Required: Complete the purple cells for horizontal and vertical analysis for Tootsie Roll Industries using the following formulas:
Vertical Analysis: (Financial Statement item/base amount), where your base amount is Total Revenue for the income statement and Total Assets for the balance sheet.
Horizontal Analysis: (Current year-base year)/base year
Then, complete the purple cells in the financial ratios below. You will use the analyses on this tab of the workbook to create your final project.
Tootsie Roll Industries Inc.				Vertical Analysis	Vertical Analysis	Horizontal Analysis
Income Statement	Year 1	Year 2	Year 3	Year 1	Year 2	Year 3 to 1
Total Revenue	540,112	543,525	543,383
Product Cost of Goods Sold	340,090	340,933	350,960
Rental and Royalty Cost	889	947	937
Total Gross Margin	199,133	201,645	191,486
Selling, Marketing and Administrative Expenses	108,051	117,722	119,133
Earnings from Operations	91,082	83,923	72,353
Income Taxes	26,451	28,434	23,634
Net Earnings	66,089	63,298	60,849
				Vertical Analysis	Vertical Analysis	Horizontal Analysis
Balance Sheet	Year 1	Year 2	Year 3	Year 1	Year 2	Year 3 to 1
Cash and Cash Equivalents	126,145	100,108	88,283
Investments	42,155	39,450	33,572
Accounts Receivable Trade	51,010	43,253	40,721
Inventory (Add: FG and WIP + RM & supplies lines)	62,263	70,379	61,856
Total Current Assets	293,806	264,621	240,111
Net Property, Plant and Equipment	184,586	190,081	196,916
Goodwill	73,237	73,237	73,237
Trademarks	175,024	175,024	175,024
Total Assets	908,983	910,386	888,409
Accounts Payable	11,322	11,641	9,153
Accrued Liabilities	50,117	46,482	45,580
Total Current Liabilities	72,062	64,459	60,121
Total Noncurrent Liabilities	138,373	154,791	147,983
Total liabilities (Add total current liab + total noncurrent)	215,435	219,250	208,104
Common Stock	25,960	25,892	25,702
Class B Common Stock	16,348	15,894	15,455
Retained Earnings	52,349	64,927	73,109
Treasury Stock	1,992	1,992	1,992
Total Equity	698,548	691,136	680,305
Total liabilities and Shareholders Equity	908,983	910,386	888,409
Tootsie Roll Industries		TRI	TRI	Competition or Industry Ratio**	Ratio Benchmarks
	Formula	Year 1	Year 2	Year 1
Liquidity Ratios
Current Ratio	*Total Current Assets/Total Current Liabilities				Greater than 1.
Acid Test Ratio	*(Cash & Cash Equivalents +Iinvestments + Accounts Receivable Trade)/Total Current Liabilities				Ideally greater than 1, but likely will be less than 1.
Asset Management Ratio
Inventory Turnover	*Product Cost of Goods Sold/Average Inventory				Depends on industry, higher is better
	(remember, Avg Inv is beginning year inv + ending year inv, result divided by 2.)
Solvency Ratios
Debt ratio	*Total Liabilities/Total Assets				Less than 67%
Times Interest Earned Ratio	*Operating Income/Interest Expense				Higher the better, unless interest exp is 0.
Profitability Ratios
Gross Profit Percent	*Total Gross Margin/Total Revenue				Depends on industry, higher is better
Return on Net Sales	*Net Earnings/Total Sales				Depends on industry, higher is better
Earnings Per Share (EPS)	**Locate in research (on company income statement)				Depends on company. Would want to see stay stable or increase, not decrease.
Market Analysis
Price Earning Ratio	**Locate in research (on Internet)				Depends on company. Remaining steady is good.
Dividend Yield	**Locate in research (on Internet)				Depends on company. Remaining steady is good.
*Calculated by Author
**Located in research