Hershey Company Shares (Essay Sample)

Name: Institution: Date: Buying Hershey Company Shares Hershey Company is the vastest producer of chocolates in the northern parts of Northern America. It is takes the lead in chocolate production and also non-chocolate products worldwide. Hershey Company is based in the United States with several branches in different parts of the world. The branches are found in Japan, Korea, India, the great China republic and in other parts of the world. They have a general outlook as the most outstanding company in the production of chocolates and related products globally. The Hershey Company boasts of a wide range of products which include: refreshment products such as gum and mint, baking products and other chocolate confectionaries (Hershey Company). The company produces personalized products that cover a wide market from North America to other parts of the world. Premium chocolate products are produced by the company and used only in the United States (SEC 10-K). While the company boasts of its being the most outstanding chocolate company, in a business sense this is true. It is also more like the other consumer companies that work to products for direct consumption by the customers. This work will focus on Hershey’s financial report for the fiscal year 2015. It will also take a closer look into their financial status and explain why Hershey is the best company for you to invest in. The financial status of the company would us be directing in assessing the opportunities the company may provide to shareholders in the next years to make it even better. The referencing for this work will be based on the SEC 10-K report of the Hershey Company for the year 2015. This report provides comprehensive and synthesized information on the company’s business activities for the year 2015. The company has independent auditors who audited the company and produced the SEC 10-K report. Inventory Methods The company applies different methods of inventory management in their operations. They majorly employ the LIFO method in inventory control. The other inventories of the company are valued using the FIFO method (SEC 10-K). The inventory covers areas such as the materials, labor and overhead. The FIFO method was incorporated from the year 2007 and with time has led to increased productivity in the company. Accounts Receivable The primary concentrations for the credit risks of the Hershey Company are linked majorly with McLane Company and Wal-Mart Stores. The McLane Company accounted for 12.8% of the accounts receivable for the Company in the year 2015. 12.3% of these were for Wal-Mart Stores (SEC 10-K). There are no other companies that account for above 10% of the total. They believe that they have but very little accumulation of risks of credit. The accounts receiveable were presented in the balance sheets. Furthermore, the anticipated discounts for the year 2014 and 2015 are also presented therein. Generally, Hershey Company has a great base of branches that only two of them contribute greatly in the credit risks for the company. Uncollectible Accounts The uncollectible accounts separate from the accounts receivable for the company are taken into account. Just as any other company, Hershey Company also experiences the burden of uncollectible amounts in its operations (SEC 10-K). In the second quarter of the fiscal year 2015, the company carried out investigations on its accounts receivables. They recorded an additional adjustment of $25,898 which they considered uncollectible as of the acquisition date. The writes-off the accounts receivable are done on a regular basis. Future Revenue Potential Hershey Company has great revenue prospects in the looming fiscal years. An improvement in the company’s revenue base is expected to get on the rise with every fiscal year. The company modifies the costs and weights of their products whenever necessary to maintain them always on an upward progression (SEC 10-K). They realized that whenever they implemented price elevations, a time lag that was realized. The company is based on pro...