Hershey Versus Tootes

376 Words2 Pages
Ola Odutola 06/13/2010 The Hershey Company Ratio Payout ratio dividend per share/earning per share 1.135/.96 1.18 Return on Common Stockholders' Equity Ratio (net profit - preferred share dividends)/(average shareholders' equity). Cash Provided by Operations - Capital Expenditures - Cash Dividends Cash Provided by Operations / Average Current Liabilities 214154/((592922+683423)/2) 33.56% Free Cash Flow Current Cash Debt Coverage ratio $778,836-$304,353-$252,263 $778,836/(($1,618,770+$1,453,538)/2) $222,220.00 50.70% Cash Debt Coverage ratio Stock Price per share /Earnings Ratio Cash Provided by Operations /Average Total Liabilities Stock Price per Share(on 12/31/2007) / Earning Per Share $778,836/(($3,623,593+ $3,474,142)/2) 39.40/0.96 21.95% 41.04 Tootsie Roll Industries Ratios 0.32/0.94 0.34 Interpretation and comparison between the two companies' ratios 51625/((638230+630681)/2) 8.14% A higher payout ratio could mean that the company is mature and is doing well. Both Hershey and Tootsie are mature. Even though Tootsie has a lower payout ratio it could definitely afford to payout more, but chooses to retain a greater percentage The higher Return on Common Stockholders' equity is as a result of Hershey having a higher earnings and a lower common stock equity as a result of the company's systematic purchase of its own common stocks. Hershey is larger company than Tootsie. The gap between them is evident in the free cash flow. Hershey is also able to leverage more. The current cash debt coverage ratio for Tootsie is greater implying that the cash flow from operating activities will pay for a higher proportion of current liabilities for Tootsie as compared to Hershey. The cash debt coverage ratio for Tootsie is higher indicating that the operating cash flow can meet a higher proportion of total liabilities. Investors
Open Document