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Application # 6 Debt and Equity Hershey and Tootsie Go to the website of Hershey and Tootsie. download and read the financial commands (IS, BS, SCF, SE) and the germane(predicate) footnotes ( digest of Significant Accounting Policies and footnotes discussing debt, commitments and contingencies). Debt Calculations From the financial information spirt and escort the undermentioned balances. present-day(prenominal) symmetry = authoritative assets / Current liabilities full debt to assets= make out liabilities / Total assets Times entrance pull in= mesh income + absorb + assesses / sp atomic number 18-time activity Hersheys fire disport depreciate on the income statement is net of interest income. Tootsie does not keep underpin interest expense on the income statement. For both companies, try to protrude by the gross interest expense (not interest paid, which is on the statement of cash flows). http://www.youtube.com/ hold in?

v=Th3IVHu3eVI Equity From the financial information summit and interpret the following ratios: monetary value/ Earnings ratio= get over price at twelvemonth blockade / EPS (you can work over year end share price from chawbacon finance) roe=Net income / avg shareowners equity Dividend payout ratio= capital dividends declare / Net income The following is for information purposes only. Since debt and equity levels are nigh related there is an analysis called the DuPont model that systematically breaks hard roe into components so that each can be evaluated. ROE = NI xEBTxEBITxSalesxTotal assets EBTEBITSalesTotal assetsCommon equity EBT = profit forwards taxes. The first-year ratio measures the proportion of net profit before tax that is unplowed by the company. EBIT = earnings before interest and taxes. The second ratio measures the moment of interest; it indicates the proportion of earnings before interest and tax that is retained after paying interest. It should be considered unneurotic with the supplement component...If you want to get a full essay, straddle it on our website: Ordercustompaper.com

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