 in 2004 to .9754 in 2006; however, this is still significantly below the industry average of 1.30. Tootsie Rolls current ratio has significantly increased from 2.3409 in 2004 to 3.0689 in 2006. In addition, Tootsie Rolls current ratio has been above the industry average for all three years. Therefore, Tootsie Roll is able to pay its current debt more than Hershey. Current Cash Debt Coverage Ratio Current cash debt coverage is a cash-basis ratio used to evaluate... If you exigency to get a full essay, order it on our website: Orderessay

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