It is important to properly classify and report current and

Question

It is important to properly classify and report current and long-term liabilities because they affect liquidity and risk for a company.

Refer to the most current financial statements of Tootsie Roll Industries, Inc. Research and answer the following:

1. What was the balance of total current liabilities for the three most recent years of your research? Did this balance trend upward or downward from one year to the next? What account or accounts experienced the largest change?
2. Is the amount of current liabilities more or less than the long-term liabilities? What does the result mean? Is the total stockholders' equity more or less than total liabilities? What does the result mean?
3. Calculate the debt ratio and current ratio for your company. Generally speaking what do these ratios tell you?
4. What was the total stockholders' equity for each of the two most current years?
5. What seems to be the main reason for the change in stockholders' equity?
6. What is the largest component of stockholders' equity?
7. Does the company have any preferred stock? How many classes of common stock does the company have?
8. How many shares of common stock are authorized, issued, and outstanding?
9. Refer to the Statement of Earnings. Did the company declare any dividends? Were they cash or stock dividends?
10. Has the company repurchased any of its own shares? What is the total effect on shareholders' equity of the repurchase?
11. What is the return on stockholders' equity?