Tootsie Roll Exercises

TOOTSIE ROLL EXERCISE

Analysis of Stock Information

Use the annual report of Tootsie Roll Industries, Inc. in Appendix A of this text to answer these questions.

1. Study the income statements of Tootsie Roll. Do they include any nonrecurring items that might affect your use of the statements in predicting the future performance of the company?
2. Study the stock information included in Note 4 and respond to the following:
1. What is the primary difference between the two classes of common stock that the company has in its capital structure?
2. Has the company been active in issuing stock dividends and/or stock splits and, if so, what has been the impact of these distributions on the number of outstanding shares?
3. Looking at the balance sheets for 1998 and 1999:
1. What is the total amount of paid-in capital for each year?
2. For 1999, why is the amount of common stock only $22,815 thousand while the total stockholders' equity is much higher at $430,646 thousand?