Hershey Co. (NYSE:HSY)

Asset Turnover

Both reported and adjusted total asset turnover ratios reveal a declining trend from 2018 through 2021, reaching their lowest points in 2021 at 0.86 and 0.85 respectively. In 2022, there is a noticeable recovery with the ratios rising to 0.95 and 0.94, indicating improved efficiency in asset utilization during the most recent year.

Current Ratio

The reported current ratio shows variability, increasing substantially from 0.93 in 2018 to a peak of 1.57 in 2020, followed by a sharp decline to 0.8 in 2022. The adjusted current ratio follows a similar pattern, rising from 1.01 in 2018 to 1.68 in 2020, then decreasing to 0.87 in 2022. This suggests that liquidity improved significantly in 2020 but weakened considerably afterward, indicating a potential reduction in short-term financial flexibility.

Debt to Equity

Both reported and adjusted debt to equity ratios exhibit a consistent downward trend over the five years. The reported ratio decreases from 3.19 in 2018 to 1.45 in 2022, while the adjusted ratio declines from 2.62 to 1.34 over the same period. This trend reflects a reduction in financial leverage and a strengthening equity position relative to debt.

Debt to Capital

There is a gradual reduction in both reported and adjusted debt to capital ratios, from 0.76 and 0.72 in 2018 to 0.59 and 0.57 in 2022 respectively. This indicates a systematic decrease in the proportion of debt financing within the total capital structure, enhancing financial stability.

Financial Leverage

Financial leverage ratios show a steady decline through the period analyzed. The reported leverage decreases from 5.51 in 2018 to 3.32 in 2022, while the adjusted leverage falls from 4.55 to 2.92. This reduction aligns with the decreasing debt levels, pointing to a less aggressive use of borrowed funds to finance assets.

Net Profit Margin

Reported net profit margin fluctuates modestly with a low of 14.4% in 2019 and a peak of 16.47% in 2021, slightly declining to 15.79% in 2022. The adjusted margin demonstrates a similar pattern but with higher values, reaching a peak of 17.73% in 2021 and then decreasing to 16.33% in 2022. Overall, profitability margins have remained relatively stable with minor improvements.

Return on Equity (ROE)

ROE exhibits a continuous downward trend, both reported and adjusted. The reported ROE drops significantly from 84.19% in 2018 to 49.85% in 2022, while the adjusted ROE declines from 63.96% to 44.72% over the same period. This weakening indicates lower returns generated on shareholders' equity despite the company's profitability.

Return on Assets (ROA)

Reported ROA remains relatively stable, fluctuating slightly around 14% to 15%, with a modest rise to 15.02% in 2022. The adjusted ROA shows a gradual increase, improving from 14.05% in 2018 to 15.3% in 2022. This suggests stable and slightly improving efficiency in generating profit from assets.

Net Sales

Net sales demonstrate a consistent upward trend over the five-year period, increasing from approximately 7.79 billion US dollars in 2018 to over 10.42 billion US dollars in 2022. This indicates steady revenue growth each year, with a particularly notable rise between 2021 and 2022.

Total Assets

Total assets also show a general increasing pattern, rising from about 7.70 billion US dollars in 2018 to nearly 10.95 billion US dollars in 2022. The growth in assets suggests ongoing investment or accumulation of resources, with a higher rate of increase observed between 2020 and 2021.

Reported Total Asset Turnover

The reported total asset turnover ratio trends downward from 1.01 in 2018 to a low of 0.86 in 2021, before recovering to 0.95 in 2022. This indicates that the company's efficiency in generating sales from its assets declined over the initial years but showed improvement in the final year of the period.

Adjusted Total Assets

Adjusted total assets follow a pattern similar to total assets, increasing from approximately 8.13 billion US dollars in 2018 to 11.13 billion US dollars in 2022. The adjustments yield slightly higher asset values than the reported figures, with growth consistent across all years.

Adjusted Total Asset Turnover

This ratio mirrors the reported asset turnover trend, remaining flat at 0.96 in 2018 and 2019, declining steadily to 0.85 in 2021, and then rising again to 0.94 in 2022. It suggests an initial stable asset utilization efficiency, a mid-period decline, and a partial recovery by the end of the analyzed timeframe.

Current Assets

The current assets exhibit volatility over the analyzed periods. Beginning at approximately 2.24 billion USD at the end of 2018, the figure slightly declined in 2019. A notable increase occurred in 2020, reaching nearly 2.98 billion USD, followed by a decrease in 2021 before rebounding in 2022 to about 2.62 billion USD. This pattern indicates fluctuations in asset liquidity or operational adjustments affecting short-term resources.

Current Liabilities

Current liabilities have fluctuated with a general upward tendency over the five-year span. Starting at approximately 2.42 billion USD in 2018, the liabilities decreased in 2019 and 2020 but rose sharply in 2021 and attained a peak of over 3.25 billion USD by the end of 2022. This trend suggests increasing short-term obligations, potentially impacting liquidity and financial flexibility.

Reported Current Ratio

The reported current ratio displays significant variability. From a low of 0.93 in 2018, it increased to 1.05 in 2019 and further improved to 1.57 in 2020, indicating stronger short-term liquidity during that period. However, it declined substantially to 0.90 in 2021 and further to 0.80 in 2022, signaling weakened capacity to cover current liabilities with current assets towards the later years.

Adjusted Current Assets

The adjusted current assets follow a comparable trend to the unadjusted figures but reflect higher values consistently. The amount rose from around 2.44 billion USD in 2018 to nearly 3.18 billion USD in 2020, then fell to approximately 2.44 billion USD in 2021, and increased again to about 2.84 billion USD in 2022. This adjustment presumably accounts for certain asset reclassifications or valuation changes, offering a refined view of asset availability.

Adjusted Current Ratio

The adjusted current ratio mirrors the trajectory of the reported current ratio but maintains more favorable levels. It improved from 1.01 in 2018 to 1.15 in 2019 and peaked at 1.68 in 2020, suggesting a relatively healthy liquidity position when adjustments are considered. However, it declined to 0.98 in 2021 and 0.87 in 2022, indicating a reduction in the cushion available to meet short-term liabilities, although remaining slightly above 0.8.

Total Debt

The total debt generally increased from 4,457,596 thousand USD in 2018 to a peak of 5,028,894 thousand USD in 2021, followed by a decline to 4,791,345 thousand USD in 2022. This indicates a trend of rising indebtedness over the initial years, with a slight reduction in the most recent period.

Total Stockholders’ Equity

Stockholders’ equity exhibited consistent growth throughout the period, rising from 1,398,721 thousand USD in 2018 to 3,299,544 thousand USD in 2022. This steady increase suggests strengthening shareholders’ capital and accumulation of retained earnings over the five-year span.

Reported Debt to Equity Ratio

The reported debt to equity ratio shows a clear downward trend, declining from 3.19 in 2018 to 1.45 in 2022. This decline reflects a shift towards lower leverage and an improved capital structure, as equity grows faster than debt.

Adjusted Total Debt

Adjusted total debt follows a similar pattern to reported total debt, increasing initially from 4,683,658 thousand USD in 2018 to a high of 5,376,085 thousand USD in 2021, then decreasing to 5,117,981 thousand USD in 2022. The adjustments do not significantly alter the overall trend of debt levels.

Adjusted Total Stockholders’ Equity

Adjusted equity also rose consistently, from 1,785,714 thousand USD in 2018 to 3,805,458 thousand USD in 2022. This steady expansion further supports the improvement in the company’s financial base when accounting for adjustments.

Adjusted Debt to Equity Ratio

This ratio decreased from 2.62 in 2018 to 1.34 in 2022, indicating an improvement in the debt-equity balance after adjustments. The reducing ratio underscores a trend towards stronger equity relative to debt, suggesting enhanced financial stability.

Total Debt

The total debt exhibited some fluctuations over the five-year period. It decreased slightly from 4,457,596 thousand USD in 2018 to 4,266,485 thousand USD in 2019, then increased to a peak of 5,028,894 thousand USD in 2021 before declining to 4,791,345 thousand USD in 2022. Overall, the total debt in 2022 was moderately higher than the 2018 figure.

Total Capital

Total capital demonstrated a consistent upward trend throughout the period. Starting at 5,856,317 thousand USD in 2018, it steadily increased each year, reaching 8,090,889 thousand USD by the end of 2022. This growth indicates an expansion in the company’s capital base over time.

Reported Debt to Capital Ratio

The reported debt to capital ratio showed a clear declining trend, moving from 0.76 in 2018 down to 0.59 in 2022. This decline suggests an improvement in the company's capital structure, with a reduced proportion of debt relative to total capital, potentially indicating lower financial risk.

Adjusted Total Debt

The adjusted total debt followed a trajectory similar to total debt but with slightly higher values. It decreased from 4,683,658 thousand USD in 2018 to 4,479,857 thousand USD in 2019, increased to 5,376,085 thousand USD in 2021, and then decreased to 5,117,981 thousand USD in 2022. This pattern suggests adjustments accounting for items not reflected in the raw total debt figures, but the general trend aligns with total debt.

Adjusted Total Capital

Adjusted total capital increased steadily from 6,469,372 thousand USD in 2018 to 8,923,439 thousand USD in 2022. This consistent growth in adjusted capital supports the observation of capital base expansion, considering a broader or different scope of capital components.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio declined from 0.72 in 2018 to 0.57 in 2022. This downward trend parallels the reported debt to capital ratio, corroborating the reduction in leverage when accounting for adjusted figures. The ratio's consistent decrease indicates an ongoing strategic reduction in debt relative to capital, potentially improving financial stability.

Total assets

The total assets demonstrate a consistent upward trend over the five-year period, increasing from 7.7 billion to approximately 10.95 billion US dollars. This steady growth reflects ongoing expansion and asset accumulation.

Total stockholders’ equity

Stockholders’ equity shows a significant rise from approximately 1.4 billion to nearly 3.3 billion US dollars between 2018 and 2022. This growth indicates strengthening of the company's net asset base and enhanced shareholder value.

Reported financial leverage

The reported financial leverage ratio has experienced a gradual decline from 5.51 in 2018 to 3.32 in 2022. This reduction suggests the company is lowering its debt relative to equity, improving its financial stability and reducing reliance on borrowed funds.

Adjusted total assets

The adjusted total assets also show a consistent increase, rising from approximately 8.13 billion to 11.13 billion US dollars over the period. This adjusted figure aligns closely with the reported total assets trend, confirming ongoing asset growth.

Adjusted total stockholders’ equity

The adjusted stockholders’ equity rises from about 1.79 billion to 3.81 billion US dollars, mirroring the pattern observed in reported equity but on a slightly higher scale. This demonstrates a robust enhancement in equity when adjustments are considered.

Adjusted financial leverage

Similar to reported leverage, adjusted financial leverage declines steadily, decreasing from 4.55 to 2.92. This consistent downward trend further emphasizes the company’s strategy to improve its capital structure by increasing equity relative to debt.

Net Income Attributable to The Hershey Company

The net income shows a generally increasing trend over the five-year period. Starting at approximately 1,177 million US dollars in 2018, it slightly decreased in 2019 to about 1,150 million US dollars. Subsequently, the net income increased steadily each year, reaching approximately 1,648 million US dollars by 2022, representing a significant growth overall.

Net Sales

Net sales have exhibited consistent growth throughout the period. Beginning at roughly 7,791 million US dollars in 2018, sales increased each year without exception, culminating at over 10,419 million US dollars in 2022. This indicates sustained revenue expansion and suggests successful market performance or increased demand.

Reported Net Profit Margin

The reported net profit margin showed some variability but remained within a relatively narrow range. The margin declined slightly from 15.11% in 2018 to 14.4% in 2019, then increased to a peak of 16.47% in 2021, before slightly declining again to 15.79% in 2022. Overall, profitability as a percentage of sales showed resilience with minor fluctuations.

Adjusted Net Income Including Noncontrolling Interest

Adjusted net income, which accounts for noncontrolling interests, followed a similar upward trajectory as net income. It increased steadily from about 1,142 million US dollars in 2018 to approximately 1,701 million US dollars in 2022. Notably, there was a strong rise between 2020 and 2021, indicating perhaps some adjustment items or operational improvements positively impacting adjusted income.

Adjusted Net Profit Margin

The adjusted net profit margin mirrored a positive trend with gradual improvement over time. It started at 14.66% in 2018, exhibited a slight decrease in 2019, then increased significantly to 17.73% in 2021, before settling at 16.33% in 2022. This suggests improved profitability when excluding certain items, with a peak in 2021 followed by a modest decline in the last year reported.

The analysis of the financial data reveals several notable trends over the five-year period ending December 31, 2022.

Net Income

The net income attributable to the company exhibits a consistent upward trajectory from 2018 through 2022. Beginning at approximately 1.18 billion US dollars in 2018, net income increased to about 1.64 billion US dollars by 2022. This represents a growth of nearly 40% over the five-year span, indicating improved profitability.

Total Stockholders’ Equity

Stockholders’ equity also shows a strong increasing trend, rising from roughly 1.40 billion US dollars in 2018 to nearly 3.30 billion US dollars in 2022. This significant increase suggests enhanced capital base and potentially accumulated retained earnings, which could support future growth initiatives or financial stability.

Reported Return on Equity (ROE)

Despite the growth in net income and equity, the reported ROE shows a declining pattern, decreasing from 84.19% in 2018 to 49.85% in 2022. This decline indicates that while absolute profits are increasing, the efficiency in generating returns from the equity base is diminishing, likely due to the faster growth in equity relative to net income.

Adjusted Net Income Including Noncontrolling Interest

Adjusted net income, which accounts for noncontrolling interests, follows a similar upward trend as net income, increasing from approximately 1.14 billion US dollars in 2018 to about 1.70 billion US dollars in 2022. This further supports the observation of improving profitability when considering all sources of earnings.

Adjusted Total Stockholders’ Equity

Adjusted stockholders’ equity increases steadily as well, from about 1.79 billion US dollars in 2018 to nearly 3.81 billion US dollars in 2022. The adjustment likely reflects additional equity considerations, and its growth mirrors the trend seen in total equity, further emphasizing capital expansion.

Adjusted Return on Equity (ROE)

The adjusted ROE corresponds closely with the reported ROE, showing a decline from 63.96% in 2018 to 44.72% in 2022. This suggests that even after accounting for noncontrolling interests and adjustments in equity, the company’s return efficiency on its equity base is reducing over time.

In summary, the company demonstrates solid growth in both net income and equity levels, but these gains are accompanied by a decreasing return on equity ratio. This pattern indicates that while profitability in absolute terms is rising, the effectiveness in utilizing shareholders’ equity to generate profits is lessening. Continued monitoring of ROE alongside income and equity growth will be important to assess whether the declining efficiency is a temporary phase or indicative of longer-term structural changes.

The financial data exhibits several notable trends over the five-year period from 2018 to 2022. Net income attributable to the company demonstrates a generally upward trajectory, rising from approximately 1.18 billion USD in 2018 to around 1.64 billion USD in 2022. This growth indicates increasing profitability. Similarly, adjusted net income, which includes noncontrolling interest, shows a consistent increase from roughly 1.14 billion USD in 2018 to over 1.70 billion USD in 2022, reinforcing the positive earnings trend.

Total assets exhibit a steady expansion, growing from about 7.7 billion USD in 2018 to nearly 11.0 billion USD in 2022. Adjusted total assets also follow this pattern, increasing from approximately 8.13 billion USD to over 11.12 billion USD across the same timeframe. This rise in asset base suggests ongoing investments and growth initiatives.

The reported return on assets (ROA) shows moderate variability. It declines slightly from 15.29% in 2018 to 14.00% in 2020 before recovering to 15.02% in 2022. Adjusted ROA is somewhat more stable, maintaining near 14.0% in the first three years and then increasing to 15.30% by 2022. This indicates improving efficiency in utilizing assets to generate income, particularly when adjustments are considered.

Profitability

Both net income and adjusted net income steadily increase over the period, reflecting enhanced earnings performance.

Asset Growth

Total and adjusted total assets consistently expand, signifying business growth and potentially increased operational scale.

Return on Assets

Reported ROA experienced a slight dip but generally remained stable, while adjusted ROA improved by the end of the period, indicating increased efficiency and profitability relative to assets.

Overall, the data suggests a positive financial performance trend with growth in earnings, asset base, and asset efficiency over the reviewed years.