Balance Hersheys

Marina Covadonga Vázquez Rovira

Ratios:[pic 1]

Strengths:

• Assets turn ratio for every dollar in Assets, Hershey’s generates 1.35 dollars in sales.
• Receivable days: Hershey’s takes 28 days to receive their payments, which means that the have a good cash flow.
• ROA: For every dollar that Hershey’s invest in assets they generate 14% of net income.
• ROE: For every dollar the investors put in the company they get 86%.
• ROS:10% of a dollar they sale turns into profit.

Weaknesses:

• Kellogg’s and Nestle have a low asset turnover ratio which could mean that they are having slow sales, or they are holding obsolete inventories.
•  The receivable days of the other companies are more than one month, for nestle almost 2 moths, which means they are not good enough negotiating or maybe one of their customers is having problems to pay.
• ROA: For every dollar that Hershey’s invest in assets they generate 14% of net income.
• ROE: If you invest in Hershey’s you will have the higher ROE of the market.

Why to invest in Hershey’s?

Hershey is a good option to invest since it is the largest chocolate company in USA. We are buying new companies which means that we are going to offer new products to our customers. Buy companies is a way to increase in total number of the company each year. On the other hand, as you know because you are experts in the chocolate industry, Cacao is having a lot of problems because de demand is bigger than the offer. We can get rid of the cacao because our min commitment is to offer quality that is why we created “Cocoa for Good program”. Where Hershey is investing more than USD 500 million in the hope of producing its iconic chocolate kisses in a more sustainable way.

Through its Cocoa for Good program, the company will spend funds until 2030 to support four key areas: feeding children, empowering young people, building prosperous communities and preserving natural ecosystems. The objectives of the initiative include eliminating child labor and increasing cocoa production in shade, which can last up to 15 years longer than plants growing in full sun.

References:

Pérez, G. Por qué Hershey gastará más de 500 millones de dólares en producir chocolates de forma más sostenible. April, 2018. Retrieved from: https://www.infobae.com/america/wapo/2018/04/11/por-que-hershey-gastara-mas-de-500-millones-de-dolares-en-producir-chocolates-de-forma-mas-sostenible/

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