Tootsie Roll vs. Hershey: Financial Ratio Analysis

What makes this paper effective

• Applies a clear, multi-framework approach — DuPont, liquidity, profitability, and asset management — giving a well-rounded financial portrait of both companies rather than relying on a single metric.
• Uses direct year-over-year comparisons (2001 vs. 2002) to contextualize ratio changes, making the analysis more meaningful than point-in-time snapshots alone.
• Maintains analytical balance by acknowledging both strengths and weaknesses in each company before arriving at a final recommendation, which strengthens the paper's credibility.

Key academic technique demonstrated

The paper demonstrates comparative ratio analysis, a foundational technique in corporate finance where multiple financial indicators are computed from income statement and balance sheet data, then benchmarked against a direct industry rival. This approach illustrates how no single ratio tells the whole story — for example, Tootsie Roll's liquidity looks strong in isolation but reveals inefficiency when interpreted alongside its asset turnover figures.

Structure breakdown

The paper opens with brief company profiles to orient the reader, then proceeds systematically through four categories of financial ratios: DuPont/ROE, liquidity, profitability, and asset management. Each section presents data tables for both companies, interprets the numbers, and draws comparative conclusions. The paper closes with a concise investment recommendation grounded in the cumulative findings. This funnel structure — from description to data to interpretation to judgment — is a model for applied finance writing.