Analysis of Long-term (Investment) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Geographic Areas
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Return on Equity (ROE) since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
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Long-term Activity Ratios (Summary)
Hershey Co., long-term (investment) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-07-02), 10-Q (reporting date: 2023-04-02), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-02), 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01).
- Net Fixed Asset Turnover
-
The net fixed asset turnover ratio shows a relatively stable trend with minor fluctuations over the analyzed periods starting from late 2018. Initially, the ratio hovered around 3.66 to 3.76, indicating consistent efficiency in utilizing fixed assets to generate revenue. There was a slight decline towards the end of 2021, dropping to approximately 3.47, before recovering gradually in subsequent quarters to reach values near 3.81 by mid-2023. Overall, despite some short-term variability, the ratio suggests a generally steady utilization of fixed assets over time.
- Total Asset Turnover
-
The total asset turnover ratio exhibited some volatility throughout the periods under review. Starting at around 1.01 in late 2018, the ratio experienced a downward trend, reaching lows near 0.87 toward late 2020. Subsequently, there was a modest recovery phase with values returning to a range between 0.90 and 0.98 until mid-2021. However, from late 2021 onwards, the ratio experienced another downward adjustment, stabilizing near 0.94 by mid-2023. This pattern reflects mild fluctuations in asset efficiency, with periods of both decreased and improved revenue generation relative to total assets.
- Equity Turnover
-
The equity turnover ratio displayed a clear and sustained declining trend over the entire timeline. Initially, values were notably high, close to 5.57 in early 2019, reflecting strong revenue generation relative to equity. However, the ratio steadily decreased each quarter, with some minor short-term recoveries, reaching approximately 2.94 by mid-2023. This continuous decline suggests a gradual reduction in the efficiency with which equity is being used to generate revenues, potentially indicating changes in capital structure or growth strategies impacting equity utilization.
Net Fixed Asset Turnover
Hershey Co., net fixed asset turnover calculation (quarterly data)
| Jul 2, 2023 | Apr 2, 2023 | Dec 31, 2022 | Oct 2, 2022 | Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | Dec 31, 2020 | Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||
| Property, plant and equipment, net | |||||||||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||||||
| Net fixed asset turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Coca-Cola Co. | |||||||||||||||||||||||||||||
| Mondelēz International Inc. | |||||||||||||||||||||||||||||
| PepsiCo Inc. | |||||||||||||||||||||||||||||
| Philip Morris International Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-07-02), 10-Q (reporting date: 2023-04-02), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-02), 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01).
1 Q2 2023 Calculation
Net fixed asset turnover
= (Net salesQ2 2023
+ Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022)
÷ Property, plant and equipment, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales exhibit a pattern of moderate fluctuations over the observed quarters with periodic increases and decreases. Initially, net sales decreased from approximately 1,971,959 thousand US dollars in April 2018 to 1,751,615 thousand US dollars in July 2018 before rising again to 2,079,593 thousand US dollars by September 2018. Throughout 2019 and 2020, the sales values oscillated, experiencing drops mainly around mid-year quarters (June/July) followed by recoveries in the subsequent quarters. From 2021 onward, there is a consistent upward trend with net sales reaching new highs above the 2.6 million mark by 2023, despite some quarterly variability. This indicates overall growth in revenue with some seasonality or periodic dips in certain quarters.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment remains relatively stable in the initial periods from 2018 through mid-2019, mostly fluctuating slightly around the 2.1 to 2.15 million thousand US dollars range. Starting in late 2019 and through 2020, there is a steady upward movement, with values consistently increasing quarter over quarter. This growth accelerates notably from 2021 onwards, reaching over 3 million thousand US dollars by mid-2023. This trend suggests ongoing investment and expansion in physical assets, reflecting either acquisition of new facilities, equipment upgrades, or revaluation increases.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio, calculated from late 2018 onward, generally remains within a narrow range, mostly fluctuating between approximately 3.5 and 3.8. The ratio peaks sporadically, with notable high points around 2022 and 2023, where values approach or slightly exceed 3.8, indicating improved efficiency in generating sales revenue from fixed assets during these periods. However, slight dips below 3.6 occur occasionally, signaling some variability in asset utilization. Overall, the ratio's stability coupled with moderate increases toward the later periods suggests consistent effectiveness in the use of fixed assets to generate sales, with marginal improvements over the years.
- Summary of Observations
- The data demonstrates an overall expanding asset base alongside growing net sales revenues over the five-year span. Despite some quarter-to-quarter volatility in sales, the long-term trend is positive. The increase in property, plant, and equipment signals capital investment growth, which aligns with the sustained increase in sales figures. The net fixed asset turnover ratio's relative stability implies that the company is maintaining or slightly improving operational efficiency despite increased asset levels. These observations suggest a strategic emphasis on both capacity expansion and effective asset utilization, supporting sustained business growth.
Total Asset Turnover
Hershey Co., total asset turnover calculation (quarterly data)
| Jul 2, 2023 | Apr 2, 2023 | Dec 31, 2022 | Oct 2, 2022 | Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | Dec 31, 2020 | Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||||||
| Total asset turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Coca-Cola Co. | |||||||||||||||||||||||||||||
| Mondelēz International Inc. | |||||||||||||||||||||||||||||
| PepsiCo Inc. | |||||||||||||||||||||||||||||
| Philip Morris International Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-07-02), 10-Q (reporting date: 2023-04-02), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-02), 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01).
1 Q2 2023 Calculation
Total asset turnover
= (Net salesQ2 2023
+ Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022)
÷ Total assets
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
- The net sales values exhibit a generally increasing trend over the observed quarters despite short-term fluctuations. Initially, sales increased from approximately 1,972,000 thousand USD in April 2018 to peaks above 2,359,000 thousand USD by the end of 2021. There is a noticeable dip in mid-2021 but followed by strong recovery and growth, reaching a high of nearly 2,988,000 thousand USD by April 2023. The data suggest resilience and gradual expansion in revenue generation over the five-year period.
- Total Assets
- Total assets demonstrate a steady upward trend from about 7,333,000 thousand USD in April 2018 to over 11,525,000 thousand USD by July 2023. The growth is consistent with minor periodic fluctuations, indicating that asset base expansion accompanies sales growth. This upward movement suggests ongoing investments or asset acquisitions, reflecting strengthening of the company’s balance sheet over time.
- Total Asset Turnover
- The total asset turnover ratio shows a moderate decline from a little over 1.0 in late 2018 to a low of 0.86 in early 2022. Following this trough, the ratio improves gradually, approaching around 0.94 by mid-2023. This pattern indicates that the efficiency in utilizing assets to generate sales weakened initially but has been recovering. Despite asset growth, the firm experienced temporary decreases in operational efficiency, though recent periods show a positive trend toward better asset utilization.
- Summary
- Overall, the company’s financial performance reflects consistent sales growth and increasing asset accumulation over the period analyzed. The initial decrease in asset turnover ratio suggests some challenges in converting asset investments into revenue efficiently during certain periods, particularly around 2021 to early 2022. However, improvements in this metric in later periods indicate a positive adjustment in operational efficiency. The combination of expanding asset base and recovering turnover ratios implies strategic focus on optimizing resource usage to sustain growth going forward.
Equity Turnover
Hershey Co., equity turnover calculation (quarterly data)
| Jul 2, 2023 | Apr 2, 2023 | Dec 31, 2022 | Oct 2, 2022 | Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | Dec 31, 2020 | Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||
| Total The Hershey Company stockholders’ equity | |||||||||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||||||
| Equity turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Equity Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Coca-Cola Co. | |||||||||||||||||||||||||||||
| Mondelēz International Inc. | |||||||||||||||||||||||||||||
| PepsiCo Inc. | |||||||||||||||||||||||||||||
| Philip Morris International Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-07-02), 10-Q (reporting date: 2023-04-02), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-02), 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01).
1 Q2 2023 Calculation
Equity turnover
= (Net salesQ2 2023
+ Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022)
÷ Total The Hershey Company stockholders’ equity
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales exhibit a cyclical pattern with generally higher values in the third quarter of each year, peaking multiple times across the observed periods. A noticeable decline occurs in the second quarter of most years, reflecting a seasonal trend. Overall, net sales show an upward trajectory from early 2018 through mid-2023, with significant growth especially evident from 2021 onwards, where values consistently reach above two billion US dollars. This indicates an expansion in revenue-generating activity.
- Total Stockholders' Equity
- Total equity steadily increases throughout the observed period, nearly quadrupling from early 2018 to mid-2023. The growth is smooth and continuous, with no periods of decline. This steady rise suggests consistent reinvestment of earnings and/or capital inflows, strengthening the company's financial base and potentially enhancing its capacity for growth and risk absorption.
- Equity Turnover Ratio
- The equity turnover ratio exhibits a declining trend over the period for which data is available, starting from a high of approximately 5.57 and gradually decreasing to around 2.94 by mid-2023. This decline suggests the company is generating less revenue per unit of equity over time, which may be due to the rapidly growing equity base outpacing sales increases or changes in operational efficiency. It may warrant further investigation to assess the causes and implications of this decreasing efficiency metric.