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Unformatted text preview: Solution to part 1 of the project: Tootsie Roll Hersheys Earning per share As given in the income statement $0.94 $0.96 Current ratio Current assets $199,726 = 3.45 $1,426,574 = 0.88 Current liabilities $57,972 $1,618,770 Gross Profit Ratio Gross profit amount $168,673 = 33.9% $1,631,569 = 33.0% Total Revenues $497,717 $4,946,716 Profit margin ratio Net income $51,625 = 10.4% $214,154 = 4.3% Total Revenues $497,717 $4,946,716 Inventory Turnover Cost of goods sold $327,695 = 5.4 $3,315,147 5.3 Average Inventory $60,680 $624,503 Days in Inventory 365 days 365 = 68 365 = 69 Inventory turnover 5.4 days 5.3 days Earnings per share: Hershey has a slightly higher price-earnings ratio, suggesting investors are a bit more optimistic about its prospects. Based on the current ratio , Tootsie Roll is much more liquid. Tootsie Rolls current ratio is more than one and 3.9 times as large as Hersheys. Inventory turnover: Tootsie Roll has a slightly higher inventory turnover rate than Hershey. That is the reason why Tootsie has Days in Inventory shorter 1 da Gross Profit Ratio and Profit Margin Ratio:...
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- Spring '11
- Income Statement