Analyzing The Balance Sheet For Tootsie Roll

Fierce competition in the confectionery industry means Tootsie Roll must innovate in order to maintain strong sales. The company does so by reinvesting in its operating assets and creating new products. In 2013, Tootsie Rolls spent $16 million upgrading plant equipment and added Cry Baby Chews, Naughty or Nice Pops, and Andes Creme de Menthe Trees to its product line. Special promotions aimed at the company’s high volume customers also boosted sales.

This means that for every dollar of liabilities, Tootsie Roll Company has $3.50 or $3.10 in current assets. In both instances, the current ratio is more than 1, so the company will have very little trouble with liquidity should the need arise.

Tootsie Rolls are one of the top candy sellers in the United States. Tootsie Rolls were first made in 1896 by Leo Hirshfield. He was an immigrant that came from Austria, and his dream was to make candy recipes. He made them in his own small candy shop in New York City. Tootsie Rolls were named after Hirshfields daughter "Tootsie", her real name was Clara Hirshfield.

Tootsie Roll Industries, Inc. has been engaged in the manufacture and sale of confectionery products for 113 years. Our products are primarily sold under the familiar brand names: Tootsie Roll, Tootsie Roll Pops, Caramel Apple Pops, Child’s Play, Charms, Blow Pop, Blue Razz, Cella’s chocolate covered cherries, Tootsie Dots, Tootsie Crows, Junior Mints, Junior Caramels, Charleston Chew, Sugar Daddy, Sugar Babies, Andes, Fluffy Stuff cotton candy, Dubble Bubble, Razzles, Cry Baby, Nik-L-Nip and EI Bubble.

Model trains for sale to toy stores are produced by Whistle Stop Incorporated, a small manufacturing company. Whistle Stop also has a small service department that repairs customers’ model trains for a fee. The company has been in business for five years. At the end of the most recent fiscal year, November 30, 2011, the accounting records reflected total assets of $500,000 and total liabilities of $200,000. During the current fiscal year ending November 30, 2012, the following summarized events occurred:

Tootsie Roll Industries is a confectionery manufacturer headquartered in Chicago, Illinois. It operates seven production facilities – four in the United States, and a single one in Canada, Mexico, and Spain respectively. Its distribution channels span across 75 countries and approximately 92% of the sales are based in the United States.2 Be,yond of the namesake, Tootsie Roll Industries holds over 20 brands of candy. These confections include chocolates, lollipops, cotton candy, gum, and caramel. The non-chocolate products account for about 70% of the total company revenue. The major buyers of these products are confectionary wholesalers and grocery

When looking at profitability from 2006 to 2007, the ratios show that performance suffered. Profit margin, return on assets, and earnings per share have all dropped. However, net cash provided by operations exceeds 2006 amounts and almost matches that of 2005. Taking all of these ratios into account, Tootsie Roll’s financial standing is strong but could be improved by taking on a loan and investing wisely.

I have reviewed the past two years liabilities and stockholders’ equity sections of Tootsie Roll Industries, Inc. and compared the balance sheets using Debt to Equity Ratio and Times Interest Earned. The calculations presented in thousands:

Tootsie Roll faces a number of key issues concerning its strategy. One of such strategic issues relates to how it can maintain its marketplace success and sustain its competitive advantages, in light of (i) the company’s growth prospects in U.S. and foreign markets, (ii) intensity of the competition, and (iii) the fact that the two key leaders of the company are not getting any younger.

“Tootsie Roll’s good fortunes are an accumulation of many small decisions that were probably made right plus bigger key decisions, such as acquisitions, that have been made right, and a lot of luck.” Mel Gordon, CEO – Tootsie Roll, 1993

The current assets are those which are readily convertible into cash and cash equivalents due to their highly liquid nature and also form part of working capital of the company’s operations. However, the long term assets in contrast are not liquid because since they have a useful life of more than a year and hence their full value cannot be easily realized within

10. Fixed asset turnover = Total Revenues in Statement of Operations / Net Property and

Tootsie Roll Industries is a public traded company; traded on the NYSE. It is noted as the symbol of TR. In the first quarter of 2014, the share price was $28.29 with a range of low price $27.75 and high price of $34.22 for 2013. This shows an approximate range of $6.47. For fiscal year ended December 31, 2013, dividend per share increased from $0.15 to $0.32 with 36.76 (in millions) shares unsettled. (Kesling 2013)

The balance sheet of Krispy Kreme looks very similar to the income statement. The majority of line items have experienced great growth. On the asset side of the balance sheet Krispy Kreme has eliminated their long-term investments and its tangible assets have increased from $0 to $176M. The increase of intangible assets was due to their aggressive accounting treatment for franchise acquisitions.

Tootsie Roll Industries Inc. uses financial ratios as an effective planning management to remain sustainable and competitive. The three sections of ratios are liquidity, solvency, and profitability. Liquidity ratios measure Tootsie Rolls capability to pay off its short-term debt by using assets that it could sell if needed. Solvency ratios measure the businesses ability to stay in the black and are in good standing with creditors. Profitability ratios measure performance and the company 's ability to make a profit. All three ratio