Corporate Social Responsibility A case study of The body...

Explain with examples what is meant by Corporate Social Responsibility and discuss why it is important to modern business In today’s world, Corporate Social Responsibility (CSR) has been one of the topics that every company must be concerned with. It is usually viewed as a legal obligation for every company to create social benefits alongside with the profit gains (Peng and Meyer 2011, p.297). CSR is a crucial factor for our society and environment. If there is no campaign to encourage us to save our planet, how can people be aware and know theirs obligation to save the world. This paper will explain the meaning of corporate social responsibility, advantages and disadvantages of CSR through the example of The Body Shop. In addition,†¦show more content†¦One of the leading companies that adopted CSR as a pioneer of ethic is The Body Shop. The company has used CSR as a competitive strategy in order to succeed in business. The shop owner knows what she does best. So, products are developed based on a specific group of customers in order to create a strong brand preferences and unique way w ith a perception of enormous customer groups, called sustainability ideals. The source of The Body Shop success is to utilize the benefits of CSR by selling products based on natural ingredients, paying a fair price and no testing on animal. According to porter (1985), he claimed that sustainability of differentiation depends on two things: it is continued perceived value to buyers and the lack of competitor ability to imitate it (Porter 1985 cited in Mallin 2009, p.71). It requires a transparency of work process with stakeholders. From this example, it explains why CSR is important to modern businesses like The Body Shop (Mallin 2009, pp.59-78),(Kwapong 2005, p.89). Furthermore, there are several reasons why CSR is critical to modern business such as attracting and retaining employees, attracting socially responsible companies and reducing business costs. To start with attracting and retaining employees, it stimulates workers to increase commitments and productivities. Employees wo uld feel meaningful by working for ethical company. In the second place, it helps to attract sociallyShow MoreRelatedSocial Responsibility in Stakeholder Theory1509 Words   |  7 Pages 2. Social responsibility in stakeholder theory 3 2.1 Why social responsibility? 3 3. Limitations 4 4. Case study examples: Starbucks amp; Nike 4 5. Conclusion 5 6. References 6 7. Appendixes 9 Appendix A 9 Appendix B 10 1. Introduction This report focuses on social responsibility issue focusing on stakeholder theory. Social responsibility will be introduced and defined based on stakeholder theory. Next, analysis on the importance and limitations of social responsibility willRead MoreWhat is Social Responsibility?931 Words   |  4 Pages Social responsibility is an ethical ideology or theory by an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the ecosystem. A trade-off always exists between economic development, in the material sense, and the welfare of the society and environment. Social responsibility means sustaining the equilibrium between the two. It pertainsRead MoreNo Plastic Bag Day Research Proposal1689 Words   |  7 Pagesgreen product which bears eco-labels during their purchase. One of the more well known â€Å"green† consumer products is Body Shop who claims their products to be non-animal tested with recycling/refillable policies.   In order to be compatible in this business world, a lot of company has succumbed to   practice green concept due to customer pressure and government regulation. Thus in this case, government becomes a power stakeholder which enforces the company to practice green concept through no plasticRead MoreThe Body Shop, Corporate Social Responsibility Essay6824 Words   |  28 PagesMA Management Corporate Social Responsibility Assignment Corporate Social Responsibility Analysis of The Body Shop Date 29 January 2010 Word Count 5477 Grade 75% Table of Contents Preamble 1 Introduction 1 Corporate Social Responsibility 2 Opposition to Animal Testing 3 Support for Community Trade 6 Environmental Protection 9 Evaluation 11 Conclusion 13 References 16 Appendix 1 20 Preamble The objective of this piece of workRead MoreEssay on Business: Mission Statement1372 Words   |  6 PagesBody Shop Case Study In this case, how does The Body Shop address the four components of social responsibility? In the Body Shop, what tensions among these components were at work? Legal- the Body Shop avoided animal testing and used all natural ingredients to avoid any lawsuits. 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ManyRead MoreMcdonald s Corporate Social Responsibility And Sustainability886 Words   |  4 PagesMcDonald’s Corporate Social Responsibility and Sustainability: Raising the Standards Higher I. Introduction, background, situation, problem and method Corporate social responsibility (CSR) and sustainability are the emerging bottom lines in corporate governance today (Fontaine 2013). There is actually a triple bottom line: people, planet and profit (Fontaine 2013). It is no longer possible for corporations and businesses to ignore that as they pursue business objectives, they affect society andRead MoreCorporate Governance and Social Responsibility in Business Essay3613 Words   |  15 PagesEXECUTIVE SUMMARY 2.0 INTRODUCTION TO CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY As a result of modern corporate scandals and rapid development of international business environments, social responsibility (SR) has become a key aspect of corporate competitive contexts. (Brammer, Williams and Zinkin, 2007). Businesses are under increasing pressure to incorporate SR amongst their profit-driven aims and have become increasingly accountable for their social and environmental actions. Increased

The Difference Between Love And Lust - 1237 Words

What is the difference between love and lust? According to the dictionary, love is a feeling of strong and constant affection for a person. On the other hand, lust is a strong sexual desire for another (â€Å"Merriam-Webster†). The definitions of love and lust are complete opposites. Love is a constant feeling, while lust is impermanent. Yet, the two are always confused between people. This is because of the word â€Å"strong† in both of the definitions. When a person is deeply in love or is consumed by lust, the feelings are both strong. Therefore, it is sometimes challenging to differentiate. Banksy, a well-known street artist, realized the problem with love and lust, and decided to teach people a lesson by painting a piece of street art called â€Å"Waiting in Vain†¦at the Door of the Club.† Banksy is a very renowned street artist who keeps his identity unknown. His artwork is portrayed by â€Å"striking images, often combined with slogans, [which] engages political themes, satirically critiquing war, capitalism, hypocrisy and greed† (â€Å"Banksy Biography†). He first started his bold street art in Bristol, his hometown located in London, but quickly spread to the United States of America. In the U.S., Banksy targeted the most populated cities; this was due to the fact that it was easier for him to spread his messages. With a crowded location, his lessons will extent over an audience much quicker. One of the most popular places where Banksy’s art fills the streets is New York City, which wasShow MoreRelatedKesa and Morito1173 Words   |  5 PagesLove or Lust In Akutagawa’s â€Å"Kesa and Morito†, the text suggests notable differences between love and lust. In regards to the underlined symbols of love and lust, the characters identified within the short story may portray the differences between the symbols. Wataru’s character may symbolize the meaning of true love, and will identify the correlation to that of purity and innocence. However, the characteristics of Kesa and Morito may symbolize lust, and the evil and selfishness associatedRead MoreComparing Love in Shakespeares Midsummer Nights Dream and Soyinkas Lion and the Jewel978 Words   |  4 Pagesâ€Å"Love is a familiar. Love is a devil. There is no evil angel but Love. (Love’s Labours Lost.1.2.)† This Shakespearean quote relays on the fact that love can lead to many misfortunes, presented as one of the aspects of love in both William Shakespeare’s â€Å"A Midsummer Night’s Dream†, and Wole Soyinka’s â€Å"The Lion and the Jewel†. One aspect of love demonstrates its brilliant sides, and with it, brings affection, faith, and intimacy. However, it is also noted that an equal aspect of love conveys the consequencesRead MoreLove and Lust Essay678 Words   |  3 PagesLove and Lust Love and lust are two very strong words with very strong meanings. In this class we discussed whether or not the two are related. Love and lust are two words that go hand and hand in relationships. They are emotions that are interlocked with one another. Without one it is hard to have the other and it also seems that in order to be in and stay in love, one must desire or lust after their partner. Without that desire, love and the wanting to be with ones partner can fade away.Read More Love and Lust in Play-By-Play, Sex without Love, and Junior Year Abroad867 Words   |  4 PagesLove and Lust in Play-By-Play, Sex without Love, and Junior Year Abroad      Ã‚  Ã‚  Lust is an incredibly strong feeling that can prove to be almost uncontrollable, leading it to commonly be mistaken for love. Due to the relative closeness of these emotions, both are often confused, and even when one is in love he or she does not recognize it. Many think that love just comes knocking on ones door and one will know when it does, but they dont realize that for love to occur a relationship hasRead MoreThe Knights Tale And Lust Essay879 Words   |  4 PagesLust is defined as the desire or attraction to something, often in the form of sex. Chivalry and courtly love puts the woman at a higher position than the man, basing the relationship on loyalty rather than sex. On the spectrum of love, these two types are polar opposite ways in treating a woman. In medieval times, lust often fails, as chivalric love is rarer and heavily desired from a woman’s perspective. Rapper Kendrick Lamar exclaims, â€Å"we lust on the same routine of shame...lust tur n[s] into fearRead MoreRomantic Love Essay800 Words   |  4 PagesRomantic Love Inflicts Harm Love is an interesting concept. Wikipedia describes love as â€Å"a variety of different emotional and mental states, typically strongly experienced† (Dictionary.com). Romeo and Juliet, written by Shakespeare, portrays the illogical choices that may be made when in love. Another source explains how love is addicting in the poem â€Å"The Raven† written by Edgar Allen Poe. â€Å"The Gift of the Magi† depicts people who mistake love for lust. The force of romantic love inflicts harm onRead MoreHow do You know? Essay957 Words   |  4 Pagesthose three words, â€Å"I Love you†. Then it dawns on me, do they really love each other? Do they understand what they are saying? If it isn’t love what do they have? Many people question the difference between love and lust, and if they are able to have both. In my opinion, it is possible that love can turn into a passionate relationship and the sexual tension between two partners can eventually turn into love. However, there is no guarantee that one will generate the other. Lust means to have an intenseRead MoreLove and Lust in Loves Labours Lost1292 Words   |  6 Pagesâ€Å"Love is a familiar. Love is a devil. There is no evil angel but Love. (Love’s Labours Lost. 1.2.)† This Shakespearean quote relies on the fact that love can lead to many misfortunes, presented as one of the aspects of love in both William Shakespeare’s â€Å"A Midsummer Night’s Dream†, and Wole Soyinka’s â€Å"The Lion and the Jewel†. One aspect of love demonstrates its brilliant sides, and with it, brings affection, faith, and intimacy. However, it is also noted that an equal aspect of love conveys the consequencesRead MoreCritical Analysis Of Romeo And Juliet1197 Words   |  5 PagesA majority of people at some point in their lives has to make the laborious decision of â€Å"popping the question†, of course with the exception of careful preparation, measuring the reliability of the love and most importantly not being sp ontaneous about the ideal. In the novel â€Å"Romeo and Juliet† scripted by William Shakespeare the â€Å"pair of star-crossed lovers (Prologue, 5)† named Romeo and Juliet, do not follow through with this process, and these actions evidently lead to the worth of their livesRead MoreAnalysis Of A Midsummer Night s Dream 1020 Words   |  5 PagesDifferent Forms of Love in Relation to ‘A Midsummer Night’s Dream’ Love is a term used daily in one’s life. Many categorize love in many forms. These forms differ from one-another such as the difference between love for food and love for one’s spouse. However, in the play; â€Å"A Midsummer Night’s Dream†, love takes different forms than the ones experienced in reality. One can classify the different types of love used in this play into three different categories; true love, love produced by cupid’s

Living in Global Cities Free Essays

Living in a global city does not expose people to diverse cultures that enable them to develop well-rounded personalities and multicultural outlooks, but it is also vital into developing a â€Å"global† perspective within them. [WXwS1]  Upon entrance of the 1990s, the notion of `global city’ was first brought into play by Saskia Sassen. In her first book on this subject, The Global City (1991), she analyzed New York, London and Tokyo as examples of cities which in the two last decades advanced to the status of global cities. We will write a custom essay sample on Living in Global Cities or any similar topic only for you Order Now Later, she includes other cities in this category like Miami, Toronto and Sydney, as pointed out in her subsequent book, Cities in a World Economy (1994). Under certain circumstances, Sassen suggested that Hong Kong, Los Angeles, Zurich, Frankfurt, Mexico City and Sao Paulo may also be included in the category of global cities, because they fulfill the prerequisites for certain transnational economic transactions. For a better understanding of Sassen’s ideas, she defined global cities as â€Å"key sites for the advanced services and telecommunications facilities necessary for the implementation and management of global economic operations. They also tend to concentrate the headquarters of firms, especially firms that operate in more than one country† (1994, p.19). When the global cities sprouted, new inequalities among these cities became at focus. Nations and their importance within traditional commercial and economic webs lost their privileged positions. The importance of national states started to shrink and certain â€Å"global cities† became more important in the globalized landscape than whole nations. A new combination of spatial dispersal and global integration created new strategic roles for major cities like New York, London and Tokyo: Beyond their long history as centers of international trade and banking, these cities now function in four new ways: first, as highly concentrated command points in the organization of the world economy; second, as key locations for finance and for specialized service firms, which have replaced manufacturing as the leading economic sectors; third, as sites of production, including the production of innovations, in these leading industries; and fourth, as markets for the products and innovations produced (1991, p. 3-4). As Manuel Castells proclaimed, â€Å"Global cities are the new pillars of the informational era† (1996, p. 9). These cities provide the full infrastructure needed by the world economy for the realization of international transactions. This includes good airports, hotels, telecommunications, media, Internet, banking, security, stock exchange, and so on. The global cities have a significant number of qualified and efficient people able to supply and produce all necessary services. They are marketplaces able to absorb and recycle all financial flows and transactions. That is why it is important to remember that this hierarchy may change very fast under constantly changing economic conditions. These are the challenges of living in a global city where change is usually fast and people living it could develop that quick sense of adaptation to changes. [WXwS2] Moreover, global cities also enable people to have an increase in accessibility of areas for socialization.[WXwS3]   Business is booming and the areas outside of a city are affected by it. As the distance away from a community increases, its influence on the surrounding countryside decreases. Many residents will feel that they are able to have the best of both worlds, to be centrally placed yet able to get away to their second home. In global cities, people are provided with parks and lots of things to do. Although it is undeniable that living in global cities are expensive, but the price people pay will be diminished by the accessibility to virtually everything that modern people should have. The redistribution of population caused by suburbanization resulted to spatial and political segregation of social groups of the global cities. The upwardly mobile resident of the city— younger, wealthier, and better educated—took advantage of the automobile and the freeway to leave the central city. The poorer, older, least-advantaged urbanites were left behind. The central cities and the suburbs became increasingly differentiated. Large areas within those cities now contain only the poor and minority groups (including women), a population little able to pay the rising costs of the social services that their numbers, neighborhoods, and condition require. The corporate complex and the immigrant community today are probably two extreme modes in the formation and appropriation of urban space. The urban form represented by the global city function — the internationalized corporate services complex and the highly paid professional work force with its high-priced lifestyle — is the one habitually thought to constitute the essence of an advanced post-industrial economy. The urban form represented by the immigrant community, or more specifically, the informal economy, is habitually seen as not belonging to an advanced economy, one to be found here only because it has been imported via immigration (Sassen, 1993). This phenomenon has increasingly segregated the poor and minorities, being trapped in global cities, without the possibility of nearby employment and are isolated by distance, immobility, and unawareness from the few remaining low-skill jobs, which are now largely in the suburbs. Indeed, it is undeniable that there are huge problems when people choose to live in a global city like New York or San Francisco. However, people should also take part in the macro-structural changes in global economy. The transformation of the industrial into the informational society and the changing emphasis on information rather than material production have produced profound structural changes affecting the organization of societies, their labor force strategies, and the power structures of the state. As we are all aware that globalization is a vital concept in our time, living in a global city will eventually expose people to a global culture that is essential to widening knowledge in helping our nation achieve its economic goals. References Castells, M. (1996). The Rise of Network Society, Oxford: Blackwell. Sassen, S. (1991). The Global City. New York, London, Tokyo. Princeton, NJ: Princeton University Press. Sassen, S. (1993). Rebuilding the Global City: Economy, Ethnicity and Space. Social Justice, 20(3-4), 32+. Sassen, S. 1994. Cities in a World Economy. Thousand Oaks, CA, London and New Delhi: Sage. [WXwS1]MAJOR PREMISE [WXwS2]FALLACY OF RELEVANCE [WXwS3]MINOR PREMISE How to cite Living in Global Cities, Essay examples

Financial Analysis of The Hershey Company free essay sample

Liquidity ratios measure a company’s ability to meet its maturing short-term obligations. In other words, can a company quickly convert its assets to cash without a loss in value if necessary to meet its short-term obligations? Favorable liquidity ratios are critical to a company and its creditors within a business or industry that does not provide a steady and predictable cash flow. They are also a key predictor of a company’s ability to make timely payments to creditors and to continue to meet obligations to lenders when faced with an unforeseen event. Current Ratio Current Assets/Current Liabilities This ratio reflects the number of times short-term assets cover short-term liabilities and is a fairly accurate indication of a companys ability to service its current obligations. A higher number is preferred because it indicates a strong ability to service short-term obligations. The composition of current assets is a key factor in the evaluation of this ratio. Depending on the type of business or industry, current assets may include slow-moving inventories that could potentially affect analysis of a companys liquidity how long could it potentially take to convert raw materials and inventory into finished products? (For this reason, the quick ratio may be preferable to the current ratio because it eliminates inventory and prepaid expenses from this ratio for a more accurate gauge of a companys liquidity and ability to meet short-term obligations. ) The current ratio for Hershey Company is 1. 44 indicates the company’s ability to service short-term obligations is satisfactorily. However, the value of the quick ratio will provide a clearer indication of the company’s success in this area. Quick Ratio (Cash + Marketable Securities + Trade Accounts Receivable)/ Current Liabilities This ratio, also known as the acid test ratio, measures immediate liquidity the number of times cash, accounts receivable, and marketable securities cover short-term obligations. A higher number is preferred because it suggests a company has a strong ability to service short-term obligations. This ratio is a more reliable variation of the Current ratio because inventory, prepaid expenses, and other less liquid current assets are removed from the calculation. The quick ratio for Hershey Company is 0. 81 indicates the company’s ability to service short-term obligations is unfavorable. Accounts Receivable to Working Capital Trade Accounts Receivable / (Current Assets Current Liabilities) This ratio measures the dependency of working capital on the collection of receivables. A lower number for this ratio is preferred, indicating that a company has a satisfactory level of working capital and accounts receivable makes up an appropriate portion of current assets. The accounts receivable to working capital ratio for Hershey Company is 0. 72 indicates that the company’s performance is sufficient in this area. Inventory to Working Capital Inventory / (Current Assets Current Liabilities) This ratio measures the dependency of working capital on inventory. A lower number for this ratio is preferred indicating that a company has a satisfactory level of working capital and inventory makes up a reasonable portion of current assets. The inventory to working capital ratio for Hershey Company is 0. 99 indicates that this ratio is in line with company goals. Long Term Liabilities to Working Capital Long Term Liabilities / (Current Assets Current Liabilities) This ratio measures the degree to which a companys long-term debt has been used to replenish working capital versus fixed asset acquisition. The long-term liabilities to working capital ratio for Hershey Company is 3.  42 indicates the value of this ratio is meeting the company’s expectations. Sales to Working Capital Sales / (Current Assets Current Liabilities) This ratio measures a companys ability to finance current operations. Working capital (current assets current liabilities) is another measure of liquidity and the ability to cover short-term obligations. This ratio rel ates the ability of a company to generate sales using its working capital to determine how efficiently working capital is being used. In general, a lower number is preferred because it indicates a company has a satisfactory level of working capital. However, an exceptionally low number may indicate inadequate sales levels are being generated. The sales to working capital ratio for Hershey Company is 10. 34 reveals that the companys level of working capital is strong. The company may want to make an effort to generate additional sales using the available working capital. Activity ratios provide a useful gauge of a companys operations by determining, for example, the average number of days it takes to collect on customer accounts and the average number of days to pay vendors. A key point to keep in mind when evaluating these ratios is that seasonal fluctuations are not necessarily reflected in the numbers that are derived from these calculations based on an account balance on one single day. Accounts Receivable Turnover Sales / Trade Accounts Receivable This ratio measures the number of times receivables turn over in a year and reveals how successful a company is in collecting its outstanding receivables. A higher number is preferred because it indicates a shorter time between sales and cash collection. The accounts receivable turnover for Hershey Company is 14.  40 suggests this ratio may be on target with company objectives. Days Sales in Receivables Trade Accounts Receivable / (Sales / Days) This ratio measures the average number of days a companys receivables are outstanding. A lower number of days is desired. An increase in the number of days receivables are outstanding indicates an increased possibility of late payment by customers. Companies shou ld attempt to reduce the number of days sales in receivables in order to increase cash flow. The general rule used is that the collection period should not materially exceed the credit period. The days sales in receivables for Hershey Company is 25. 35 days that indicates the company is effective in collecting outstanding receivables if the credit terms is 30 days. Inventory Turnover Cost of Sales/Inventory Inventory turnover is a measure of the number of times a company sold its average level of inventory during the period. A high rate turnover indicates relative ease in selling inventory. However, a high value can mean that the business is not keeping enough inventories on hand, and thus may result to lost sales. The inventory turnover ratio of Hershey Company is 5. 98 indicates increased company profitability since the company can use the cash normally tied up in inventory for higher return investments. Days Cost of Sales in Inventory Inventory/(Cost of Sales/Days) Average age of inventories provides a rough measure of the length of time it takes to acquire, sell and replace inventory. Days cost of sales in inventory ratio of Hershey Company is 61. 08 indicates that the company is efficiently moving its inventory. Operating Cycle Days. (Inventory / (Cost of Sales / Days)) + (Trade Accounts Receivable / (Sales / Days)) This ratio calculates the total conversion period for a company, or in other words, the average number of days it takes to convert inventory into cash from sales. It is calculated by adding together the days cost of sales in inventory to the days sales in receivables. Evaluating this ratio can be helpful in gauging the effectiveness of marketing, determining credit terms to extend to customers, and collecting outstanding accounts. The operating cycle days for Hershey Company is 86. 42 days indicates the company  is successfully minimizing the amount of time it takes to convert products and services into cash. Sales to Assets Sales / Total Assets This ratio measures a companys ability to produce sales in relation to total assets to determine the effectiveness of the companys asset base in producing sales. A higher number is preferred, indicating that a company is using its assets to successfully gene rate sales. This ratio does not take into account the depreciation methods employed by each company and should not be the only measure of effectiveness of a company in this area. Sales to assets for Hershey Company is 1. 40 indicates the companys performance in this area is satisfactory. Sales to Net Fixed Assets Sales / (Property and Equipment Accumulated Depreciation) This ratio measures a companys ability to effectively utilize its fixed assets to generate sales. This ratio is similar to the sales to assets ratio, but it excludes current assets, long-term investments, intangible assets, and other non-current assets. A higher number is desired, indicating that a company productively uses its fixed assets to produce sales. This ratio does not take into account the depreciation methods employed by each company and should not be the only measure of effectiveness of a company in this area. In addition, fixed assets that are almost fully depreciated, and labor-intensive operations may interfere with the interpretation of this ratio. Sales to net fixed assets for Hershey Company is 3. 97 indicates the company is efficiently making use of its fixed assets to effectively generate sales. Net Fixed Assets to Equity (Property and Equipment Accumulated Depreciation) / Total Equity This ratio measures the extent to which investors capital was used to finance productive assets. A lower ratio indicates a proportionally smaller investment in fixed assets in relation to net worth, which is desired by creditors in case of liquidation. Note that this ratio could appear deceptively low if a significant number of a companys fixed assets are leased. Net fixed assets to equity for Hershey Company is 1. 60 indicates the companys performance is adequate in this area. Profitability ratios measure  a company’s ability to use its capital or assets to generate profits. Improving profitability is a constant challenge for all companies and their management. Evaluating profitability ratios is a key component in determining the success of a company. It is important to note that all profitability ratio calculations are based on earnings before taxes. Percent Gross Profit ((Sales Cost of Sales) / Sales) * 10 0 This ratio measures the gross profit earned on sales and reports how much of each sales dollar is available to cover operating expenses and contribute to profits. The percent gross profit for Hershey Company is 43. 04% is a good indication of financial health for the company. Percent Profit Margin on Sales Earnings before Taxes / Sales * 100 This ratio measures how much profit a company makes on each sales dollar received and how well a company could potentially deal with higher costs or lower sales in the future. The percent profit margin on sales for Hershey Company is 15. 29% indicates sales is contributing enough to the companys bottom line. Percent Rate of Return on Assets Earnings before Taxes / Total Assets * 100 This ratio measures how effectively a companys assets are being used to generate profits. It is one of the most important ratios when evaluating the success of a business. A higher number reflects a well managed company with a healthy return on assets. Heavily depreciated assets, a large number of intangible assets, or any unusual income or expenses can easily distort this calculation. The percent rate of return on assets for Hershey is 21. 36% indicates that the company remains competitive and continues operating successfully. Percent Rate of Return on Equity Earnings before Taxes / Total Equity * 100 This ratio expresses the rate of return on equity capital employed and measures the ability of a companys management to realize an adequate return on the capital invested by the owners in a company. A higher number is preferred for this commonly analyzed ratio. The percent rate of return on equity for Hershey Company is 99. 87% indicates management is effectively managing the profits earned based on the owners investment in the company. Coverage ratios assess a company’s ability to meet its long-term obligations, remain solvent, and avoid bankruptcy. It measures how well a company’s cash flow covers its short-term financial obligations. Lenders evaluate coverage ratios to determine the degree to which a company could become vulnerable when faced with economic downturns. A company with a high level of debt poses a higher risk to long-term creditors and investors. Debt to Total Assets Total Liabilities / Total Assets This ratio measures what proportion of debt a company is carrying relative to its assets. A ratio value greater than one indicates a company has more debt than assets. Naturally, companies and creditors prefer a lower number. The debt to total assets ratio for Hershey Company is 0. 78 indicates the company is able to withstand losses without harming creditor interests or could obtain additional financing if desired. Percent Owners Equity Total Equity / Total Assets * 100 This ratio measures what proportion of total assets was provided by the owners equity. The higher the number the more total capital has been contributed by owners and the less by creditors. The percent owners equity ratio for Hershey Company is 22. 05% indicates the company owns an adequate portion of its asset. Equity Multiplier Total Assets / Total Equity This ratio measures the extent to which a company uses debt to finance its assets. The higher the number is, the more a company is relying on debt to finance its assets. The equity multiplier for Hershey Company is 4. 54 indicates a reasonable portion of the companys assets are owned versus financed. Debt to Equity Total Liabilities / Total Equity This ratio measures the financial leverage of a company by indicating what proportion of debt and equity a company is using to finance its assets. A lower number suggests there is both a lower risk involved for creditors and strong, long-term, financial security for a company. The debt to equity ratio for Hershey Company is 3. 54 indicates a solid performance in this area for the company. Times Interest Earned Earnings before Interest and Taxes / Interest Expense This ratio measures a companys ability to meet interest payments. A higher number is preferred, suggesting a company can easily meet interest obligations and can potentially take on additional debt. Note that this particular ratio uses earnings before interest and taxes because this is the income amount available to cover interest. The times interest earned ratio for Hershey Company is 11. 63 indicates the companys interest coverage is sufficient.