Financial Statement Assignment

1Scott Sorensen Acc 200 Sec. 2 Financial Statement Review Assignment

The company we know today as “The Hershey Company” originally started as a small subsidiary of Milton Hershey's Lancaster Caramel Company. When they started, the company used chocolate-making equipment that they purchased at the 1893 Columbian Exposition in Chicago. With this equipment the company produced baking chocolate, cocoa and sweet chocolate coatings for the parent company's caramels. Today, The Hershey Company is still a manufacturer of both chocolate and non-chocolate products. They also are one of the leading snack food companies of the world and the largest North American manufacturer of many chocolate as well as non-chocolate desserts and snack foods. This company had small roots when it began its long, strenuous journey to “King of the chocolate world.” Today, the company is more than well known or recognized. Due to well-known brands such as Hershey's, Reese's, Hershey's Kisses, Kit Kat, Almond Joy, Mounds, Jolly Rancher, Twizzlers, Ice Breakers, and Mauna Loa, as well as innovative new products such as the delicious Take 5 candy bar and wholesome Hershey's Cookies, sales have come to provide plenty of jobs and a hefty net income. It also markets Hershey's cocoa, Hershey's syrup and other branded baking ingredients, toppings and beverages. In addition, Artisan Confections Company, a wholly owned subsidiary of The Hershey Company, markets such premium chocolate offerings as Scharffen Berger, known for its high-cacao dark chocolate products, and Joseph Schmidt, recognized for its fine, handcrafted chocolate gifts. The goal of any company is to be profitable and to provide quality products. The Hershey Company has proven to be and do just that. As of December 31st 2005, fourth quarter net sales registered at $1,346,117. While in 2006, at the same date net sales were down a little bit from the previous year, settling at $1,336,609. The company has been consistent in profitable earnings. Another important factor is the company’s assets. In 2005 that company had over $1,376,000 and in 2006 that jumped to over 1,417,000. With revenues of over $4 billion and more than 13,000 employees worldwide, the future of The Hershey Company looks chocolaty. In today’s world, not only a lot of Americans, but a large amount of people all over the world want to eat and be more healthily. The Hershey Company now offers a wise range of products specifically developed and crafted to address the nutritional interests of today's health-conscious consumer. These products include sugar-free Hershey's, Reese's and York candies, and PayDay Pro energy bar. 1. Who is responsible for the preparation of the financial statements? a. The company’s management 2. Who performed the company’s audit? a. KPMG LLP 3. Does the auditor’s report note any problems in the financial statements? If so, what? a. No 4. Have total assets, total liabilities, and total stockholders’ equity increased or decreased over the years reflected in the balance sheet, and by how much? a. Total Assets- increased by 482.5 million b. Total Liabilities- increased by 598.5 million

c. Total Stockholders’ equity- decreased by 116.0 million 5. Identify the company’s largest asset, liability, and stockholders’ equity account reflected on the balance sheet for the most recent year presented. a. largest asset- property, plant and equipment, net b. largest liability- long term debt c. largest stockholders’ equity- retained earnings 6. Identify the increase (decrease) in retained earnings over the most recent period and note, as best you can, the cause of the increase (decrease). a. Increase of RE by 272.0 million 7. By how much has net income increased (decreased) over the last year? a. Net income decreased by 846.57 million 8. Note the Company’s EPS (earnings per share). a. EPS- $2.07 9. By how much has cash increased (decreased) over the last year? a. The cash equivalents increased by 12.35 million. 10. What was the source of the largest cash inflow to the company over the last year? a. The net income (operating) 11. Skim the accompanying notes to the financial statements, and summarize briefly the kind of supplemental information provided in one of the notes. a. In the financial statement the balance sheet, income statement, cash flow statement and statement of changes in shareholder equity are found. These statements provide an overview of business profitability.