Analyzing The Balance Sheet For Tootsie Roll

Decent Essays
Classifying Assets

Let’s look at the balance sheet for Tootsie Roll in more detail. First, the assets on a balance sheet are listed by how easy it is for the asset to be converted into cash. The easiest asset to convert to cash is listed first and the hardest to convert is listed last. The ease which an asset can be converted to cash is called liquidity.
Current Assets

Current assets are assets that can be easily converted to cash or will be used within one year. Tootsie Roll 's balance sheet lists cash first. Tootsie Roll lists investments, next. Investments may also be listed on a balance sheet as marketable securities. Investments are short-term investments such as stocks, bonds, or other investments that can be turned into cash
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Finished goods inventory is the finished Tootsie Roll ® candies’ inventory value after they have been created, wrapped, packaged, and are ready to be sold. The total value of inventory at Tootsie Roll on December 31, 2015 was $62.263 million.

Prepaid expenses are goods and services that have been paid for but not yet used. Some examples could be internet service, insurance premium, and rent on office space. These are all items that can be paid in advance but are used during the year. In the case of Tootsie Roll, prepaid expenses were $5.935 million December 31, 2015.

Tootsie Roll’s total current assets December 31, 2015 were $293.806 million.
Fixed Assets

Fixed assets are assets that will be held or used over a period longer than one year. Companies typically have land, equipment, and buildings as their fixed assets. The account is usually called property, plant, and equipment or PP&E.

The value of fixed assets typically decreases over time. The amount of the decrease each year is accounted for and is called depreciation. Depreciation for the year is expensed on the income statement and added to the accumulated depreciation account on the balance sheet. So the value of the fixed assets on the balance sheet is reduced by the accumulated depreciation.

Tootsie Roll’s total PP&E at the end of 2015 was $499.535 million and their accumulated depreciation was $314.949 million, so the net PP&E was $184.586 million.
Intangible Assets

Intangible assets are assets that don’t
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