reporting case .docx - Lin Li Corporate Financial Reporting...

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Lin Li Corporate Financial Reporting According to the ratio data of Wrigley and Hershey, Wrigley had a ROE of 23.5% in 2005, and Hershey had a ROE of 45.7% in 2005. It appears that Hershey was making a better payback than Wrigley on every dollar the investors put in. However, that’s not necessarily true, because increasing liability can generate higher ROE. Return on net operating assets(RONA) can better indicate how productive a company is. Based on the data we have on Wrigley, from 2002 to 2005, the RONA decreased to 19.1% in 2005. Hershey had a higher RONA at 21%. The trend of Hershey’s RONA was up and down, reflecting that the company was trying to make progress. RONA simply focus on how assets generate revenue. When viewing RONA, Hershey was more productive than Wrigley, because Hershey had a smaller amount of total assets than Wrigley. Based on DuPont Model analysis, cash conversion cycle can point out how efficiently a company converts resource inputs into cash flow. By calculating the cash conversion cycle, Wrigley had a 70.9 day
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  • Fall '19
  • Balance Sheet, Generally Accepted Accounting Principles, Wrigley, ratio data of Wrigley

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