Financial Statement Analysis Project

Each student is to analyze the 2015 and 2014 financial statements of Tootsie Roll Industries, Inc. The 2013 financial statements can be found by going to either:

Go to www.sec.gov Filings tab at top Company Filings Search; next to company name type, Tootsie Tootsie Roll Industries Inc. (CIK# 0000098677) will appear select the first 10K interactive documents for the 2015 and 2014 comparative financial statements. (You may need 2013 data to figure certain financial ratios in part 4 below).The "View Excel Document" link is helpful for parts 2 and 3 below.

Go to www.tootsie.com click Company tab and then financials from the dropdown menu. Click dropdown arrow and select 2015 for year to display in order to access the 2015 annual report and 10K. (The 2014 Annual Report is also available by selecting 2014).

For Tootsie Roll Industries, Inc.:

Answer the questions on the following pages. The answers can be found in the Tootsie Roll 2015 Annual Report.

Perform vertical analysis on the income statements and balance sheet information for fiscal periods 2015 and 2014. (The Excel format of the income statement and balance sheet can be downloaded from the SEC website by selecting "View Excel Documents" in the interactive data area.)

Perform horizontal analysis on the income statements and balance sheet information to show the dollar and percentage change between fiscal periods 2015 and 2014. (The Excel format of the income statement and balance sheet can be downloaded from the SEC website by selecting "View Excel Documents" in the interactive data area.)

Compute a selection of financial ratios relevant for evaluating Tootsie Rolls LIQUIDITY, SOLVENCY, PROFITABILITY and MARKET INDICATORS for fiscal 2015 and 2014. Please select a total of at least 10 financial ratios. For some of the ratios you may need to access fiscal 2013 balance sheet numbers which can be found on the 2013 Annual Report. Show calculations.

Write a report (between 2 to 3 pages, double-spaced, 12 point, Times Roman font, with good grammar and spelling) summarizing your findings in parts 2, 3 and 4.

Submit to the Financial Statement Analysis Project drop-box, your solutions to all five parts. Please use a maximum of two files (one for the Excel work and one for the Word work.) Clearly label your submissions with your name.

Official Company Name_________________________________________________________

State of Incorporation__________________________________________________________

City and State of Headquarters____________________________ ______________________

Stock Exchange Securities & Where Listed________________________________________

Ticker Symbol(s)______ Primary SIC Code_____ Fiscal Year End ___________________

Independent Auditor (City)______________________________________________________

Description of Product or Service________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

Company Size (Fiscal 2015): Total Assets ______________ Total Revenue _____________

Who is the Chairperson of the Board of Directors ___________________________________

Who is the Chief Executive Officer?_______________________________________________

Who is the President & Chief Operating Officer?_____________________________________

Who is the Chief Financial Officer? ________________________________________________

Who is the Corporate Controller? _________________________________________________

List the major sections of information included in the annual report.

List the names of all of the financial statements presented by the company.

Inventory valuation method & cost flow assumptions________________________________ _____________________________________________________________________________

Depreciation method used ______________________________________________________

How many consecutive years were cash dividends paid?

According to the unaudited Quarterly Financial Data (Note 14):

Which quarter of the year had the highest sales and was most profitable in 2015? What percentage of 2015 total product sales occurs in this quarter? Why do you think this quarter has the highest sales?

From the Consolidated Statements of Earnings and Retained Earnings:

What were the THREE sources of income/revenues in 2015?

What were the stock dividends in 2015 and in 2014?

What decreased Retained Earnings by about $21.3 million in 2015?

From the Statements of Financial Position:

Does the 2015 Net property, plant and equipment of about $184.6 million intended to reflect the market value of these assets? If no, what does it reflect?

Why are 2015 prepaid expenses of $5.9 million included on the balance sheet (i.e., statement of financial position) rather than on the income statement?

What is the 12/31/15 accounts payable balance and why is it included as part of current liabilities rather than as part of noncurrent liabilities?

What is the 12/31/14 retained earnings?

Describe the difference between retained earnings and contributed capital (such as common stock)?

Dividends result in a decrease in which balance sheet account?

From the Statements of Cash Flows:

Indicated the cash provided or used in Tootsies Tootsie Rolls operating activities, investing activities, and financing activities?

Should the negative net cash flows from investing and from financing activities be viewed negatively? Explain.

What is the top item that accounts for the difference between net earnings and net cash provided by operating activities in 2015? Why is this item added to net earnings?

Information for Ratio Analysis:

Identify the amounts reported for each of the items below.

	2015	2014	2013
TOTAL REVENUES
PRODUCT SALES
PRODUCT COST OF GOODS
PRODUCT GROSS PROFIT
EARNINGS BEFORE INCOME TAXES
INTEREST EXPENSE (See Note 6)
NET INCOME
EARNINGS PER SHARE
QUICK ASSETS
CURRENT ASSETS
ACCOUNTS RECEIVABLE, NET
INVENTORY
PROPERTY, PLANT & EQUIPMENT, NET
TOTAL ASSETS
CURRENT LIABILITIES
LONG-TERM LIABILITIES
TOTAL LIABILITIES
TOTAL STOCKHOLDERS EQUITY