Tootsie Roll Industries Inc. Loan Package
TOOTSIE ROLL INDUSTRIES INC. LOAN PACKAGE Tootsie Roll Industries Inc. Loan Package The financial statement of Tootsie Roll Industries provides insightful details into the
financial activities of the decades old organization. A financial statement is the “summary report that shows how a firm has used the funds entrusted to it by its stockholders and lenders, and what is its current financial position” ("Financial statement," 2012). The company is known for products such as Tootsie Rolls, Tootsie Roll Pops, Caramel Apple Pops, Child’s Play, Charms, Blow Pop, Blue Razz, Cella’s chocolate covered cherries, Mason Dots, Mason Crows, Junior Mints, Junior Caramels, Charleston Chew, Sugar Daddy, Sugar Babies, Andes, Fluffy Stuff cotton candy, Dubble Bubble, Razzles, CryBaby, Nik-L-Nip and El Bubble (Kimmel, Weygandt, & Kieso, p. A-2, 2009). Strong financial statements aid Tootsie Roll Industries in the submission of a loan package to increase company’s total liabilities by 10%. A loan package requires research to ensure that all details are met as well as a ratio analysis of liquidity, solvency, and profitability ratios. The company must justify the reason for the need of the loan, such as expansion, inventory purchases, or debt retirement. Finally, Tootsie Roll Industries must provide an explanation of how the company plans to use the proceeds from the loan as well as how loan approval might affect the company. “A loan package is the collection of documents associated with a specific loan application” ("Loan package," 2012). Loan packages are instrumental in the startup and growth of many small businesses because it provides initial funding and support. The process begins typically with a cover letter, which includes the business background, business nature, loan amount, loan purpose, repayment terms, loan benefits, business profile, and...