Week 3 assignment in wileyplus: *problem 9-7a *exercise 10-5

Broadening Your Perspective 10-2
The financial statements of The Hershey Company and Tootsie Roll are presented below.

  THE HERSHEY COMPANY
CONSOLIDATED STATEMENTS OF INCOME
 
  For the years ended December 31,   2011   2010   2009  
  In thousands of dollars except per share amounts                
  Net Sales   $6,080,788     $5,671,009   $5,298,668  
  Costs and Expenses:                
    Cost of sales   3,548,896     3,255,801   3,245,531  
    Selling, marketing and administrative   1,477,750     1,426,477   1,208,672  
    Business realignment and impairment (credits) charges, net   (886 )   83,433   82,875  
      Total costs and expenses   5,025,760     4,765,711   4,537,078  
  Income before Interest and Income Taxes   1,055,028     905,298   761,590  
    Interest expense, net   92,183     96,434   90,459  
  Income before Income Taxes   962,845     808,864   671,131  
    Provision for income taxes   333,883     299,065   235,137  
  Net Income   $628,962     $509,799   $435,994  
  Net Income Per Share—Basic—Class B Common Stock   $2.58     $2.08   $1.77  
  Net Income Per Share—Diluted—Class B Common Stock   $2.56     $2.07   $1.77  
  Net Income Per Share—Basic—Common Stock   $2.85     $2.29   $1.97  
  Net Income Per Share—Diluted—Common Stock   $2.74     $2.21   $1.90  
  Cash Dividends Paid Per Share:                
    Common Stock   $1.3800     $1.2800   $1.1900  
    Class B Common Stock   1.2500     1.1600   1.0712  
  The notes to consolidated financial statements are an integral part of these statements and are included in the Hershey’s 2011 Annual Report, available at www.thehersheycompany.com.  

  THE HERSHEY COMPANY
CONSOLIDATED BALANCE SHEETS
 
  December 31,   2011   2010  
  In thousands of dollars              
  ASSETS              
  Current Assets:              
    Cash and cash equivalents   $693,686     $884,642    
    Accounts receivable—trade   399,499     390,061    
    Inventories   648,953     533,622    
    Deferred income taxes   136,861     55,760    
    Prepaid expenses and other   167,559     141,132    
      Total current assets   2,046,558     2,005,217    
  Property, Plant and Equipment, Net   1,559,717     1,437,702    
  Goodwill   516,745     524,134    
  Other Intangibles   111,913     123,080    
  Deferred Income Taxes   38,544     21,387    
  Other Assets   138,722     161,212    
      Total assets   $4,412,199     $4,272,732    
  LIABILITIES AND STOCKHOLDERS’ EQUITY              
  Current Liabilities:              
    Accounts payable   $420,017     $410,655    
    Accrued liabilities   612,186     593,308    
    Accrued income taxes   1,899     9,402    
    Short-term debt   42,080     24,088    
    Current portion of long-term debt   97,593     261,392    
      Total current liabilities   1,173,775     1,298,845    
  Long-term Debt   1,748,500     1,541,825    
  Other Long-term Liabilities   617,276     494,461    
      Total liabilities   3,539,551     3,335,131    
  Commitments and Contingencies          
  Stockholders’ Equity:              
    The Hershey Company Stockholders’ Equity              
      Preferred Stock, shares issued: none in 2011 and 2010          
      Common Stock, shares issued: 299,269,702 in 2011 and 299,195,325 in 2010   299,269     299,195    
      Class B Common Stock, shares issued: 60,632,042 in 2011 and 60,706,419 in 2010   60,632     60,706    
      Additional paid-in capital   490,817     434,865    
      Retained earnings   4,699,597     4,374,718    
      Treasury—Common Stock shares, at cost: 134,695,826 in 2011 and 132,871,512 in 2010   (4,258,962 )   (4,052,101 )  
      Accumulated other comprehensive loss   (442,331 )   (215,067 )  
        The Hershey Company stockholders’ equity   849,022     902,316    
    Noncontrolling interests in subsidiaries   23,626     35,285    
        Total stockholders’ equity   872,648     937,601    
        Total liabilities and stockholders’equity   $4,412,199     $4,272,732    

  THE HERSHEY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
  For the years ended December 31,   2011   2010   2009  
  In thousands of dollars                    
  Cash Flows Provided from (Used by) Operating Activities                    
    Net income   $628,962     $509,799     $435,994    
    Adjustments to reconcile net income to net cash provided from operations:                    
    Depreciation and amortization   215,763     197,116     182,411    
    Stock-based compensation expense, net of tax of $15,127, $17,413 and $19,223, respectively   28,341     32,055     34,927    
    Excess tax benefits from stock-based compensation   (13,997 )   (1,385 )   (4,455 )  
    Deferred income taxes   33,611     (18,654 )   (40,578 )  
    Gain on sale of trademark licensing rights, net of tax of $5,962   (11,072 )          
    Business realignment and impairment charges, net of tax of $18,333, $20,635 and $38,308, respectively   30,838     77,935     60,823    
    Contributions to pension plans   (8,861 )   (6,073 )   (54,457 )  
    Changes in assets and liabilities, net of effects from business acquisitions and divestitures:                    
    Accounts receivable—trade   (9,438 )   20,329     46,584    
    Inventories   (115,331 )   (13,910 )   74,000    
    Accounts payable   7,860     90,434     37,228    
    Other assets and liabilities   (205,809 )   13,777     293,272    
  Net Cash Provided from Operating Activities   580,867     901,423     1,065,749    
  Cash Flows Provided from (Used by) Investing Activities                    
    Capital additions   (323,961 )   (179,538 )   (126,324 )  
    Capitalized software additions   (23,606 )   (21,949 )   (19,146 )  
    Proceeds from sales of property, plant and equipment   312     2,201     10,364    
    Proceeds from sales of trademark licensing rights   20,000            
    Business acquisitions   (5,750 )       (15,220 )  
  Net Cash (Used by) Investing Activities   (333,005 )   (199,286 )   (150,326 )  
  Cash Flows Provided from (Used by) Financing Activities                    
    Net change in short-term borrowings   10,834     1,156     (458,047 )  
    Long-term borrowings   249,126     348,208        
    Repayment of long-term debt   (256,189 )   (71,548 )   (8,252 )  
    Proceeds from lease financing agreement   47,601            
    Cash dividends paid   (304,083 )   (283,434 )   (263,403 )  
    Exercise of stock options   184,411     92,033     28,318    
    Excess tax benefits from stock-based compensation   13,997     1,385     4,455    
    Contributions from noncontrolling interests in subsidiaries       10,199     7,322    
    Repurchase of Common Stock   (384,515 )   (169,099 )   (9,314 )  
  Net Cash (Used by) Financing Activities   (438,818 )   (71,100 )   (698,921 )  
  (Decrease) Increase in Cash and Cash Equivalents   (190,956 )   631,037     216,502    
  Cash and Cash Equivalents as of January 1   884,642     253,605     37,103    
  Cash and Cash Equivalents as of December 31   $693,686     $884,642     $253,605    
  Interest Paid   $97,892     $97,932     $91,623    
  Income Taxes Paid   292,315     350,948     252,230    

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data)
      For the year ended December 31,
      2011   2010   2009  
  Net product sales   $528,369     $517,149     $495,592    
  Rental and royalty revenue   4,136     4,299     3,739    
  Total revenue   532,505     521,448     499,331    
  Product cost of goods sold   365,225     349,334     319,775    
  Rental and royalty cost   1,038     1,088     852    
  Total costs   366,263     350,422     320,627    
  Product gross margin   163,144     167,815     175,817    
  Rental and royalty gross margin   3,098     3,211     2,887    
  Total gross margin   166,242     171,026     178,704    
  Selling, marketing and administrative expenses   108,276     106,316     103,755    
  Impairment charges           14,000    
  Earnings from operations   57,966     64,710     60,949    
  Other income (expense), net   2,946     8,358     2,100    
  Earnings before income taxes   60,912     73,068     63,049    
  Provision for income taxes   16,974     20,005     9,892    
  Net earnings   $43,938     $53,063     $53,157    
                       
  Net earnings   $43,938     $53,063     $53,157    
  Other comprehensive earnings (loss)   (8,740 )   1,183     2,845    
  Comprehensive earnings   $35,198     $54,246     $56,002    
                       
  Retained earnings at beginning of year.   $135,866     $147,687     $144,949    
  Net earnings   43,938     53,063     53,157    
  Cash dividends   (18,360 )   (18,078 )   (17,790 )  
  Stock dividends   (47,175 )   (46,806 )   (32,629 )  
  Retained earnings at end of year   $114,269     $135,866     $147,687    
                       
  Earnings per share   $0.76     $0.90     $0.89    
                       
  Average Common and Class B Common shares outstanding   57,892     58,685     59,425    
(The accompanying notes are an integral part of these statements.)  

  CONSOLIDATED STATEMENTS OF
Financial Position
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data)
  Assets   December 31,  
        2011   2010  
  CURRENT ASSETS:              
    Cash and cash equivalents   $78,612     $115,976    
    Investments   10,895     7,996    
    Accounts receivable trade, less allowances of $1,731 and $1,531   41,895     37,394    
    Other receivables   3,391     9,961    
    Inventories:              
    Finished goods and work-in-process   42,676     35,416    
    Raw materials and supplies   29,084     21,236    
    Prepaid expenses   5,070     6,499    
    Deferred income taxes   578     689    
    Total current assets   212,201     235,167    
  PROPERTY, PLANT AND EQUIPMENT, at cost:              
    Land   21,939     21,696    
    Buildings   107,567     102,934    
    Machinery and equipment   322,993     307,178    
    Construction in progress   2,598     9,243    
        455,097     440,974    
    Less—Accumulated depreciation   242,935     225,482    
    Net property, plant and equipment   212,162     215,492    
  OTHER ASSETS:              
    Goodwill   73,237     73,237    
    Trademarks   175,024     175,024    
    Investments   96,161     64,461    
    Split dollar officer life insurance   74,209     74,441    
    Prepaid expenses   3,212     6,680    
    Equity method investment   3,935     4,254    
    Deferred income taxes   7,715     9,203    
    Total other assets   433,493     407,300    
    Total assets   $857,856     $857,959    
  Liabilities and Shareholders’ Equity   December 31,  
        2011   2010  
  CURRENT LIABILITIES:              
    Accounts payable   $10,683     $9,791    
    Dividends payable   4,603     4,529    
    Accrued liabilities   43,069     44,185    
    Total current liabilities   58,355     58,505    
  NONCURRENT LIABILITES:              
    Deferred income taxes   43,521     47,865    
    Postretirement health care and life insurance benefits   26,108     20,689    
    Industrial development bonds   7,500     7,500    
    Liability for uncertain tax positions   8,345     9,835    
    Deferred compensation and other liabilities   48,092     46,157    
    Total noncurrent liabilities   133,566     132,046    
  SHAREHOLDERS’ EQUITY:              
    Common stock, $.69-4/9 par value—120,000 shares authorized—36,479 and 36,057 respectively, issued   25,333     25,040    
    Class B common stock, $.69-4/9 par value—40,000 shares authorized—21,025 and 20,466 respectively, issued   14,601     14,212    
    Capital in excess of par value   533,677     505,495    
    Retained earnings, per accompanying statement   114,269     135,866    
    Accumulated other comprehensive loss   (19,953 )   (11,213 )  
    Treasury stock (at cost)—71 shares and 69 shares, respectively   (1,992 )   (1,992 )  
    Total shareholders’ equity   665,935     667,408    
    Total liabilities and shareholders’ equity   $857,856     $857,959    

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Cash Flows (in thousands)

          For the year ended December 31,    
          2011   2010   2009    
  CASH FLOWS FROM OPERATING ACTIVITIES:                      
      Net earnings   $43,938     $53,063     $53,157      
      Adjustments to reconcile net earnings to net cash provided by operating activities:                      
          Depreciation   19,229     18,279     17,862      
          Impairment charges           14,000      
     

    Impairment of equity method investment

          4,400      
     

    Loss from equity method investment

  194     342     233      
     

    Amortization of marketable security premiums

  1,267     522     320      
     

    Changes in operating assets and liabilities:

                     
     

    Accounts receivable

  (5,448 )   717     (5,899 )    
     

    Other receivables

  3,963     (2,373 )   (2,088 )    
     

    Inventories

  (15,631 )   (1,447 )   455      
     

    Prepaid expenses and other assets

  5,106     4,936     5,203      
     

    Accounts payable and accrued liabilities

  84     2,180     (2,755 )    
     

    Income taxes payable and deferred

  (5,772 )   2,322     (12,543 )    
     

    Postretirement health care and life insurance benefits

  2,022     1,429     1,384      
     

    Deferred compensation and other liabilities

  2,146     2,525     2,960      
     

    Others

  (708 )   310     305      
      Net cash provided by operating activities   50,390     82,805     76,994      
  CASH FLOWS FROM INVESTING ACTIVITIES:                      
     

  Capital expenditures

  (16,351 )   (12,813 )   (20,831 )    
     

  Net purchase of trading securities

  (3,234 )   (2,902 )   (1,713 )    
     

  Purchase of available for sale securities

  (39,252 )   (9,301 )   (11,331 )    
     

  Sale and maturity of available for sale securities

  7,680     8,208     17,511      
     

  Net cash used in investing activities

  (51,157 )   (16,808 )   (16,364 )    
    CASH FLOWS FROM FINANCING ACTIVITIES:                      
     

    Shares repurchased and retired

  (18,190 )   (22,881 )   (20,723 )    
     

    Dividends paid in cash

  (18,407 )   (18,130 )   (17,825 )    
     

    Net cash used in financing activities

  (36,597 )   (41,011 )   (38,548 )    
  Increase (decrease) in cash and cash equivalents   (37,364 )   24,986     22,082      
  Cash and cash equivalents at beginning of year   115,976     90,990     68,908      
  Cash and cash equivalents at end of year   $78,612     $115,976     $90,990      
  Supplemental cash flow information                      
     

  Income taxes paid

  $16,906     $20,586     $22,364      
     

  Interest paid

  $38     $49     $182      
     

  Stock dividend issued

  $47,053     $46,683     $32,538      
(The accompanying notes are an integral part of these statements.)  

NOTE 6—OTHER INCOME (EXPENSE), NET:
Other income (expense), net is comprised of the following:

    2011   2010   2009  
Interest and dividend income   $1,087   $879   $1,439  
Gains (losses) on trading securities relating to deferred compensation plans   29   3,364   4,524  
Interest expense   (121)   (142)   (243)  
Impairment of equity method investment.   _   _   (4,400)  
Equity method investment loss   (194)   (342)   (233)  
Foreign exchange gains (losses)   2,098   4,090   951  
Capital gains (losses)   (277)   (28)   (38)  
Miscellaneous, net   274   537   100  
    $2,946   $8,358   $2,100  

As of December 31, 2009, management determined that the carrying value of an equity method investment was impaired as a result of accumulated losses from operations and review of future expectations. The Company recorded a pre-tax impairment charge of $4,400 resulting in an adjusted carrying value of $4,961 as of December 31, 2009. The fair value was primarily assessed using the present value of estimated future cash flows.

 

 

[removed] Don’t show me this message again for the assignment

Based on the information contained in these financial statements, compute the current ratio for 2011 for each company. (Round answers to 2 decimal places, e.g. 15.25.)

    Hershey   Tootsie Roll  
Current ratio   [removed] : 1   [removed] :1  

 

 

[removed] Don’t show me this message again for the assignment

Place this order or similar order and get an amazing discount. USE Discount code “GET20” for 20% discount