Loan Package

Tootsie Roll Industries Inc. Loan Package

ACC 561

Tootsie Roll Industries Inc. Loan Package

Intro goes here.

Ratio Analysis

Following are the detailed ratios and their associated analysis for Tootsie Roll Industries, Inc. (TRII) for consideration as part of this loan package. The ratio analysis includes the liquidity, solvency, and profitability ratios.

Liquidity Ratios

Liquidity ratios “measure the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash” (Kimmel, Weygandt, & Kieso, 2009). Long term creditors find the liquidity ratios in table 1 of most interest. TRII’s working capital ratio shows current assets are greater than current liabilities, indicating TRII’s ability to meet its liabilities. The current ratio is indicates TRII’s ability to meet its maturing obligations and be prepared for any unexpected cash needs. Tootsie Roll Industries has a strong current ratio as it has $3.45 of current assets for every dollar of current liabilities, well above the .40 threshold. The inventory turnover ratio of 5.4 times as well as 67.6 days in inventory ratio shows how many times in a given year TRII is able to turnover its inventory and how many days before a product is sold.

Table 1.

Liquidity Ratios

|Ratio Name |Equation |Company Data |Result |

|Working Capital |Current assets- Current liabilities |$199,726-$57,972 |$141,754 |

|Current Ratio |Current Assets |$199,726 |3.45:1 |

| |Current Liabilities |$57,972 | |

|Current cash debt coverage |Cash provided by operations |$90,064...