Tootsie Roll Paper Essay Example for Free

Tootsie Roll Paper EssayTootsie Roll Industries Inc. Loan Package The financial statement of Tootsie Roll Industries provides insightful details into thefinancial activities of the decades mature 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 cognize for products such(prenominal) as Tootsie Rolls, Tootsie Roll Pops, Caramel Apple Pops, Childs Play, Charms, Blow Pop, Blue Razz, Cellas chocolate covered cherries, Mason Dots, Mason Crows, junior-grade 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 introduction of a bring package to increase companys total liabilities by 10%. A loa n package requires research to ensure that alone 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, whichincludes the business background, business nature, loan amount, loan purpose, quittance terms, loan benefits, business profile, and management experience (U.S. Small Business Association, n.d.). The borrower must provide proper documentation including frame of reference 4 Application for Business Loan, Form 4-a Schedule ofPersonal History, Form 1624 Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Lower Tier Covered Transactions, and Form 1846 Statement Regarding Lobbying (U.S. Small Business Association, n.d.).Lenders and borrowers must crop together in order to apply for the most applicable loan to the business. According to U.S. Small Business Association (n.d.), Borrowers should provide complete financial statements for the survive three years including balance sheets, income statements, and a reconciliation of net worth as well as a current (no more than 90 geezerhood old) interim financial statement (Business Financial Statements). The borrower must also provide projections to the creditor. The projections predict a year out or the positive flow of cash, which includes earnings, expenses, and the reasons tramp the projections (U.S. Small Business Association, n.d.).The borrow should includ e documentation to assist in the predications such as contracts of lease proposals, franchise agreements, purchase agreements, articles of incorporation, plans, specifications, copies of licenses, letters of reference, letters of intent, and contracts union agreement (U.S. Small Business Association, n.d.). If the borrower does not provide the proper documentation to the creditor, then the borrower is not likely to receive loan approval. Financial statements are linchpin supporting documents to the loan package.