1. Does Tootsie Roll Industries (TRI) use the indirect method or direct method for preparing its statement of cash flows? How can you tell?

2. How much cash was provided by (used in) the following activities in 2014 and 2013? Use parentheses to indicate use of cash. Operating activities 2014: 2013:

Investing activities 2014: 2013:

Financing activities 2014: 2013:

3. Does Tootsie Roll Industries adequately provide cash through its operating activities? What is the significance of this?

4. Review the Investing Activities for 2014. What was the single most source of cash for 2014? What was the single most use of cash for 2014?

5. Notice that there are both purchases and sales/maturities of available for sale investments. Why do you think these amounts are reported separately? Why is there not just a single amount for net changes in available for sale investments?

6. Review the Financing Activities for 2014. What was the single most source of cash for 2014? What was the single most use of cash for 2014?

7. What is the amount of cash you expect to see on the Balance Sheet for Dec. 31, 2014?

8. Review the cash flows for all three years presented for Tootsie Roll Industries. In two to three sentences, generally describe how TRI has obtained its cash and what it has used cash for. Think in terms of overall activities of operating, investing and financing. In general which of the three activity types provided cash and which ones used cash. (You may ignore the line item for the effect of exchange rates on cash.)

CONSOLIDATED STATEMENTS OF Earnings and Retained Earnings TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data) ded c2012 For the year ended December 31 2014 2013 Net product sales Rental and royalty revenue Total revenue Product cost of goods sold Rental and royalty cost Total costs Product gross margin Rental and royalty gross margin Total gross margin Seing, arketing and administrative expenses Earnings from operations Other income, net Earnings before income taxes Provision for income taxes Net earnings Less: Net loss attributable to noncontrolling interests Net earnings attributable to Tootsie Roll Industries, Inc. S 539,895 S539,627 $ 545,985 3,885 543,525 543,383 549,870 40,933 350,960 365,573 976 341,880 3897 366,549 198,962 188,667 180,412 2,909 201,645 191,486 183,321 117,722 119,133113,842 83,923 72,35369,479 3,630 3,756 947 937 2,683 2,819 28,434-84,483-742685 62,860 60,849 52,004 7,371 91,294 12,130 74,164 22,160 23,6342 438 S 63,298 S 60,849 52,004 Net earnings attributable to Tootsie Roll Industries, Inc. per share Average number of shares outstanding $ .05 S 0.99 S 0.84 61,399 62,248 60,562 Retained earnings at beginning of period Net earnings attributable to Tootsie Roll Industries, Inc. Cash dividends Stock dividends 73,109 80,210 S 114,269 63,298 60,849 52,004 (19,199)(18,922) (47,729) (52,281)-(49,028) (38,334) Retained earnings at end of period S 64,927 73,109 S80,210 (Th e accompanying notes are an integral part of these statements.)