Research Paper: Analysis of the Internal Environment at Tootsie Roll Industries

This assignment draws upon financial information available through the Hoover’s Online database through our library’s electronic databases, ebooks and media collection. (Once you click on the link to Hoover’s online just type in “Tootsie Roll Industries, Inc.” and the information will pop up. It’s the first “Tootsie Roll Industries, Inc.”. The “income statement” and the “ratio comparisons” information can be found on the left-handed side underneath “Financials”). I have also uploaded the video of how to complete the “common sized” income statement.

Write a report containing the following information/analyses:

A. Using Tootsie Roll’s income statement from Hoover’s Online, prepare a “common sized” income statement where all data (except sales) is expressed as a percentage of sales and covering at least 3 years of operation. Analyze the common sized income statement you prepared by discussing the following:

1. The year-by-year trends that you consider significant.
2. The overall health of TR as reflected in these trends.
3. Areas of operation that might need immediate management attention. Areas of operation that seem especially strong.

B. Access the “ratio comparisons” information on Tootsie Roll Industries through Hoover’s Online and discuss the following:

1. Compare and discuss the following ratios for TR with “conventional wisdom” (i.e., the broadly-held opinion on what a “good” ratio is) and with the industry’s median ratio: Gross Profit Margin, Net Profit Margin, Return on Assets, Return on Equity, Inventory Turnover, Net Receivables Turnover Flow, Current Ratio, and Total Debt/Equity.
2. Which of the ratios you would find most useful in making day-to-day management decisions, and why?
3. Which of the ratios you would find most useful in making strategic decisions, and why?

C. Your response must be formatted in APA style. I have provided an APA Report Template.

1. From Exhibit 3.1, p. 49 in Harrison & St. John, which of the 5 basic resource categories provides the best explanation for Tootsie Roll’s strategic success? Which factor (or factors) within that category are particularly significant, and why?
2. From Exhibit 3.1, p. 49 in Harrison & St. John, which of the 5 basic resource categories is weakest for Tootsie Roll Industries? Which factor (or factors) within that category are particularly significant, and why?

A. You may use any resources available to you to respond to the above, but you must cite any resource that you use. This includes help from colleagues, journal articles, textbooks, web pages, and any other resource used – whether printed or not.

B. There is quite a bit of good background information in the Tootsie Roll Industries case. (I have uploaded). Please make use of it. There are excellent resources available through the University’s Library system. One resource that you may wish to use is the Hoover’s Online business information resource (https://ezproxy.uu.edu/login?url=http://www.mergentonline.com/hoovers (Links to an external site.)). This resource provides company, industry and other information useful in research of this kind. Another good resource for candy-industry-specific information is Candy Industry Magazine (Links to an external site.) (the magazine of a trade organization). You will need to create a (free) account to access some of the articles/information (don’t worry – I have NOT been spammed by these folks!).

C. Your response must be formatted in APA style. I have provided an APA Report Template

Textbooks: Harrison, J. & St. John, C. (2014). Foundations in Strategic Management, 6th ed. Cincinnati, OH. South-Western. ISBN 9781285057392

Porter, M. (1980; 1998). Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York. The Free Press. ISBN 9780684841489

Either edition of the Porter book is acceptable.