Verified Document

Tootsie Roll Corporation The Financial Ratio Analysis Essay

Tootsie Roll Corporation The financial ratio analysis provides a financial picture of a company that serves as a useful tool for investors, management and creditors. Management uses the financial ratios to improve a company's operating efficiency and achieving future growth. More importantly, investors and creditors use the financial ratios to evaluate financial health of a company. This report evaluates the financial ratio of Tootsie Roll using the company last quarter financial statements of 2013 to measure the company's profitability and liquidity. Since Tootsie Roll focuses on the manufacturing and sales of the confectionary product, the report bases the company performance on liquidity and profitability. The paper calculates the ratios from the company's balance sheet and income statements.

Objective of this report is to conduct a comparative ratio analysis of the Tootsie Roll to measure the company profitability and liquidity. The report uses the company last quarter financial statements of 2013 for the analysis.

Company Overview

Tootsie Roll Industries, Inc. is a multinational company that specializes in the manufacture and sales of the confectionary products. The company markets its products using variety of packages suitable for sale and display. The company also displays majority of its product under the trademarks such as TOOTSIE ROLL POPS, TOOTSIE ROLL, CARAMEL APPLE POPS, and other trademarks. The principal markets for the company are in the United States, Canada, and Mexico. (Security Exchange Commission, 2013).

Comparative Ratio Analysis of Tootsie Roll

Liquidity

'Liquidity ratios...

This paper uses the current ratio and quick ratio to measure ability of Tootsie Roll to meet its short-term obligation.
Current Ratio

Current ratio is a liquidity ratio that measures the ability of Tootsie to meet its short-term obligations. (Beechy, & Conrod.2013 p 19). A company that records current ratio that is more than one has better ability to settle its short-term obligations. The formula to measure the company current ratio is as follows:

Current Ratio = Current Assets / Current Liabilities

At the end of 2013 last financial quarter, the Tootsie Roll current ratio is as follows:

June 2013 Tootsie Current ratio: 193,706,000 / 62,980,000

June 2013 Tootsie Current ratio= 3.07

Overview of the company liquidity ratio at the end of the last financial quarter shows that the company has a strong ability to settle its short-term obligation such as debts, and payable. Typically, the company demonstrates higher ability to settle its short-term- obligation because the company records 3.07 as the current ratio at the end of the 2013 last quarter.

Quick Ratio

Quick Ratio is similar to current ratio because it also measures an ability of a company to measure its short-term obligation. (Beechy, & Conrod.2013 p 19). Unlike the current ratio, quick ratio does not consider inventory in the calculation. The formula to calculate quick ratio of Tootsie Roll is as follows:

Quick Ratio = (Current Assets - Inventories)…

Sources used in this document:
Reference

Beechy, T.H. & Conrod J.E.D. (2012). Intermediate Accounting. (Fifth Edition) .McGraw-Hill. Ryerson Limited, Canada.

Security Exchange Commission (2013). Tootsie Roll Industries, Inc. USA.

Wiener, Z. (2001). Financial Statement Analysis BKM Chapter 19. McGraw-Hill Company.
Cite this Document:
Copy Bibliography Citation

Related Documents

Financial Ratio Analysis
Words: 2111 Length: 8 Document Type: Term Paper

Financial Ratio Analysis for Xerox Xerox Corporation is company in the field of technology and services, which is currently developing, manufacturing, marketing, and financing a whole range of document equipment, software, integrated solutions and services. They have a global network, with branches in more than 130 countries all over the world. In America, its products are distributed through divisions, subsidiaries and third-party distributors. In the rest of the world (Europe, Africa,

Financial Ratio Analysis Liquidity Apple
Words: 1702 Length: 4 Document Type: Research Paper

This means that Apple is generating more cash internally than Google. Further, given the increase in cash flows from operations in the case of Apple means that the company could have an enhanced value of net income in future. When it comes to cash flows from investing activities, there is an increase in the same in the case of Apple in the current financial year in comparison to the

Financial Ratio Analysis, a Tool That Shows
Words: 1390 Length: 5 Document Type: Research Paper

financial ratio analysis, a tool that shows how figures between the balance sheet and the income sheet are related. Ratios are used to appraise a company's past financial performance and its potential for the future. A company's financial statements are of interest to creditors, investors, financial analysts and internal accountants. Using ratios helps them to analyze the overall financial health of a business. By computing financial ratios, one is

Financial Ratio Analysis for Government
Words: 617 Length: 2 Document Type: Discussion Chapter

Ratio analysis is not used in as widespread a manner in government as it is in the private sector. While they are very necessary, they have to be adapted specifically to the unique problems of the public sector which is not based upon profit. These primary issues include the weaknesses in the way that the key information elements needed for the assessment financial condition is reported. Though reporting methods have

Financial Ratios Analysis of a Prospective Borrower
Words: 588 Length: 2 Document Type: Research Paper

Financial Ratios of a Prospective Borrower Financial ratio analysis is a quantitative tool used to analyze financial standing of a business entity. The ratio analysis can also be used to compare financial capabilities of companies in different industries. This paper discusses how financial ratios can be used to answer questions about the management, marketing, and production capabilities of a prospective borrower. The paper also identifies ratios that demonstrate management competency

Financial Ratio Analysis
Words: 930 Length: 3 Document Type: Essay

Ratio Analysis Company Overview South Nassau Communities Hospital is a healthcare organization that delivers wide range of healthcare services for the communities of the Oceanside in New York. The organization offers general and specialty health services such as medical services, and surgical services for the varieties of patients' health cases. The financial results of the South Nassau Hospital at the end of the 2012 reveals that the Hospital recorded the revenue of $400

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now