Loan Package
Tootsie Roll Industries, Inc. an internationally recognized company has been in business for over 100 years. The giant manufacturers sell some of the most popular candies across the world. Tootsie Roll Industries, Inc. seeks additional funding for Enterprise Resource Planning upgrades throughout the company. With the knowledge of increasing total liabilities by 10% or 2.5 million, Tootsie Roll Industries, Inc. has prepared an updated business plan displaying the company’s history, vision statement, products and services, management practices, financial statements, and the company application of the loan proceeds. Tootsie Roll Industries, Inc. also outlines how the company plans to repay this loan, which can help persuade the loan officer to approve the funding. Ratio analysis, justification for the loan and how the loan will be applied are important aspects reviewed in this report.
Ratios
Ratios are used by organizations to compare financial information and performance. Ratio comparisons can be used to compare the financial performance of time periods within the same organization or to compare the performance of different organizations. Ratios are also used to evaluate the financial health of an organization. For example lenders will use financial ratios to determine the organization’s willingness to loan Tootsie Roll Industries, Inc. money. Common ratio categories used include liquidity, solvency, and profitability. By conducting the ratios evaluations the organization can determine the financial health of the organization (Kimmel, Weygandt, & Kieso, 2009).
Liquidity
Liquidity ratios are an indication of the organization ability to pay back debts owed within a year or operating cycle. Because this ratio determines the organization’s ability to pay, liquidity ratios, including the current ratio use the only assets that can be liquidated quickly. In the case of Tootsie Roll Industries, Inc. Industries the organizations working capital in 2007 is
Ratios
Ratios are used by organizations to compare financial information and performance. Ratio comparisons can be used to compare the financial performance of time periods within the same organization or to compare the performance of different organizations. Ratios are also used to evaluate the financial health of an organization. For example lenders will use financial ratios to determine the organization’s willingness to loan Tootsie Roll Industries, Inc. money. Common ratio categories used include liquidity, solvency, and profitability. By conducting the ratios evaluations the organization can determine the financial health of the organization (Kimmel, Weygandt, & Kieso, 2009).
Liquidity
Liquidity ratios are an indication of the organization ability to pay back debts owed within a year or operating cycle. Because this ratio determines the organization’s ability to pay, liquidity ratios, including the current ratio use the only assets that can be liquidated quickly. In the case of Tootsie Roll Industries, Inc. Industries the organizations working capital in 2007 is
References: Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2009). Accounting, 3/e WileyPLUS. Retrieved from http://edugen.wiley.com/edugen/student/main.uni John Wiley & Sons. (2009). Management Discussion and Analysis. Retrieved from John Wiley & Sons, ACC/531 website.