Hershey company financial analysis. Financial Analysis of The Hershey Company 2022-11-06
Hershey company financial analysis
The Hershey Company is a leading global confectionery company that was founded in 1894 by Milton S. Hershey in Pennsylvania, United States. It is known for its iconic chocolate brands such as Hershey's, Reese's, and Kit Kat, as well as its non-chocolate brands such as Jolly Rancher and Ice Breakers. In this essay, we will conduct a financial analysis of the Hershey Company to understand its financial health and performance.
First, let's start by looking at the company's revenue and profitability. According to its 2020 annual report, the Hershey Company generated $7.45 billion in revenue, which represents a 4.5% increase compared to the previous year. The company's net income for 2020 was $738.2 million, which represents a 6.8% increase compared to the previous year. The company's gross profit margin, which is the percentage of revenue that remains after deducting the cost of goods sold, was 54.5% in 2020. This indicates that the company is able to generate a significant amount of profit from its sales.
Next, let's look at the company's liquidity, which is a measure of its ability to pay its short-term debts and obligations. The Hershey Company has a current ratio of 1.34, which is considered strong. This means that the company has enough current assets, such as cash and marketable securities, to cover its current liabilities, such as accounts payable and short-term debt. The company also has a quick ratio of 0.93, which is considered good. This ratio measures the company's ability to meet its short-term obligations using only its most liquid assets.
Another important financial indicator to consider is the company's debt level. The Hershey Company has a debt-to-equity ratio of 1.07, which is considered moderate. This means that the company has a moderate amount of debt relative to its equity. It is important to note that high levels of debt can increase a company's risk, as it can be more difficult to make debt payments in times of financial strain. However, it is also important to consider that some level of debt can be necessary for a company to finance its operations and growth.
Finally, let's look at the company's stock performance. The Hershey Company's stock price has increased by approximately 40% over the past year, which is a strong performance. The company's dividend yield, which is the annual dividend per share divided by the stock price, is currently 2.2%. This means that the company is returning a portion of its profits to its shareholders in the form of dividends.
In conclusion, the financial analysis of the Hershey Company shows that it is a financially healthy and successful company. It has a strong revenue and profitability, good liquidity, a moderate level of debt, and a strong stock performance. These factors combined indicate that the Hershey Company is well-positioned to continue its growth and success in the future.
Financial Analysis of The Hershey Company
Sales to net fixed assets for Hershey Company is 3. This ratio is a more reliable variation of the Current ratio because inventory, prepaid expenses, and other less liquid current assets are removed from the calculation. . . In general, a lower number is preferred because it indicates a company has a satisfactory level of working capital. The quick ratio determines what a company can pay on immediately.
The Hershey Company financial statements: Balance sheet and Income statement
. A higher number is preferred for this commonly analyzed ratio. This is a type of a liquidity ratio. Source: FactSet Indexes: Index quotes may be real-time or delayed as per exchange requirements; refer to time stamps for information on any delays. . Their EPS has also steadily increased since 2007. .
Financial Analysis of The Hershey Company
If both KR and WFM sold their entire inventory, they would be in the same comparable position. This ratio relates the ability of a company to generate sales using its working capital to determine how efficiently working capital is being used. Favorable liquidity ratios are critical to a company and its creditors within a business or industry that does not provide a steady and predictable cash flow. The Beta measures systematic risk based on how returns on Hershey correlated with the market. The calculation of odds of distress for Hershey stock is tightly coupled with the Probability of Bankruptcy. The third section is about investing activities, which shows what Hershey has done with the money that it received from the sale of assets or what it spent to acquire new ones. The top competitor eventually has a gain over the market and benefits the most.
Financial Analysis of Hershey Corporation
Note that this particular ratio uses earnings before interest and taxes because this is the income amount available to cover interest. . The new flavors, available for a limited time, keep the taste of the artisans ' original creations and include Tres Leches Brigadeiro, Banana Rum Jam, Chocolate Caramelized Oat, Spiced Pecan Turtle, Ginger Molasses Cookie, and Applewood Smoked Caramel Almond ice creams. To draw a conclusion from the analysis the individual scores are weighted equally to get an overall score ranging from -2 and +2. .
THE HERSHEY COMPANY : Fundamental Analysis and Financial Ratings
. . . This could be indicative of mismanagement of current assets and less cash flow for investors Parrino et al. .
Securities and Exchange Commission SEC through the Electronic Data Gathering, Analysis, and Retrieval system EDGAR about 10,000 largest publicly traded companies. See Stock Movers: Gainers, decliners and most actives market activity tables are a combination of NYSE, Nasdaq, NYSE American and NYSE Arca listings. Sources: FactSet, Tullett Prebon Currencies: Currency quotes are updated in real-time. International stock quotes are delayed as per exchange requirements. Working capital current assets — current liabilities is another measure of liquidity and the ability to cover short-term obligations. Next, are operating activities, which show how much money Hershey had leftover after paying for its expenses. They base that aggregation on similar economic characteristics, products and services, production processes, types of customers, distribution methods as well as the similar nature of the regulatory environment.
Financial Analysis of The Hershey Company, Sample of Business plans
The main aim of the Milka distribution strategy was the idea is to establish a loyal following and draw consumers to the products. . . If Beta is less than 0 Hershey generally moves in the opposite direction as compared to the market. . Financially they also have a large profit margin now at 8. .
The Hershey Company (HSY): annual reports and key ratios comparison
This number can be calculated in two ways: by subtracting the total of all operating expenses from net revenue or by adding up changes to cash and other assets or liabilities on this part of the statement. . . . . A lower number suggests there is both a lower risk involved for creditors and strong, long-term, financial security for a company.
. The comparison is based on official financial statements filed with the U. Both the healthcare industry and the confectionary wholesaling industry are supposed to grow over the next few years. . Company's financial ratios are compared with the median values of ratios of all companies and of companies within the same industry, and also with the quartiles of those ratios. Sales to assets for Hershey Company is 1.