Broadening Your Perspective 8-2 The financial statements of The Hershey Company

Question

Broadening Your Perspective 8-2 The financial statements of The Hershey Company and Tootsie Roll are presented below THE HERSHEY COMPANY CONSOLIDATED STATEMENTS OF INCOME For the years ended December 31 In thousands of dollars except per share amounts Net Sales Costs and Expenses: 2011 2010 2009 6.080,788 5,671,009 $5,298,668 $ Cost of sales 3,548,8963,255,801 3,245,531 1,477,750 1,426,4771,208,672 Selling, marketing and administrative Business realignment and impairment (credits) charges, net (886) 83,433 82,875 Total costs and expenses Income before Interest and Income Taxes 5,025,760 1,055,028 4,765,7114,537,078 761,590 90,459 671,131 235,137 $509,799 $435,994 905,298 96,434 808,864 299,065 Interest expense, net Income before Income Taxes 962,845 333,883 $628,962 Provision for income taxes Net Income Net Income Per Share-Basic-Class B Common Stock Net Income Per Share-Diluted-Class B Common Stock Net Income Per Share-Basic-Common Stock Net Income Per Share-Diluted-Common Stock Cash Dividends Paid Per Share: $1.2800 $1.1900 1.0712 The notes to consolidated financial statements are an integral part of these statements and are Common Stock Class B Common Stock $1.3800 1.2500 1.1600 included in the Hershey's 2011 Annual Report, available at www.thehersheycompany.com THE HERSHEY COMPANY CONSOLIDATED BALANCE SHEETS December 31 In thousands of dollars ASSETS Current Assets: 2011 Cash and cash equivalents Accounts receivable-trade Inventories Deferred income taxes Prepaid expenses and other $693,686$884,642 390,061 533,622 55,760 141,132 2,046,558 2,005,217 1,559,7171,437,702 524,134 123,080 21,387 161,212 412,199 $4,272,732 399,499 648,953 136,861 167,559 Total current assets Property, Plant and Equipment, Net Goodwill Other Intangibles Deferred Income Taxes Other Assets 516,745 111,913 138,722 $4, Total assets LIABILITIES AND STOCKHOLDERS' EQUITY

Explanation / Answer

accounts receivable turnover of Tootsis roll= $528,369

accounts receivable turnover of Hershey= $6,080,788

Average collection period= days*AR/credit sale

Where:
Days = Total amount of days in period
AR = Average amount of accounts receivables
Credit Sales = Total amount of net credit sales during period

or 365/ Receivable turnover

average debtors of Hershey=399499+390061/2 $394,780 Receivable turnover=net credit sale/average debtors $6080788/$394780 15.4 Aevarge collection period of Hershey=365/Recivable turnover 23.7 average debtors of Tootsis=41895+37394/2 $39,645 Receivable turnover=net credit sale/average debtors $528369/$39645 13.32 Aevarge collection period of Tootsis=365/Recivable turnover 27.4

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