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# Ratio analysis for Tootsie Roll and Hershey Foods

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Comments the ratio analysis should include ratios for the years 2008 and 2009. Also should include comparisons between Tootsie Roll and Hershey Foods. Please see attached

Hershey Liquid 2008 Tootsie Roll Liquid 2008
current ratio = current assets/current liability current ratio = current assets/current liability
1,344,945 /1270212 = 1.0588 187,979  / 59,252   = 3.173

Quick ratio = (Current asssets - inventory)/Current liability Quick ratio = (Current asssets - inventory)/Current liability
(1,344,945 - 592,530)/1270212 = 0.592 (187979 - 55,584) / 59,252 = 2.234

Hershey Liquid 2009 Tootsie Roll Liquid 2009
current ratio = current assets/current liability current ratio = current assets/current liability
1,385,434  / 910,628 = 1.521 211878/56066 = 3.779

Quick ratio = (Current asssets - inventory)/Current liability Quick ratio = (Current asssets - inventory)/Current liability
(1,385,434 - 519,712 )/ 910,628  = 0.951 (211878 - 56387)/56066 = 2.773

Comments the ratio analysis should include ratios for the years 2008 and 2009 and should include comparisons between Tootsie Roll and Hershey Foods.

#### Solution Preview

Liquid ratios
Comments the ratio analysis should include ratios for the years 2008 and 2009. Also should include comparisons between Tootsie Roll and Hershey Foods. Please see attached

Analysis of Current ...

#### Solution Summary

Solution helps in calculating ratios for the years 2008 and 2009 and comparisons between Tootsie Roll and Hershey Foods

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## Comparative Analysis Problem: Tootsie Roll VS. Hershey FoodsThe problem includes the calculation of certain ratios for both the companies and their comparison regaring the liquidity, profitability and solvency of both the companies.

Comparative Analysis Problem: Tootsie Roll VS. Hershey Foods

The financial stataments of Tootsie Rolls and Hershey Foods are attached. Hershey's average number of shares outstanding was 253,881,000 and Tootsie Rolls was 52,366,000.

Instructions:

(a) For each company calculate the following values:

(1) Working Capital (2) Current Ratio (3) Debt to total Asset Ratio
(4) Free Cash Flow (5) Earning Per Share.
( Hint: When calculating free cash flow, consider business acquisition to be part of capital expenditure.)

(b) Based on your findings above, discuss the relative liquidity, solvency and the profitability of the two companies.

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