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Author Question: Tootsie Roll Industries, Inc. has been engaged in the manufacture and sale of candy since 1896. Its ... (Read 17 times)

kodithompson

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on: Apr 25, 2021
Tootsie Roll Industries, Inc. has been engaged in the manufacture and sale of candy since 1896. Its products are sold under the familiar brand names Tootsie Roll, Tootsie Roll Pops, Charms, Blow Pops, Cella's, Mason Dots and Mason Crows. Tootsie Roll operates four plants in Illinois, New York, Tennessee and Mexico. Tootsie Roll is traded on the New York Stock Exchange and maintains its head office in Chicago, Illinois.

Tootsie Roll's financial statements for and Year 6 are provided below.

Tootsie Roll Industries Inc.
Balance Sheet
As of December 31, Year 6 ($000s)
​Year 6
Cash & marketable securities36,758
Accounts receivable16,207
Inventories22,927
Prepaid expenses2,037
Total Current Assets77,929
Net Fixed Assets32,099
Other assets49,674
Total Assets159,702
Accounts payable8,253
Accrued liabilities14,298
Total Current Liabilities22,551
Long-term debt7,306
Shareholders' Equity​
Common stock6,698
Capital in excess of par50,820
Retained earnings72,327
Total Shareholders' Equity129,845
Total Liabilities & Equity159,702


Tootsie Roll Industries Inc.
Income Statement
As of December 31, Year 6 ($000s)
​Year 6
Net sales194,299
COGS103,205
SG&A54,329
EBIT36,765
Interest expense612
Other income (expenses), net966
Income before income taxes37,119
Income taxes14,563
Net Income22,556
Total Cash dividends12,316
Shares Outstanding9,645
Average price per share (4th Q)$36.50 

Selected Financial Ratios
​Year 6Industry Avg
Net Profit Margin​8.2%
Total Asset Turnover​1.64
ROA​13.4%
Equity Multiplier​1.42
ROE​19%
Referring to the financial statements for Tootsie Roll, what amount of leverage (i.e. debt-to-equity) would Tootsie need to make its year Year 6 return on equity equal (ROE) to the industry average ROE? (Round to initial ratios to nearest percentage.)
◦ 0.3456
◦ 0.9200
◦ 1.1333
◦ 1.4200
◦ 1.7632
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by kodithompson on Apr 25, 2021

l.stuut

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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kodithompson

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Reply 2 on: Apr 25, 2021
Great answer, keep it coming :)

matt95

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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