Broadening Your Perspective 10-2 The financial statements of The Hershey Company and Tootsie Roll are presented below.
BYP10-2The Hershey Company
Broadening Your Perspective 10-2
The financial statements ofThe Hershey Company andTootsie Roll are presented below.
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.
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 |
: 1 |
:1 | |||||
Based on the information contained in these financial statements, compute the following 2011 ratios for each company. (Round answers to 1 decimal places, e.g. 15.2% or 15.2 times.)
|
(1) |
Debt to assets. |
|
(2) |
Times interest earned. (Hershey’s total interest expense for 2011 was $94,780,000. See Tootsie Roll’s Note 6 for its interest expense.) |
|
Hershey |
Tootsie Roll | ||||||
|
Debt to assets |
% |
% | |||||
|
Times interest earned |
times |
times |
-
Rating:
/5
Solution: Broadening Your Perspective 10-2 The financial statements ofThe Hershey Company andTootsie Roll are presented below.