Financial and Managerial Accounting: The Basis for Business Decisions, 12/e

Jan R. Williams, University of Tennessee
Susan F. Haka, Michigan State University
Mark S. Bettner, Bucknell University
Robert F. Meigs

Liabilities

Tootsie Roll Exercises

TOOTSIE ROLL EXERCISE

EXERCISE 10.15

Examining Tootsie Roll Industries' Capital Structure

LO 4, 7

To answer the following questions use the annual report for Tootsie Roll Industries, Inc. in Appendix A at the end of the textbook:

Compute the company's current ratio for the most recent year reported. Do these ratios provide support that Tootsie Roll is able to repay its current liabilities as they come due? Explain.
Compute the company's debt ratio. Does Tootsie Roll appear to have excessive debt? Explain.
Examine the company's statement of cash flows. Does Tootsie Roll's cash flow from operating activities appear adequate to cover its current liabilities as they come due? Explain.

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