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.
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).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio demonstrates relative stability over the observed periods, generally fluctuating between approximately 3.57 and 3.85. There is a slight downward trend around late 2020 and early 2021, reaching a low near 3.47. Subsequently, the ratio recovers and peaks at 3.85 in the third quarter of 2022 before slightly declining again towards mid-2023. This pattern suggests consistent efficiency by the company in generating revenue from its fixed assets, with minor short-term variations likely due to seasonal or operational factors.
- Total Asset Turnover
- The total asset turnover ratio exhibits a mild overall decline from about 1.00 in early 2019 to values ranging between 0.86 and 0.97 in the later periods. The ratio reaches its lowest point in the final quarter of 2021 (0.86), indicating a period of decreased effectiveness in utilizing total assets to generate sales. However, there is a modest recovery in subsequent quarters, albeit the turnover remains below the initial levels seen in 2019. This trend may reflect increased asset base, changes in sales volume, or shifts in operational efficiency.
- Equity Turnover
- The equity turnover ratio shows a pronounced declining trend over the course of the dataset. Starting from a high of 5.54 in the first quarter of 2019, the ratio steadily decreases, with some short-term fluctuations, to a value near 2.94 by mid-2023. The decline suggests a reduced capability of the company to generate sales from each unit of shareholder equity. This diminishing turnover could indicate either growth in equity outpacing sales declines or other changes in financial structure impacting the efficiency metric adversely.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Net sales | 2,490,280) | 2,987,614) | 2,652,338) | 2,728,153) | 2,372,582) | 2,666,221) | 2,326,128) | 2,359,839) | 1,989,422) | 2,295,948) | 2,185,244) | 2,219,829) | 1,707,329) | 2,037,317) | 2,068,125) | 2,134,422) | 1,767,217) | 2,016,488) | ||||||
| Property, plant and equipment, net | 3,014,876) | 2,822,238) | 2,769,702) | 2,622,587) | 2,590,826) | 2,592,628) | 2,586,187) | 2,370,193) | 2,341,825) | 2,298,817) | 2,285,255) | 2,183,376) | 2,165,346) | 2,150,217) | 2,153,139) | 2,099,985) | 2,107,185) | 2,108,075) | ||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||
| Net fixed asset turnover1 | 3.60 | 3.81 | 3.76 | 3.85 | 3.75 | 3.60 | 3.47 | 3.73 | 3.71 | 3.66 | 3.57 | 3.68 | 3.67 | 3.72 | 3.71 | 3.76 | 3.73 | 3.72 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||||||||||||||||||||
| Coca-Cola Co. | 4.55 | 4.42 | 4.37 | 4.58 | 4.37 | 4.10 | 3.90 | 3.76 | 3.45 | 3.13 | — | — | — | — | — | — | — | — | ||||||
| Mondelēz International Inc. | 3.67 | 3.60 | 3.49 | 3.53 | 3.41 | 3.24 | 3.32 | 3.27 | 3.14 | 3.09 | — | — | — | — | — | — | — | — | ||||||
| PepsiCo Inc. | 3.68 | 3.63 | 3.56 | 3.67 | 3.61 | 3.67 | 3.55 | 3.61 | 3.45 | 3.36 | — | — | — | — | — | — | — | — | ||||||
| Philip Morris International Inc. | 4.74 | 4.72 | 4.73 | 5.65 | 5.33 | 5.26 | 5.09 | 5.07 | 5.03 | 4.89 | — | — | — | — | — | — | — | — | ||||||
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).
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
= (2,490,280 + 2,987,614 + 2,652,338 + 2,728,153)
÷ 3,014,876 = 3.60
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several trends in net sales, property, plant and equipment (net), and net fixed asset turnover ratios over the observed periods.
- Net Sales
- Net sales exhibit a fluctuating but generally upward trend, with seasonal variations apparent across quarters. Initial figures start near 2.02 billion USD and experience declines and increases in succeeding quarters. Notably, sales show a significant increase from early 2022, reaching a peak close to 2.99 billion USD in April 2023, before a slight decline in July 2023. This upward trajectory suggests growth in the company’s revenue generation capabilities over time, despite some short-term fluctuations.
- Property, Plant and Equipment, Net
- The net value of property, plant and equipment shows a consistent increasing trend throughout the entire period. Starting from around 2.11 billion USD, it steadily rises each quarter, reaching over 3.01 billion USD by mid-2023. This steady increase indicates ongoing investments or capital expenditures in fixed assets, reflecting expansion or modernization efforts within the company’s operational infrastructure.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio remains relatively stable, with values oscillating between approximately 3.47 and 3.85. Early quarters demonstrate ratios in the range of 3.7 to 3.8, which tend to slightly decline during some periods, particularly toward the end of 2021, but recover again afterward. The ratio does not show extreme volatility, suggesting that the efficiency in using fixed assets to generate sales has been maintained with minor variations over time.
Overall, the company displays solid growth in sales revenues aligned with steady increases in fixed asset investments. The stable fixed asset turnover ratio indicates that the expanding asset base is being effectively utilized to support the incremental sales growth. The data suggests a positive alignment between capital investments and revenue generation with consistent operational efficiency in asset utilization.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Net sales | 2,490,280) | 2,987,614) | 2,652,338) | 2,728,153) | 2,372,582) | 2,666,221) | 2,326,128) | 2,359,839) | 1,989,422) | 2,295,948) | 2,185,244) | 2,219,829) | 1,707,329) | 2,037,317) | 2,068,125) | 2,134,422) | 1,767,217) | 2,016,488) | ||||||
| Total assets | 11,525,676) | 11,111,518) | 10,948,820) | 10,832,907) | 10,588,874) | 10,645,044) | 10,412,231) | 9,439,183) | 8,883,863) | 9,038,128) | 9,131,845) | 9,255,034) | 8,911,071) | 8,855,443) | 8,140,395) | 8,464,260) | 7,793,560) | 7,857,376) | ||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||
| Total asset turnover1 | 0.94 | 0.97 | 0.95 | 0.93 | 0.92 | 0.88 | 0.86 | 0.94 | 0.98 | 0.93 | 0.89 | 0.87 | 0.89 | 0.90 | 0.98 | 0.93 | 1.01 | 1.00 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | ||||||||||||||||||||||||
| Coca-Cola Co. | 0.45 | 0.45 | 0.46 | 0.46 | 0.44 | 0.43 | 0.41 | 0.42 | 0.40 | 0.37 | — | — | — | — | — | — | — | — | ||||||
| Mondelēz International Inc. | 0.47 | 0.45 | 0.44 | 0.45 | 0.45 | 0.43 | 0.43 | 0.42 | 0.42 | 0.41 | — | — | — | — | — | — | — | — | ||||||
| PepsiCo Inc. | 0.94 | 0.95 | 0.94 | 0.89 | 0.88 | 0.87 | 0.86 | 0.82 | 0.81 | 0.78 | — | — | — | — | — | — | — | — | ||||||
| Philip Morris International Inc. | 0.54 | 0.52 | 0.51 | 0.78 | 0.78 | 0.76 | 0.76 | 0.74 | 0.74 | 0.73 | — | — | — | — | — | — | — | — | ||||||
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).
1 Q2 2023 Calculation
Total asset turnover
= (Net salesQ2 2023
+ Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022)
÷ Total assets
= (2,490,280 + 2,987,614 + 2,652,338 + 2,728,153)
÷ 11,525,676 = 0.94
2 Click competitor name to see calculations.
- Net Sales
- The net sales figures demonstrate a pattern of variability across the reported periods. Initially, net sales fluctuated moderately, with values oscillating between approximately 1.7 billion and 2.1 billion US dollars in the 2019 fiscal year. Entering 2020, there was a decline in the second quarter, followed by a rebound in the third and fourth quarters, ending near 2.2 billion. In 2021, net sales generally increased, reaching values above 2.3 billion US dollars in several quarters. This upward trend continued into 2022, where net sales exceeded 2.6 billion US dollars, peaking near 2.7 billion in the third quarter. The trend toward higher sales persisted into the first half of 2023, with net sales peaking at just under 3 billion US dollars before experiencing a decline in the second quarter of 2023.
- Total Assets
- Total assets consistently increased over the entire period under consideration. Starting from roughly 7.86 billion US dollars in early 2019, total assets exhibited steady growth each quarter, reaching over 11.5 billion US dollars by mid-2023. There are no indications of asset contraction; rather, the growth reflects ongoing accumulation or appreciation of assets over time, with more pronounced increases observed particularly after the first quarter of 2021.
- Total Asset Turnover Ratio
- The total asset turnover ratio exhibited some fluctuations throughout the periods analyzed, generally remaining below or around 1.0. The ratio declined from near 1.0 in early 2019 to a low near 0.86 by late 2021. Thereafter, it showed a modest recovery, rising to just below 1.0 again by mid-2023. These movements suggest variations in how efficiently assets were utilized to generate sales. A lower ratio in late 2021 indicates comparatively less efficient asset use during that period, while the subsequent partial recovery signals some improvement in operational efficiency in terms of asset utilization.
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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Net sales | 2,490,280) | 2,987,614) | 2,652,338) | 2,728,153) | 2,372,582) | 2,666,221) | 2,326,128) | 2,359,839) | 1,989,422) | 2,295,948) | 2,185,244) | 2,219,829) | 1,707,329) | 2,037,317) | 2,068,125) | 2,134,422) | 1,767,217) | 2,016,488) | ||||||
| Total The Hershey Company stockholders’ equity | 3,694,785) | 3,458,365) | 3,299,544) | 3,083,080) | 2,891,740) | 2,915,549) | 2,757,229) | 2,528,294) | 2,265,049) | 2,255,994) | 2,234,352) | 2,065,854) | 1,753,605) | 1,671,231) | 1,739,222) | 1,753,162) | 1,675,120) | 1,414,737) | ||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||
| Equity turnover1 | 2.94 | 3.11 | 3.16 | 3.27 | 3.36 | 3.20 | 3.25 | 3.49 | 3.84 | 3.73 | 3.65 | 3.89 | 4.53 | 4.79 | 4.59 | 4.51 | 4.69 | 5.54 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Equity Turnover, Competitors2 | ||||||||||||||||||||||||
| Coca-Cola Co. | 1.70 | 1.72 | 1.78 | 1.86 | 1.80 | 1.62 | 1.68 | 1.70 | 1.64 | 1.64 | — | — | — | — | — | — | — | — | ||||||
| Mondelēz International Inc. | 1.19 | 1.17 | 1.17 | 1.14 | 1.09 | 1.04 | 1.02 | 1.02 | 1.01 | 1.00 | — | — | — | — | — | — | — | — | ||||||
| PepsiCo Inc. | 5.10 | 5.17 | 5.04 | 4.41 | 4.41 | 4.44 | 4.95 | 4.83 | 4.88 | 5.11 | — | — | — | — | — | — | — | — | ||||||
| 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).
1 Q2 2023 Calculation
Equity turnover
= (Net salesQ2 2023
+ Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022)
÷ Total The Hershey Company stockholders’ equity
= (2,490,280 + 2,987,614 + 2,652,338 + 2,728,153)
÷ 3,694,785 = 2.94
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends over the examined periods. Net sales exhibit a generally upward trajectory across the entire timeframe, although fluctuations are apparent within individual quarters. Initial quarters show net sales hovering between approximately 1.7 billion to 2.1 billion USD, while by the latest quarters, sales have increased to a range exceeding 2.4 billion USD, peaking near 3.0 billion USD. This growth suggests progressive revenue expansion with some variability likely influenced by seasonal or market factors.
Stockholders’ equity demonstrates a consistent and steady increase throughout the periods under review. Starting from around 1.4 billion USD, equity rises steadily to exceed 3.6 billion USD by the latest quarter. This sustained growth in equity indicates a strengthened financial position and accumulation of retained earnings, possibly supported by profitable operations and capital management strategies.
Conversely, the equity turnover ratio shows a declining trend over the time span. It starts relatively high at values above 5.5 in early periods but gradually decreases to below 3.0 in the most recent quarters. A declining equity turnover ratio could imply that the company is generating lower sales relative to its equity base over time, which might reflect changes in operational efficiency or a shift in asset utilization strategy.
- Net Sales
- Displays an overall upward trend with some quarterly variability, increasing from about 2 billion USD to around 2.5-3 billion USD, indicating revenue growth.
- Stockholders’ Equity
- Consistently rises from approximately 1.4 billion USD to over 3.6 billion USD, reflecting enhanced financial strength and capital accumulation.
- Equity Turnover Ratio
- Exhibits a gradual decline from above 5.5 to below 3.0, suggesting decreasing efficiency in converting equity into sales over the observed periods.