Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Hershey Co., solvency ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Debt to Equity
- The debt to equity ratio displays a consistent downward trend from 3.19 in 2018 to 1.45 in 2022, indicating a steady reduction in financial leverage relative to shareholder equity. Including operating lease liabilities, the ratio similarly decreases from 3.19 to 1.55 over the same period, showing a slightly higher but converging trend.
- Debt to Capital
- This ratio decreases from 0.76 in 2018 to 0.59 in 2022, reflecting a declining proportion of debt within the company’s overall capital structure. The inclusion of operating lease liabilities yields a slightly higher ratio at each point in time but follows the same downward trajectory, moving from 0.76 to 0.61.
- Debt to Assets
- The debt to assets ratio reveals a reduction from 0.58 in 2018 to 0.44 in 2022, signifying a decreasing reliance on debt to finance the company's assets. When including operating lease liabilities, the ratio is consistently higher yet follows the same declining pattern, decreasing from 0.58 to 0.47.
- Financial Leverage
- Financial leverage diminishes notably, dropping from 5.51 in 2018 to 3.32 in 2022. This suggests a decreasing degree of total asset financing through debt relative to equity, indicating potentially reduced financial risk over time.
- Interest Coverage
- The interest coverage ratio remains relatively stable between 2018 and 2020, fluctuating slightly around 10, then rises considerably in 2021 to 14.84 and slightly decreases in 2022 to 14.68. This improvement marks enhanced ability to meet interest obligations from operating earnings.
- Fixed Charge Coverage
- Fixed charge coverage similarly shows a stable level near 8 in the initial years, then experiences a noticeable increase from 8.55 in 2020 to 11.31 in 2021, slightly retreating to 11.14 in 2022. This pattern indicates improved capacity to cover fixed financial obligations such as interest and lease payments.
- Summary
- Overall, the financial leverage measures indicate a consistent strategy of deleveraging over the five-year period, reducing debt proportions against equity, capital, and assets. Improvements in both interest and fixed charge coverage ratios correspond with this trend, reflecting enhanced earnings strength relative to debt service commitments. The inclusion of operating lease liabilities increases leverage ratios moderately but does not alter the downward trend, suggesting effective management of both traditional and lease-related liabilities.
Debt Ratios
Coverage Ratios
Debt to Equity
Hershey Co., debt to equity calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | 693,790) | 939,423) | 74,041) | 32,282) | 1,197,929) | |
| Current portion of long-term debt | 753,578) | 2,844) | 438,829) | 703,390) | 5,387) | |
| Long-term portion of long-term debt | 3,343,977) | 4,086,627) | 4,089,755) | 3,530,813) | 3,254,280) | |
| Total debt | 4,791,345) | 5,028,894) | 4,602,625) | 4,266,485) | 4,457,596) | |
| Total The Hershey Company stockholders’ equity | 3,299,544) | 2,757,229) | 2,234,352) | 1,739,222) | 1,398,721) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 1.45 | 1.82 | 2.06 | 2.45 | 3.19 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Coca-Cola Co. | 1.62 | 1.86 | 2.22 | — | — | |
| Mondelēz International Inc. | 0.85 | 0.69 | 0.73 | — | — | |
| PepsiCo Inc. | 2.28 | 2.51 | 3.28 | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
| Debt to Equity, Sector | ||||||
| Food, Beverage & Tobacco | 2.44 | 2.28 | 2.90 | — | — | |
| Debt to Equity, Industry | ||||||
| Consumer Staples | 1.08 | 1.07 | 1.24 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity = Total debt ÷ Total The Hershey Company stockholders’ equity
= 4,791,345 ÷ 3,299,544 = 1.45
2 Click competitor name to see calculations.
- Total Debt
- Over the five-year period from 2018 to 2022, the total debt experienced moderate fluctuations. Starting at approximately $4.46 billion in 2018, it decreased slightly to around $4.27 billion in 2019. In the subsequent years, total debt increased to a peak of about $5.03 billion in 2021 before declining again to approximately $4.79 billion in 2022. Overall, total debt remained within a narrow range without dramatic changes, indicating relatively stable debt levels with some short-term variability.
- Total Stockholders’ Equity
- The total stockholders’ equity showed a consistent and strong upward trend throughout the examined period. Beginning at roughly $1.40 billion in 2018, equity increased each year, reaching above $3.30 billion by the end of 2022. This steady growth suggests persistent strengthening in the company’s capital base, which may be attributed to retained earnings accumulation, stock issuance, or other forms of equity enhancement.
- Debt to Equity Ratio
- The debt to equity ratio displayed a continuous decline from 3.19 in 2018 to 1.45 in 2022, reflecting a notable improvement in the company’s financial structure. This decrease highlights a reduction in financial leverage, driven by a combination of relatively stable total debt and significant growth in equity. The declining ratio suggests reduced reliance on debt financing, which can be interpreted as a risk mitigation measure and increased financial stability over the period.
- Summary
- The analyzed data reveals a strategic strengthening of the company’s equity base accompanied by steady management of debt levels. The improvement in the debt to equity ratio signals enhanced solvency and potentially greater financial flexibility. These patterns indicate a focus on balancing growth with prudent capital structure management.
Debt to Equity (including Operating Lease Liability)
Hershey Co., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | 693,790) | 939,423) | 74,041) | 32,282) | 1,197,929) | |
| Current portion of long-term debt | 753,578) | 2,844) | 438,829) | 703,390) | 5,387) | |
| Long-term portion of long-term debt | 3,343,977) | 4,086,627) | 4,089,755) | 3,530,813) | 3,254,280) | |
| Total debt | 4,791,345) | 5,028,894) | 4,602,625) | 4,266,485) | 4,457,596) | |
| Current operating lease liabilities | 31,787) | 36,292) | 36,578) | 29,209) | —) | |
| Non-current operating lease liabilities | 294,849) | 310,899) | 181,871) | 184,163) | —) | |
| Total debt (including operating lease liability) | 5,117,981) | 5,376,085) | 4,821,074) | 4,479,857) | 4,457,596) | |
| Total The Hershey Company stockholders’ equity | 3,299,544) | 2,757,229) | 2,234,352) | 1,739,222) | 1,398,721) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 1.55 | 1.95 | 2.16 | 2.58 | 3.19 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Coca-Cola Co. | 1.68 | 1.92 | 2.30 | — | — | |
| Mondelēz International Inc. | 0.88 | 0.71 | 0.75 | — | — | |
| PepsiCo Inc. | 2.42 | 2.64 | 3.41 | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Food, Beverage & Tobacco | 2.53 | 2.36 | 3.00 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Consumer Staples | 1.20 | 1.19 | 1.39 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total The Hershey Company stockholders’ equity
= 5,117,981 ÷ 3,299,544 = 1.55
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt exhibited a general upward trend from 2018 to 2021, increasing from approximately 4.46 billion to 5.38 billion US dollars. However, in 2022, there was a decline in total debt to about 5.12 billion, indicating some reduction in the company's leverage liabilities during the most recent period.
- Total stockholders’ equity
- Stockholders’ equity consistently increased throughout the entire period under review. From roughly 1.40 billion in 2018, equity expanded steadily each year, reaching nearly 3.30 billion by the end of 2022. This growth reflects an accumulation of retained earnings and possible capital contributions, strengthening the company's financial foundation.
- Debt to equity ratio (including operating lease liability)
- The debt to equity ratio demonstrated a clear downward trend, moving from 3.19 in 2018 to 1.55 in 2022. This indicates an improving capital structure with decreasing reliance on debt relative to equity. The company's leverage reduced progressively, suggesting enhanced financial stability and potentially lowering risk associated with debt obligations.
Debt to Capital
Hershey Co., debt to capital calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | 693,790) | 939,423) | 74,041) | 32,282) | 1,197,929) | |
| Current portion of long-term debt | 753,578) | 2,844) | 438,829) | 703,390) | 5,387) | |
| Long-term portion of long-term debt | 3,343,977) | 4,086,627) | 4,089,755) | 3,530,813) | 3,254,280) | |
| Total debt | 4,791,345) | 5,028,894) | 4,602,625) | 4,266,485) | 4,457,596) | |
| Total The Hershey Company stockholders’ equity | 3,299,544) | 2,757,229) | 2,234,352) | 1,739,222) | 1,398,721) | |
| Total capital | 8,090,889) | 7,786,123) | 6,836,977) | 6,005,707) | 5,856,317) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.59 | 0.65 | 0.67 | 0.71 | 0.76 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Coca-Cola Co. | 0.62 | 0.65 | 0.69 | — | — | |
| Mondelēz International Inc. | 0.46 | 0.41 | 0.42 | — | — | |
| PepsiCo Inc. | 0.69 | 0.72 | 0.77 | — | — | |
| Philip Morris International Inc. | 1.26 | 1.57 | 1.66 | — | — | |
| Debt to Capital, Sector | ||||||
| Food, Beverage & Tobacco | 0.71 | 0.70 | 0.74 | — | — | |
| Debt to Capital, Industry | ||||||
| Consumer Staples | 0.52 | 0.52 | 0.55 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 4,791,345 ÷ 8,090,889 = 0.59
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited fluctuations over the five-year period. It initially decreased from approximately 4.46 billion to 4.27 billion US dollars between 2018 and 2019. Subsequently, it increased to around 4.60 billion in 2020 and further rose to nearly 5.03 billion in 2021, followed by a slight decrease to about 4.79 billion in 2022.
- Total Capital
- Total capital showed a consistent upward trend from 2018 to 2022. It increased from roughly 5.86 billion US dollars in 2018 to 8.09 billion in 2022, demonstrating steady capital growth each year without any declines.
- Debt to Capital Ratio
- The debt to capital ratio declined over the period under review, moving from 0.76 in 2018 to 0.59 in 2022. This indicates that the proportion of debt relative to total capital has decreased, reflecting a gradual improvement in the company’s capital structure with a reduced reliance on debt financing.
Debt to Capital (including Operating Lease Liability)
Hershey Co., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | 693,790) | 939,423) | 74,041) | 32,282) | 1,197,929) | |
| Current portion of long-term debt | 753,578) | 2,844) | 438,829) | 703,390) | 5,387) | |
| Long-term portion of long-term debt | 3,343,977) | 4,086,627) | 4,089,755) | 3,530,813) | 3,254,280) | |
| Total debt | 4,791,345) | 5,028,894) | 4,602,625) | 4,266,485) | 4,457,596) | |
| Current operating lease liabilities | 31,787) | 36,292) | 36,578) | 29,209) | —) | |
| Non-current operating lease liabilities | 294,849) | 310,899) | 181,871) | 184,163) | —) | |
| Total debt (including operating lease liability) | 5,117,981) | 5,376,085) | 4,821,074) | 4,479,857) | 4,457,596) | |
| Total The Hershey Company stockholders’ equity | 3,299,544) | 2,757,229) | 2,234,352) | 1,739,222) | 1,398,721) | |
| Total capital (including operating lease liability) | 8,417,525) | 8,133,314) | 7,055,426) | 6,219,079) | 5,856,317) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.61 | 0.66 | 0.68 | 0.72 | 0.76 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Coca-Cola Co. | 0.63 | 0.66 | 0.70 | — | — | |
| Mondelēz International Inc. | 0.47 | 0.42 | 0.43 | — | — | |
| PepsiCo Inc. | 0.71 | 0.73 | 0.77 | — | — | |
| Philip Morris International Inc. | 1.26 | 1.55 | 1.64 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Food, Beverage & Tobacco | 0.72 | 0.70 | 0.75 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Consumer Staples | 0.54 | 0.54 | 0.58 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 5,117,981 ÷ 8,417,525 = 0.61
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt exhibited a general upward trend from 2018 through 2021, increasing from approximately 4.46 billion to 5.38 billion US dollars. However, in 2022, there was a noticeable decline to around 5.12 billion, indicating a reduction in debt during the last reported year.
- Total capital (including operating lease liability)
- Total capital showed consistent growth over the entire five-year period. Starting at about 5.86 billion in 2018, it rose steadily each year, reaching approximately 8.42 billion US dollars by the end of 2022. This suggests an expansion of the company's capital base throughout the period under review.
- Debt to capital (including operating lease liability)
- The debt-to-capital ratio demonstrated a clear downward trend, decreasing from 0.76 in 2018 to 0.61 in 2022. This decline implies an improvement in the company's capital structure, with a diminishing proportion of debt relative to total capital. The ratio's steady decrease each year reflects ongoing deleveraging or equity growth outpacing increases in debt.
Debt to Assets
Hershey Co., debt to assets calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | 693,790) | 939,423) | 74,041) | 32,282) | 1,197,929) | |
| Current portion of long-term debt | 753,578) | 2,844) | 438,829) | 703,390) | 5,387) | |
| Long-term portion of long-term debt | 3,343,977) | 4,086,627) | 4,089,755) | 3,530,813) | 3,254,280) | |
| Total debt | 4,791,345) | 5,028,894) | 4,602,625) | 4,266,485) | 4,457,596) | |
| Total assets | 10,948,820) | 10,412,231) | 9,131,845) | 8,140,395) | 7,703,020) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.44 | 0.48 | 0.50 | 0.52 | 0.58 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Coca-Cola Co. | 0.42 | 0.45 | 0.49 | — | — | |
| Mondelēz International Inc. | 0.32 | 0.29 | 0.30 | — | — | |
| PepsiCo Inc. | 0.42 | 0.44 | 0.48 | — | — | |
| Philip Morris International Inc. | 0.70 | 0.67 | 0.70 | — | — | |
| Debt to Assets, Sector | ||||||
| Food, Beverage & Tobacco | 0.45 | 0.44 | 0.47 | — | — | |
| Debt to Assets, Industry | ||||||
| Consumer Staples | 0.30 | 0.30 | 0.33 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 4,791,345 ÷ 10,948,820 = 0.44
2 Click competitor name to see calculations.
- Total Debt
- The total debt shows a fluctuating but generally upward trend from 2018 to 2021, increasing from approximately 4.46 billion US dollars in 2018 to about 5.03 billion US dollars in 2021. However, in 2022, total debt declined to approximately 4.79 billion US dollars, indicating a reduction in debt levels after previous increases.
- Total Assets
- Total assets exhibit consistent growth over the entire period from 2018 to 2022. The asset base expanded from roughly 7.70 billion US dollars in 2018 to about 10.95 billion US dollars in 2022. This steady increase suggests ongoing asset accumulation or appreciation in value during the five-year span.
- Debt to Assets Ratio
- The debt to assets ratio demonstrates a continuous decreasing trend throughout the indicated years, moving from 0.58 in 2018 to 0.44 in 2022. This decline reflects an improving leverage position, as the proportion of debt relative to total assets has been reduced consistently, which can be interpreted as strengthening financial stability and lower relative indebtedness.
Debt to Assets (including Operating Lease Liability)
Hershey Co., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | 693,790) | 939,423) | 74,041) | 32,282) | 1,197,929) | |
| Current portion of long-term debt | 753,578) | 2,844) | 438,829) | 703,390) | 5,387) | |
| Long-term portion of long-term debt | 3,343,977) | 4,086,627) | 4,089,755) | 3,530,813) | 3,254,280) | |
| Total debt | 4,791,345) | 5,028,894) | 4,602,625) | 4,266,485) | 4,457,596) | |
| Current operating lease liabilities | 31,787) | 36,292) | 36,578) | 29,209) | —) | |
| Non-current operating lease liabilities | 294,849) | 310,899) | 181,871) | 184,163) | —) | |
| Total debt (including operating lease liability) | 5,117,981) | 5,376,085) | 4,821,074) | 4,479,857) | 4,457,596) | |
| Total assets | 10,948,820) | 10,412,231) | 9,131,845) | 8,140,395) | 7,703,020) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.47 | 0.52 | 0.53 | 0.55 | 0.58 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Coca-Cola Co. | 0.44 | 0.47 | 0.51 | — | — | |
| Mondelēz International Inc. | 0.33 | 0.30 | 0.31 | — | — | |
| PepsiCo Inc. | 0.45 | 0.46 | 0.49 | — | — | |
| Philip Morris International Inc. | 0.71 | 0.69 | 0.72 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Food, Beverage & Tobacco | 0.47 | 0.46 | 0.49 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Consumer Staples | 0.33 | 0.33 | 0.37 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 5,117,981 ÷ 10,948,820 = 0.47
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt exhibited a general increase from 4,457,596 thousand US dollars in 2018 to 5,376,085 thousand US dollars in 2021, marking a continuous upward trend over the first four years. However, in 2022, there was a notable decline in total debt to 5,117,981 thousand US dollars, indicating a partial reduction after several years of growth.
- Total Assets
- Total assets consistently increased each year, rising from 7,703,020 thousand US dollars in 2018 to 10,948,820 thousand US dollars in 2022. This steady expansion suggests ongoing asset accumulation and growth in the company's resource base over the five-year period.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt to assets ratio declined from 0.58 in 2018 to 0.47 in 2022, showing a decreasing leverage trend. This ratio improvement indicates that despite increases in total debt numerically, the company's asset base grew at a faster pace, effectively reducing financial leverage and potential risk exposure over time.
Financial Leverage
Hershey Co., financial leverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 10,948,820) | 10,412,231) | 9,131,845) | 8,140,395) | 7,703,020) | |
| Total The Hershey Company stockholders’ equity | 3,299,544) | 2,757,229) | 2,234,352) | 1,739,222) | 1,398,721) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 3.32 | 3.78 | 4.09 | 4.68 | 5.51 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Coca-Cola Co. | 3.85 | 4.10 | 4.52 | — | — | |
| Mondelēz International Inc. | 2.65 | 2.37 | 2.46 | — | — | |
| PepsiCo Inc. | 5.38 | 5.76 | 6.91 | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
| Financial Leverage, Sector | ||||||
| Food, Beverage & Tobacco | 5.37 | 5.16 | 6.13 | — | — | |
| Financial Leverage, Industry | ||||||
| Consumer Staples | 3.59 | 3.59 | 3.76 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Financial leverage = Total assets ÷ Total The Hershey Company stockholders’ equity
= 10,948,820 ÷ 3,299,544 = 3.32
2 Click competitor name to see calculations.
The financial data presents a clear progression in several key aspects over the five-year period ending December 31, 2022.
- Total Assets
- Total assets show consistent growth each year, increasing from approximately 7.7 billion US dollars in 2018 to nearly 11.0 billion US dollars in 2022. This upward trend suggests ongoing asset accumulation and possible expansion activities.
- Stockholders’ Equity
- The stockholders’ equity exhibits a robust increase, rising from roughly 1.4 billion US dollars in 2018 to about 3.3 billion US dollars by the end of 2022. This steady growth indicates strengthened financial stability and an enhanced shareholder value position.
- Financial Leverage
- Financial leverage, expressed as a ratio, indicates a declining trend from 5.51 in 2018 to 3.32 in 2022. This reduction implies a progressively lower reliance on debt financing relative to equity, improving the company's risk profile and possibly enhancing creditworthiness.
Overall, the data reflects a positive trajectory characterized by asset growth, increased equity, and reduced financial leverage, all of which suggest strengthening financial health and cautious management of capital structure over the period analyzed.
Interest Coverage
Hershey Co., interest coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to The Hershey Company | 1,644,817) | 1,477,512) | 1,278,708) | 1,149,692) | 1,177,562) | |
| Add: Net income attributable to noncontrolling interest | —) | 5,307) | (3,295) | (2,940) | (6,511) | |
| Add: Income tax expense | 272,254) | 314,405) | 219,584) | 234,032) | 239,010) | |
| Add: Interest expense | 140,095) | 129,846) | 153,471) | 152,122) | 146,858) | |
| Earnings before interest and tax (EBIT) | 2,057,166) | 1,927,070) | 1,648,468) | 1,532,906) | 1,556,919) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 14.68 | 14.84 | 10.74 | 10.08 | 10.60 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Coca-Cola Co. | 14.25 | 8.78 | 7.78 | — | — | |
| Mondelēz International Inc. | 9.39 | 16.08 | 12.33 | — | — | |
| PepsiCo Inc. | 10.57 | 5.94 | 8.24 | — | — | |
| Philip Morris International Inc. | 16.33 | 17.80 | 16.07 | — | — | |
| Interest Coverage, Sector | ||||||
| Food, Beverage & Tobacco | 12.81 | 9.56 | 10.01 | — | — | |
| Interest Coverage, Industry | ||||||
| Consumer Staples | 15.69 | 11.46 | 11.62 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= 2,057,166 ÷ 140,095 = 14.68
2 Click competitor name to see calculations.
- Earnings Before Interest and Tax (EBIT)
- The EBIT figures demonstrate a general upward trend over the five-year period. Starting at approximately 1.56 billion US dollars in 2018, EBIT showed a slight decrease in 2019 before increasing consistently each subsequent year, reaching about 2.06 billion US dollars by 2022. The most notable growth occurred between 2020 and 2021, suggesting improved operational performance during this interval.
- Interest Expense
- Interest expense remained relatively stable over the analyzed years, fluctuating slightly around the range of 129 million to 153 million US dollars. The lowest value was observed in 2021, with a minor rebound in 2022. This stability indicates controlled or modest changes in debt servicing costs.
- Interest Coverage Ratio
- The interest coverage ratio mirrors the EBIT trend but demonstrates enhanced financial strength concerning interest obligations. The ratio was around 10.6 in 2018, slightly declining to 10.08 in 2019, then improving to approximately 14.7 by 2022. The significant increase after 2019 reflects improved ability to meet interest expenses through operating earnings, peaking in 2021 before a slight decrease in 2022.
Fixed Charge Coverage
Hershey Co., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to The Hershey Company | 1,644,817) | 1,477,512) | 1,278,708) | 1,149,692) | 1,177,562) | |
| Add: Net income attributable to noncontrolling interest | —) | 5,307) | (3,295) | (2,940) | (6,511) | |
| Add: Income tax expense | 272,254) | 314,405) | 219,584) | 234,032) | 239,010) | |
| Add: Interest expense | 140,095) | 129,846) | 153,471) | 152,122) | 146,858) | |
| Earnings before interest and tax (EBIT) | 2,057,166) | 1,927,070) | 1,648,468) | 1,532,906) | 1,556,919) | |
| Add: Operating lease cost | 48,988) | 44,444) | 44,547) | 42,580) | 34,157) | |
| Earnings before fixed charges and tax | 2,106,154) | 1,971,514) | 1,693,015) | 1,575,486) | 1,591,076) | |
| Interest expense | 140,095) | 129,846) | 153,471) | 152,122) | 146,858) | |
| Operating lease cost | 48,988) | 44,444) | 44,547) | 42,580) | 34,157) | |
| Fixed charges | 189,083) | 174,290) | 198,018) | 194,702) | 181,015) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 11.14 | 11.31 | 8.55 | 8.09 | 8.79 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Coca-Cola Co. | 10.14 | 7.41 | 6.45 | — | — | |
| Mondelēz International Inc. | 6.60 | 10.28 | 8.27 | — | — | |
| PepsiCo Inc. | 7.28 | 4.85 | 6.06 | — | — | |
| Philip Morris International Inc. | 12.59 | 13.43 | 11.50 | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Food, Beverage & Tobacco | 9.14 | 7.60 | 7.54 | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Consumer Staples | 9.06 | 7.46 | 7.19 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,106,154 ÷ 189,083 = 11.14
2 Click competitor name to see calculations.
- Earnings Before Fixed Charges and Tax (EBIT)
- The earnings before fixed charges and tax exhibited a general upward trend over the five-year period. Starting at approximately 1.59 billion US dollars in 2018, the figure slightly declined in 2019 to about 1.58 billion but then showed consistent growth through 2020 to 2022. The 2022 value reached approximately 2.11 billion US dollars, indicating a significant overall increase in operating profitability prior to fixed charges and tax obligations.
- Fixed Charges
- Fixed charges experienced some fluctuations without a clear directional trend. The amount rose from 181 million US dollars in 2018 to nearly 195 million in 2019, followed by a modest increase to roughly 198 million in 2020. However, there was a decline in 2021 where fixed charges dropped to approximately 174 million, before a subsequent increase to about 189 million in 2022. This variability indicates some changes in interest expenses or other fixed financial commitments throughout the period.
- Fixed Charge Coverage Ratio
- The fixed charge coverage ratio, which measures the ability to cover fixed charges with earnings before fixed charges and tax, generally remained strong and relatively stable. It started at 8.79 in 2018, slightly declined to 8.09 in 2019, and then recovered to 8.55 in 2020. A notable improvement occurred in 2021, with the ratio increasing to 11.31, before slightly decreasing to 11.14 in 2022. The elevated ratio values in the last two years suggest a stronger buffer to meet fixed financial obligations, reflecting enhanced financial stability and operational earnings strength in relation to fixed charges.