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Comparative Analysis: Hershey & Tootsie Financial Ratios

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Using the financial statements for Tootsie Roll Industries and The Hershey Company, respectively, calculate and compare the financial ratios listed below for the year ended on December 31, 2007.

Prepare a four-column worksheet in Excel, with the left-most column (column 1) to write the ratio names, the second column from the left (column 2) to show the calculation of each ratio for Tootsie Roll Industries, the second column from the right (column 3) to show the calculation of each ratio for The Hershey Company, and the right-most column (column 4) to include your DETAILED comments about each ratio and what the ratio tells you about each company under study. Calculate each of the following six ratios.

Earnings per Share
Current Ratio
Gross Profit Rate
Profit Margin Ratio
Inventory Turnover Ratio
Days in Inventory (Average Age of Inventory)

Payout ratio
Return on Common Stockholders' Equity Ratio
Free Cash Flow
Current Cash Debt Coverage ratio
Cash Debt Coverage ratio
Price/Earnings Ratio [For the purpose of this ratio, use the market price per share as of the last working day of the year 2007 for each company]

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Solution Summary

This solution provides a comparative analysis for Hershey and Tootsie financial ratios.

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