P4.

23
2012
Sales

6,644,252.00

Interest expense

95,569.00

Net income

628,962.00

Diluted EPS

2.89

Minority interest in net income

12,950.00

Total assets

4,754,839.00

Total shareholders equity

1,048,373.00

Non controlling interest in subsidiaries

11,625.00

ROA = (Net Income + (1 - Tax rate) x Interest expense + NCI Income) / Average total asset
Decomposition = Profit margin x Total assets turnover
Profit margin = (Net income + (1-tax rate) x Interest expense + NCI Net income) / Sales
Asset turnover = Sales / Average total asset
2012
ROA

0.15

Profit Margin

0.11

Asset turnover

1.40

Decomposition

0.15

ROCE = (Net income - NCI income - Preferred stock dividends) / Average common shareholde
ROCE

0.59

Hershey has steadily increased its position in the market. All aspects of their financials (Net in
year to year.
P4.24
Profit Margin for ROA
Assets Turnover

7.23%
0.9363

Rate of ROA

6.77%

Profit Margin for ROCE

6.54%

Capital Structure Leverage

2.10

Rate of Return on Common Shareholders' Equity

12.87%

Cost of goods sold / sales

41.76%

Advertising expense / sales

12.91%

Research and dev / sales

5.24%

Royalty expense / sales

7.44%

Other selling and admin expense / sales

Income tax expense / sales

22.92%
2.51%

A/R Turnover

5.06

Inventory Turnover

6.88

Fixed asset turnover

14.73

Ratios from year 3 to year 4 are very similar. COGS and advertising expenses grew compared
also paying less and less royalties as they are going in-house for a lot of their products.

Hasbro is borrowing significantly less money. It's increasing its return to the shareholders. Thi
P4.29

Binker's profitability has gone down over the 3 years. It could be because, as the text reads, B
restaurants. The selling and admin cost has gone up compared to revenues. Although, as reve
operating income is going down per restaurant.

On the flip side, McDonald's profitability has steadily gone up in the past 3 years. Selling and
company is becoming less and less leveraged. It's collecting payments faster (a/r turnover), a
more of it's equipment as shown by the incrased in fixed assets per restaurant.

McDonald's and Binker are taking a different approach, but mainly McDonald's is buying back
funding, not in operating as Binker's is doing, but using it to decrease debts.
C4.1
Profit Margin for ROA
Assets Turnover

22.83%
1.3525

Rate of ROA

30.88%

Profit Margin for ROCE

22.63%

Capital Structure Leverage

2.10

Rate of Return on Common Shareholders' Equity

50.22%

Cost of sales/revenues

55.18%

store operating exp / op rev

37.19%

other op exp / op rev

4.08%

dep and amortize / op rev

5.22%

gen and admin exp / op rev

7.60%

restructuring charge / op rev

0.00%

income from equity inv / op rev

0.0200284765

interest rev / op rev

0.0089226388

income tax expense / op rev

-0.0031324158

a/r turnover

24.14

inv turnover

5.27

fixed asset turnover

4.20

The fluctuations in Starbucks comes from the change in leadership and its strategy. The comp
closed a large number of company owned stored and transitioned to licensed stores. In 2009,
growth in the number of stores. In decreasing performance, Howard Schultz reassumed the po
was when Broders Bookstores went bankrupt causing nearly 500 Starbucks locations to close

2011

2010

6,080,788.00

5,671,009.00

92,183.00

96,434.00

509,799.00

435,994.00

2.74

2.21

5,817.00

8,183.00

4,407,094.00

4,272,732.00

880,943.00

937,601.00

23,626.00

35,285.00

me) / Average total asset

CI Net income) / Sales

2011

2010

2010 - 2012

0.13

0.12

0.39891413

0.09

0.09

0.2913276487

1.38

1.33

4.1078915626

0.13

0.12

1.20

0.46

1.62

erage common shareholder's equity

0.57

cts of their financials (Net income, EPS, ROA, ROCE) have increased from

g expenses grew compared to sales. Research picked up again. Hasbro is

lot of their products.

rn to the shareholders. This increases the ROCE to shareholders.

ecause, as the text reads, Binker is expanding and opening more

revenues. Although, as revenues are increasing per restaurant, the net

e past 3 years. Selling and amin fees have been decreasing and the
ents faster (a/r turnover), and increasing revenues AND income. It's owning
r restaurant.

McDonald's is buying back shares and becoming less leveraged, using it's
ase debts.

and its strategy. The company has gone through a major restructing that
to licensed stores. In 2009, the company, for the first time, had a negative
d Schultz reassumed the position as CEO of the company. Another key hit
tarbucks locations to close down.