Acc/561 Wk3 Tootsie Roll Industries Inc. Loan Package
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Tootsie Roll Industries Inc. Loan Package
ACC/561 - Accounting
August 15, 2011
Tootsie Roll Industries Inc. Loan Package Since the company’s establishment in 1896, Tootsie Roll Industries Inc. has expanded to become one of the biggest candy companies in the United States. Tootsie Roll Industries Inc. is one of America’s most recognized candy companies through manufacturing and selling some of the most popular candies in the world. The company has an extensive amount of products sold in many venues including grocery stores, vending machines, and drugstores. Tootsie Roll Industries Inc. applies innovation consistently by developing new forms of presentation and creating more options for the consumer. In the first quarter of 2011…show more content… Tootsie Roll Industries Inc. expects this project to increase profits by selling more to the consumer, cutting distribution costs through shorter shipping routes, and creating a faster connection to consumers in the surrounding region. The company will reduce its risk of unforeseen circumstances, such as a natural disaster, halting operations if a distribution center were affected because it would have the option to reroute operations through another facility. Tootsie Roll Industries Inc.’s products will be made available in more locations and will increase consumer awareness of the many products the company offers. With the projected increased revenue this distribution center will bring Tootsie Roll Industries, Inc. will be able to pay the loan back in three years rather than the traditional five years.
Uses of Loan Proceeds and Effects on Company Taking on this loan will increase liabilities by 10%. Obviously, Tootsie Roll Industries, Inc. must have a plan to use the proceeds of this loan. The biggest portion of proceeds from this loan will be used for investing in new equipment. As stated in the corporate principles, “we invest in the latest and most productive equipment to deliver the best quality product to our customers at the lowest cost” (Kimmel, 2009). In addition, Tootsie Roll will use the proceeds to expand on the distribution center so the company can keep up with demand