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2.Finance+Hersheys+Tootsie+Roll

# 2.Finance+Hersheys+Tootsie+Roll - Tootsie Roll Industries...

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Tootsie Roll Industries Ratios The Hershey Company Ratio Interpretation and comparison between the two companies' ratios Receivable Turnover Ratio 497,717/((32,371+35,075)/2) =14.76 4,946,716/((487,285+522,673)/2) =9.80 The receivable turnover ratio measures the number of times the receivables are collected and so indicates the efficiency in receivables collection. The turnover ratio for Tootsie is much higher as compared to Hershey and implies that Tootsie is much more efficient in collecting the receivables. Average Collection Period 32,371/(497,717/365) =23.74 days 487,285/(4,946,716/365) =35.95 days The average collection period denotes the number of days the receivables are outstanding before they are collected and so also indicate the efficiency of collection. As above, Tootsie collects receivables much faster as compared to Hershey. This would also means that Tootsie cash flow is better and would have lower amount invested in receivables as compared to Hershey Assets Turnover Ratio 497,717/((812,725+791,639)/2) =0.62 4,946,716/((4,247,113+4,157,565)/2) =1.18

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2.Finance+Hersheys+Tootsie+Roll - Tootsie Roll Industries...

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