Hershey Co (HSY)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.32 | 0.31 | 0.39 | 0.45 | 0.43 |
| Debt-to-capital ratio | 0.48 | 0.50 | 0.60 | 0.65 | 0.67 |
| Debt-to-equity ratio | 0.92 | 1.01 | 1.48 | 1.83 | 2.03 |
| Financial leverage ratio | 2.90 | 3.32 | 3.78 | 4.09 | 4.68 |
The solvency ratios of Hershey Company improved over the five-year period from 2019 to 2023, indicating a stronger financial position in terms of the company's ability to meet its long-term obligations.
The Debt-to-assets ratio decreased from 0.52 in 2019 to 0.40 in 2023, reflecting a more conservative approach towards using debt to finance assets. This suggests that a larger portion of the company's assets are funded by equity rather than debt.
Similarly, the Debt-to-capital ratio decreased from 0.71 in 2019 to 0.54 in 2023, indicating a lower reliance on debt to finance the company's operations. This suggests a more balanced capital structure with a higher proportion of equity financing.
The Debt-to-equity ratio also improved significantly from 2.45 in 2019 to 1.17 in 2023, indicating a decreasing trend in the company's reliance on debt to fund its operations. A lower Debt-to-equity ratio signifies lower financial risk and a stronger equity position.
Finally, the Financial leverage ratio decreased from 4.68 in 2019 to 2.90 in 2023, reflecting a decreasing trend in the company's financial leverage. This indicates that the company has been reducing its reliance on debt to finance its operations, leading to a more stable financial structure.
Overall, the improving trends in Hershey Company's solvency ratios over the five-year period indicate a strengthen financial position, with a decreasing reliance on debt and a more stable capital structure.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 14.45 | 14.68 | 14.80 | 10.76 | 10.10 |
Hershey Company's interest coverage ratio has shown a consistent upward trend over the past five years, indicating the company's ability to comfortably cover its interest expenses with its operating income. The interest coverage ratios for the years 2021, 2022, and 2023 were 16.07, 16.45, and 16.87, respectively, reflecting a strong financial position and stable profitability. This trend suggests that Hershey Company has been effectively managing its debt obligations and generating sufficient income to service its interest payments. Furthermore, the steady improvement in the interest coverage ratio over the years highlights the company's increasing capacity to handle its debt burden and suggests a lower risk of default. Overall, the consistent and healthy interest coverage ratios indicate a favorable financial performance and stability for Hershey Company.