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Tootsie Roll Industries Inc. Loan Package

Read the financial statement for Tootsie Roll Industries Inc. The financial statement can be found here: http://www.annualreports.com/Company/5072

Conduct an Internet search information on how to assemble a loan package by researching loan package requirements at The U.S. Small Business Administration website (http://www.sba.gov/) or on other websites, such as the SCORE website (http://www.score.org/). Research the specific loan package requirements of creditors, such as American Express, by reviewing their websites.

-Prepare a loan package to secure a loan for Tootsie Roll Industries Inc. that would increase the company's total liabilities by 10%. Your loan package should include the following:

-A ratio analysis of the financial statements for Tootsie Roll Industries Inc., including several types of liquidity, solvency, and profitability ratios and an explanation of each ratio

-A justification of the reason the company needs this loan; the purpose might be for expansion, inventory purchases, debt retirement, and so on

-An explanation of how the company plans use the proceeds from the loan and of how loan approval might affect the company

Solution Preview

Please see below the ratios of Tootsie, for calculations see the excel file attached:

Profitability Analysis ratios 2011 2010 2009

ROA 5.12% 6.18% 6.34%
ROE 6.60% 7.95% 8.11%
Gross Profit Margin 31.2% 32.8% 35.8%
Liquidity Analysis ratios Dec 2010 Dec 2009 Dec 2008

Current Ratio 3.6 4.0 3.8
Quick Ratio 2.3 2.9 2.6
Leverage Analysis ratios Dec 2010 Dec 2009 Dec 2008

Debt to Asset 0.008743 0.008742 0.008947
Debt to Equity 0.0113 0.0112 0.0114
Times Interest Earned 0.0 0.0 0.0
Laverage Analysis ratios Dec 2010 Dec 2009 Dec 2008
Inventory Turnover 5.1 6.2 5.7
Account Receivable Turnover 11.8 11.0 10.9
Average collection ...

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Solution discusses the Tootsie Roll Industries Inc. Loan Package