Tootsie Roll Industries Inc. Loan Package Essay Example | Topics and Well Written Essays - 500 words

Tootsie Roll Industries Inc. Loan Package - Essay Example Tootsie Roll Industries has a great pool of working capitol. In many cases companies can borrow money cheaper than spending their working capitol. As an example if the 10% increase in liabilities for Tootsie Rolls Industries costs them less in interest than the money will generate in revenue, then the investment is well worth the increase. On the other hand, if the increase in revenue generated is projected to be less than the 10% increase in liabilities than Tootsie Roll Industries would be better served looking for other funding sources. The following proposal justifies the loan for expansion inside our Tootsie Roll Industries and increase total liabilities by 10%. We are expanding our current Tootsie Roll candies by creating a â€Å"mini† Tootsie Roll with a dark chocolate center. Product studies show that this new product is very popular among test sites. By re-directing a portion of our high volume sales to major distributors whose sales have remained on par or below average per quarter since 2010, we can increase total revenue and re-branding of our Tootsie Roll products. The candy industry market is saturated and very competitive. Large end competitors produce high volume candies and distribute to wholesale distributors for average profit. Our goal is to target the customers who also purchase the wildly popular Tootsie Roll product by adding a new dimension and re-energizing our existing customer base and introducing new customers with this product line. The loan provides the additional revenue required to produce the new product at low costs and distributed to targeted distributors for sale. By creating a new product and re-energizing our existing customer base, we will grow our brand while delivering high quality candies. The change in strategy increases revenue, generates more tax dollars, and expands the Tootsie Roll brand into the next century. As noted the loan will be implemented for