Tootsie Roll Corporation

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See attached Excel file.

The response addresses the queries posted in 2099 words with references.

//The Financial Analysis is regarded to be an important tool for the organization as it renders help for gaining the financial position of the company in terms of the revenues generated by the company. Before starting a paper like this it is crucial to throw light upon the company by enclosing a brief introduction.//

Memorandum

To: XYZ

From: ABC

Date: 20/01/10

Subject: Financial Statement Analysis

Introduction

The Tootsie Roll Industry is a leading company in its industry. The performance of this company is benchmark for the competitors. There is no need of introduction for the organization. The firm was founded in 1896 in New York by Austrian-born Leo Hirshfield. Initially, Leo Hirshfield made limited confectioner's items but now the company has a wide range in confectioner items including oblong, individually wrapped, chocolate candy, chewy that are consumer's favorite products. The organization earns money by delivering quality products. Thus the customer satisfaction matters a lot for the company. So, this kind of philosophy makes the company different from its rivals. The Human resource management of the company is also sound. It can be reflected from the fact that the company believes that the employees are assets for them (Tootsie Roll Industry).

Ratio Analysis

Ratio analysis is a good for analysis of financial situation of the company. It provides an idea about where company has failed to achieve its financial targets. In the ratio analysis, every aspect of the organization's financial situation is analyzed. With the help of the ratio analysis, we can get insight about future trend for future growth of the company. Mainly, the ratio analysis tool is used to make a comparison between year to year performance and comparison with industry's performance. There are many ratios which are used to evaluate performance of the organization. As the investor's point of view, the calculated ratio of the company is very useful for decision making. The investor can get hunch about management skills and future trend of the company (Tootsie Roll Industry).

//The next part requires simplifying the ratio analysis along with describing the Return on asset and return on equity ratio that is supposed to be helpful for the firm as it furnishes support for arriving at a quick-witted decision.//

The Return on assets ratio plays a vital role in performance analysis. As the Return on assets ratio increases, the market worth of the company also spurs. The Return on assets attracts investors to invest in the organization. It provides relative measurement rather than absolute measurement. The Return on assets of Tootsie Roll in 2006 and 2005 was 8.33% and 9.49%, respectively. In 2006, the return on assets has decreased by 1.16% in comparison to 2005. It was a significant matter for the management. The net earnings in 2006 and 2005 was $65,919(Thousand) and $ 77,227 (Thousand), respectively. Thus the net profit of the company reduced in 2006 whereas the amount of total assets is also reduced in 2006 but less percentage in comparison to net earnings. There are many reasons that are responsible for ...