Tootsie Roll Industries RatiosThe Hershey Company RatiosInterpretation and comparison between the two companies ratios Receivable Turnover Ratio14.6 times9.8 timesTootsie Roll has a higher Receivable Turnover Ratio which means that they have more cash on hand and are collecting on debts. Average Collection Period2537.24Tootsie Roll is turning Accounts Recievable into cash 12 days faster than Hershey. Assets Turnover Ratio0.571.18Tootsie Roll's Asset Turnover Ration is lower than Hershey which could mean that Tootsie Roll has purchased more assets and keeping them as opposed to loosing or selling the assets. Return on Assets Ratio15.7%5.1%Hershey has a lower return on asset ratio which could mean that they have lower return on asset and they require huge investments in assets. Tootsie Roll may require smaller investments in assets. Debt to Total Assets Ratio29.8%71.3%Hershey's Debt to Total Asset Ratio is getting close to 1 or 100% meaning that their assets could mainly be financed with debt and Tootsie Roll's assets are mainly financed with equity. Times Interest Earned Ratio104.813.6Hershey Company's days in inventory is higher than Tootsie Roll so Hershey Company must not be selling inventory as fast as Tootsie Roll.
From this analysis, I believe that Tootsie Roll would be a better company to invest in because they seem to be more profitable than Hershey. Tootsie Roll has a lower cost on earnings per share, a higher current ratio, higher gross profit rate and profit margin ratio and they are consistent with the distribution and sell of product. Overall, Tootsie Roll is more financially stable than Hershey.