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Business Plan and Loan Package

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Running head: TOOTSIE ROLL INDUSTRIES, INC. LOAN PACKAGE

Tootsie Roll Industries, Inc. Loan Package

ACC561
22 September 2011

Introduction

Now that the small business idea has become more that just fine print, it is time to put together a loan package that explains the story of the company. There are important questions to answer, demonstrating the company’s ability to correctly make important financial decisions, and detail how the business will pay off the loan. This paper will include the requirements of a loan package, creditor requirements, a ratio analysis, loan justification, and how the company plans to use the proceeds.

Tootsie Roll Industries, Incorporated Loan Package

Loan Package Requirements

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needs a loan to supplement operational expenses and decrease the negative impact market risk factors may have on sales volume. In 2007, the product cost of goods sold increased from costs incurred 2006 as a result of significant increases in prices of many commodities purchased by Tootsie Roll. These commodities consist of some of the major ingredients used in Tootsie Rolls and other products, such as corn syrup, dextrose, milk products, vegetable oils, sugar, and gum base ingredients (Tootsie Roll Industries, 2011).
As a percentage of net sales, product cost of goods sold increased from 62.8% in 2006 to 66.5% in 2007 (Kimmel, Weygandt, & Kieso, 2009). Light freight and delivery costs increased as a result of increases in energy costs, such as oil used for fuel. Exchange of foreign currency on products manufactured in Canada has generated an adverse effect as well, even though sales growth has increased. Tootsie Roll Industries, Inc. has made efforts to offset the increases in costs of commodities through selective price increases and reducing costs where possible (Kimmel, Weygandt, & Kieso, 2009). However, the company has not been able to recover all of the costs associated with the increases in commodities.
The company does not want to risk product price

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