Broadening Your Perspective 8-1 The financial statements of Tootsie Roll are presented below.

The financial statements of Tootsie Roll are presented below.

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data)
			For the year ended December 31,
			2011			2010			2009
	Net product sales		$528,369			$517,149			$495,592
	Rental and royalty revenue		4,136			4,299			3,739
	Total revenue		532,505			521,448			499,331
	Product cost of goods sold		365,225			349,334			319,775
	Rental and royalty cost		1,038			1,088			852
	Total costs		366,263			350,422			320,627
	Product gross margin		163,144			167,815			175,817
	Rental and royalty gross margin		3,098			3,211			2,887
	Total gross margin		166,242			171,026			178,704
	Selling, marketing and administrative expenses		108,276			106,316			103,755
	Impairment charges		—			—			14,000
	Earnings from operations		57,966			64,710			60,949
	Other income (expense), net		2,946			8,358			2,100
	Earnings before income taxes		60,912			73,068			63,049
	Provision for income taxes		16,974			20,005			9,892
	Net earnings		$43,938			$53,063			$53,157
	Net earnings		$43,938			$53,063			$53,157
	Other comprehensive earnings (loss)		(8,740	)		1,183			2,845
	Comprehensive earnings		$35,198			$54,246			$56,002
	Retained earnings at beginning of year.		$135,866			$147,687			$144,949
	Net earnings		43,938			53,063			53,157
	Cash dividends		(18,360	)		(18,078	)		(17,790	)
	Stock dividends		(47,175	)		(46,806	)		(32,629	)
	Retained earnings at end of year		$114,269			$135,866			$147,687
	Earnings per share		$0.76			$0.90			$0.89
	Average Common and Class B Common shares outstanding		57,892			58,685			59,425
(The accompanying notes are an integral part of these statements.)

	CONSOLIDATED STATEMENTS OF Financial Position TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data)
	Assets			December 31,
				2011			2010
	CURRENT ASSETS:
		Cash and cash equivalents		$78,612			$115,976
		Investments		10,895			7,996
		Accounts receivable trade, less allowances of $1,731 and $1,531		41,895			37,394
		Other receivables		3,391			9,961
		Inventories:
		Finished goods and work-in-process		42,676			35,416
		Raw materials and supplies		29,084			21,236
		Prepaid expenses		5,070			6,499
		Deferred income taxes		578			689
		Total current assets		212,201			235,167
	PROPERTY, PLANT AND EQUIPMENT, at cost:
		Land		21,939			21,696
		Buildings		107,567			102,934
		Machinery and equipment		322,993			307,178
		Construction in progress		2,598			9,243
				455,097			440,974
		Less—Accumulated depreciation		242,935			225,482
		Net property, plant and equipment		212,162			215,492
	OTHER ASSETS:
		Goodwill		73,237			73,237
		Trademarks		175,024			175,024
		Investments		96,161			64,461
		Split dollar officer life insurance		74,209			74,441
		Prepaid expenses		3,212			6,680
		Equity method investment		3,935			4,254
		Deferred income taxes		7,715			9,203
		Total other assets		433,493			407,300
		Total assets		$857,856			$857,959
	Liabilities and Shareholders’ Equity			December 31,
				2011			2010
	CURRENT LIABILITIES:
		Accounts payable		$10,683			$9,791
		Dividends payable		4,603			4,529
		Accrued liabilities		43,069			44,185
		Total current liabilities		58,355			58,505
	NONCURRENT LIABILITES:
		Deferred income taxes		43,521			47,865
		Postretirement health care and life insurance benefits		26,108			20,689
		Industrial development bonds		7,500			7,500
		Liability for uncertain tax positions		8,345			9,835
		Deferred compensation and other liabilities		48,092			46,157
		Total noncurrent liabilities		133,566			132,046
	SHAREHOLDERS’ EQUITY:
		Common stock, $.69-4/9 par value—120,000 shares authorized—36,479 and 36,057 respectively, issued		25,333			25,040
		Class B common stock, $.69-4/9 par value—40,000 shares authorized—21,025 and 20,466 respectively, issued		14,601			14,212
		Capital in excess of par value		533,677			505,495
		Retained earnings, per accompanying statement		114,269			135,866
		Accumulated other comprehensive loss		(19,953	)		(11,213	)
		Treasury stock (at cost)—71 shares and 69 shares, respectively		(1,992	)		(1,992	)
		Total shareholders’ equity		665,935			667,408
		Total liabilities and shareholders’ equity		$857,856			$857,959

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Cash Flows (in thousands)
					For the year ended December 31,
					2011			2010			2009
	CASH FLOWS FROM OPERATING ACTIVITIES:
		Net earnings			$43,938			$53,063			$53,157
		Adjustments to reconcile net earnings to net cash provided by operating activities:
			Depreciation		19,229			18,279			17,862
			Impairment charges		—			—			14,000
			Impairment of equity method investment		—			—			4,400
			Loss from equity method investment		194			342			233
			Amortization of marketable security premiums		1,267			522			320
			Changes in operating assets and liabilities:
			Accounts receivable		(5,448	)		717			(5,899	)
			Other receivables		3,963			(2,373	)		(2,088	)
			Inventories		(15,631	)		(1,447	)		455
			Prepaid expenses and other assets		5,106			4,936			5,203
			Accounts payable and accrued liabilities		84			2,180			(2,755	)
			Income taxes payable and deferred		(5,772	)		2,322			(12,543	)
			Postretirement health care and life insurance benefits		2,022			1,429			1,384
			Deferred compensation and other liabilities		2,146			2,525			2,960
			Others		(708	)		310			305
		Net cash provided by operating activities			50,390			82,805			76,994
	CASH FLOWS FROM INVESTING ACTIVITIES:
			Capital expenditures		(16,351	)		(12,813	)		(20,831	)
			Net purchase of trading securities		(3,234	)		(2,902	)		(1,713	)
			Purchase of available for sale securities		(39,252	)		(9,301	)		(11,331	)
			Sale and maturity of available for sale securities		7,680			8,208			17,511
			Net cash used in investing activities		(51,157	)		(16,808	)		(16,364	)
	CASH FLOWS FROM FINANCING ACTIVITIES:
			Shares repurchased and retired		(18,190	)		(22,881	)		(20,723	)
			Dividends paid in cash		(18,407	)		(18,130	)		(17,825	)
			Net cash used in financing activities		(36,597	)		(41,011	)		(38,548	)
	Increase (decrease) in cash and cash equivalents				(37,364	)		24,986			22,082
	Cash and cash equivalents at beginning of year				115,976			90,990			68,908
	Cash and cash equivalents at end of year				$78,612			$115,976			$90,990
	Supplemental cash flow information
			Income taxes paid		$16,906			$20,586			$22,364
			Interest paid		$38			$49			$182
			Stock dividend issued		$47,053			$46,683			$32,538
(The accompanying notes are an integral part of these statements.)

Five Year Summary of Earning and Financial Hightlights TOOTISE ROLL. INDUSTRY, INC. AND SUBSIDIARIES (Thousands of dollars except per share, percentage and ratio figures)
					2011			2010			2009			2008			2007
	Sales and Earnings Data
		Net product sales			$528,369			$517,149			$495,592			$492,051			$492,742
		Product gross margin			163,144			167,815			175,817			158,055			165,456
		Interest expenses			121			142			243			378			535
		Provision for income taxes			16,974			20,005			9,892			16,347			25,401
		Net earnings			43,938			53,063			53,157			38,880			52,175
		% of net product sales			8.3	%		10.3	%		10.7	%		7.9	%		10.6	%
		% of shareholders' equity			6.6	%		8.0	%		8.1	%		6.1	%		8.1	%
	Per Common Share Data
		Net earnings			$0.76			$0.90			$0.89			$0.65			$0.85
		Cash dvidends declared			0.32			0.32			0.32			0.32			0.32
		Stock dividends			3	%		3	%		3	%		3	%		3	%
	Additional Financial Data
		Working capital			$153,846			$176,662			$154,409			$129,694			$142,163
		Net cash provided by opreating activities			50,390			82,805			76,994			57,333			90,148
		Net cash provided by (used by) investing activities			(51,157	)		(16,808	)		(16,364	)		(7,565	)		(43,429	)
		Net cash used in financing activities			(36,597	)		(41,011	)		(38,548	)		(38,666	)		(44,842	)
		Property, plant & equipment additions			16,351			12,813			20,831			34,355			14,767
		Net property, plant & equipment			212,162			215,492			220,721			217,628			201,401
		Total assets			857,856			857,959			836,844			813,252			813,134
		Long-term debt			7,500			7,500			7,500			7,500			7,500
		Shareholders' equity			665,935			667,408			654,244			636,847			640,204
		Average shares outstanding			57,892			58,685			59,425			60,152			61,580

Notes to Consolidated Financial Statements ($ in thousands)



Revenue recognition:



Products are sold to customers based on accepted purchase orders which include quantity, sales price and other relevant terms of sale. Revenue, net of applicable provisions for discounts, returns, allowances and certain advertising and promotional costs, is recognized when products are delivered to customers and collectability is reasonably assured. Shipping and handling costs of $45,850, $43,034, and $38,628 in 2011, 2010 and 2009, respectively, are included in selling, marketing and administrative expenses. Accounts receivable are unsecured. Revenues from a major customer aggregated approximately 23.3%, 21.4% and 22.9% of net product sales during the years ended December 31, 2011, 2010 and 2009, respectively.

SEGMENT AND GEOGRAPHIC INFORMATION:

The Company operates as a single reportable segments encompassing the manufacturing and sale of confectionery products. Its principal manufacturing operations are located in the United States and Canada, and its principal market is in the United States. The Company also manufactures and sells confectionery products in Mexico, and exports products to Canada and countries worldwide.

The following geographic data includes net product sales summarized on the basis of the customer location and long-lived assets based on their location:

2011   2010   2009   Net product sales:               United states   $487,185   $471,714   $455,517   Foreign   41,184   45,435   40,075       $528,369   $517,149   $495,592   Long-lived assets:               United states   $170,173   $172,087   $176,044   Foreign   41,989   43,405   44,677       $212,162   $215,492   $220,721

Calculate the accounts receivable turnover and average collection period for 2011. (Use “Net Product Sales.” Assume all sales were credit sales.) (Round answers to 1 decimal place, e.g. 15.2.)

Accounts receivable turnover		[removed]	times
Average collection period		[removed]	days