FI504_Project_GVerdree - Tootsie Roll 2007 LIQUIDITY...

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Hershey Co. Explanation 2007 2006 2007 2006 LIQUIDITY Working Capital $141,754 $128,706 ($192,532) ($35,726) Hershey Co.'s liabilities exceed their assets and could lead them to bankruptcy. Current Ratio 3.45 3.07 0.88 0.98 TR's liquidity is more adequate than the Hershey Company. Current Cash to Debt Coverage 1.5 0.93 0.51 0.47 TR's cash to debt is more Ratio solvent than Hershey Co. Inventory 5.4 5.13 5.31 4.93 Both companies turn Turnover Ratio inventory around the same rate. Days in Inventory 68 71 69 74 Tootsie Roll is slightly more efficient in its inventory management that Hershey Co. Receivables 13.27 13.35 9.8 9.79 Tootsie Roll moves quicker Turnover Ratio at turning their receivables into cash. Average Collection 27.51 27.34 37.24 37.28 Tootsie Roll is able to zero out Period receivables at a faster rate than Hershey Co. SOLVENCY Debt To Total Assets Ratio 0.22 0.2 0.85 0.84 Hershey shows the greater risk that they may be unable to pay its debts as they come due. Cash debt
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FI504_Project_GVerdree - Tootsie Roll 2007 LIQUIDITY...

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