Hershey's Financial Statement Comparison

HERSHEY'S COMPANY

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9ODQ3MzR8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

1) Hershey's 2010:

Total Revenue: $5,671,009

Total Expenses: $5,161,210

Tax Provision: $299,065

Net Income: $509,799

2) Hershey's Component Percentages: (dividing by net sales)

Total Expenses: $5,161,210 / $5,671,009=91%

Net Income: $509,799 / $5,671,009=9%

3) Compare Hershey's to...Nike: 

Total Revenue: 6,696 (millions)

Total Expenses: 3,364.2 (millions)  

Net Income: 1,906.7 (millions)

Nike's Component Percentages:

Total Expenses: 17%

Net Income: 10%

Total Sales: 19,014

link: http://alexnicolet2011.blogspot.com/

*Nike has a better component percentage than Hershey's. Nike has fewer expenses are a larger net income.

Balance Sheet:

Total Assets: $4,272,732

Total Liabilities: $3,335,131
Total Owner's Equity: $937,601

Based on the information above I would say that the Hershey's Company is financially strong. They have net income and overall more assets than liabilities. After looking at a chart that dates back to 2005, Hershey's has been steadily increasing their numbers over the years-another sign of financial strength.

Hershey's Fiscal Period

1) Hershey's is the largest chocolate manufacturer in North America. I chose to research Hershey's because it is one of the most succesful companies in the country and I enjoy thinking about chocolate, of course! Hershey's has been extremely successful since it's founding in 1894 and has continued to sustain it's business even during recent times of economic struggle.

2) http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9ODQ3MzR8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

3) Hershey's fiscal period is from January 1 to December 31. The company files their financial statements on February 18.

4) It seems that Hershey's chose to have their fiscal period built around their highest times of sales; the holidays. Hershey's sales increase during Thanksgiving, Christmastime, and Valentines day. Putting the end of the fiscal period a little after the end of the holidays gives the company suficient time to produce its end of the year statements.

 

Interest Rates

1.  What is APY?

APY stands for "Annual Percentage Yield" and represents a yearly interest rate-or the rate of return- in which one pays their bank for an investment.

2.  What Institution had the highest APY and what was it?  Who had the lowest and what was the rate?

American Express Bank has a 1.00% APY and California First National Bank had a 0.65% APY.

3.  What is meant by FDIC Insured?

 FDIC stands for the "Federal Deposit Insurance Corporation" an is an independent government agency that protects people's deposits in insured U.S. banks in case they were to fail.

4.  Is it important to you that a bank be FDIC Insured?  Explain why or why not.
I think it is important that a bank have this type of insurance since it has been extremely successful since 1934. No depositor has lost any money insured by this agency.

Part 2:
Spend sometime looking into rates that banks charge for home ownership (mortgages)...  


Answer the following question:
Based on the information you found on mortgage rates above, what are two conclusions you have related to current mortgage rates?
1) The APR is 1% or higher for 30 year fixed mortgages verses 15 year mortgages.
2) The largest APR is 4.451% in the largest state on my list (California), so the size of the state and the percentage of APR must be directly related.

State	City	Loan Amount	Product	Lender	APR
Wisconsin	Milwaukee	$250,000	30 year fixed	North Shore Bank	4.151%
Arizona	Tuscon	$250,000	15 year fixed	Greenlight Financial Services	3.742%
California	Berkely	$250,000	30 year fixed	Quicken Loans	4.451%
Georgia	Atlanta	$250,000	30 year fixed	Anchor Home Mortgage	4.276%
Illinois	Aurora	$250,000	30 year fixed	Amerisave	4.443%
Iowa	Des Moines	$250,000	15 year fixed	Stonegate Mortgage	3.547%
Nebraska	Omaha	$250,000	15 year fixed	US Bank	3.964%

Enron Collapse

Enron was an American energy, services, and commodities business based in Houston Texas that flourished in the 1990s. During it's finest years, Enron was known as one of the most "innovative" companies in the country with revenues reaching $184 billion and 30,000 employees in 20 countries worldwide. Enron appeared to be flourishing and an extremely stable business to its investors-however, little did the world know that the company was in fact in a state of bankruptcy and doing everything it could to keep it a secret. Enron had used partnerships to hide their billions of dollars of debt but everything came crashing down in October of 2001 when Enron had no choice but to come clean. Even though it was the company itself that made the first offense, many blame Arthur Andersen, Enron's auditors, for overlooking obscene numbers in Enron's balance sheets. In fact, investigators say that this auditing error was "complicit in perpetrating one of the biggest frauds in corporate history." Due to this collapse, thousands of people lost their jobs and thousands of investors lost billions of dollars.

Sources:

http://www.personal-writer.com/sample/business-analysis/the-collapse-of-enron-managerial-aspect

http://www.nytimes.com/2002/01/16/business/enron-s-collapse-overview-arthur-andersen-fires-executive-for-enron-orders.html?pagewanted=all&src=pm

Debits and Credits

From reading this article I learned that a debit is an increase in the value of assets in an account and credits are a decrease in liabilities or owner's equity. The Latin word "debitum" meaning "what is due" became to be known in Engilsh as "debit." When assets are increased, something must be due for the increase (money)-therefore, this is a debit. The Latin word "creditum" meaning "something entrusted to another, or a loan" is known today as "credit." An increase in liabilities is a credit because it represents the amount of money someone else has entrusted in another. There are several interepretations for the abbreviations for debit "DR" and credit "CR" but it is not clear what exactly they stand for. Lastly in the article it is mentioned that debits and credits (invented by Luca Pacioli) have become the "basis of modern day accounting."

Disclaimer

I am a high school student conmpleting this blog as part of an assignment. Enjoy reading but understand I am still in the learning process and therefore the information below should not be relied upon.