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 Year 6 are provided below.

Tootsie Roll Industries Inc.

Balance Sheet

As of December 31, Year 6 ($000s)

Year 6Cash & Marketable Securities36,758Accounts receivable16,207Inventories22,927Prepaid Expenses2,037Total Current Assets77,929Net Fixed Assets32,099Other Assets49,674Total Assets159,702Accounts Payable8,253Accrued Liabilities14,298Total Current Liabilities22,551Long-term Debt7,306Shareholders' EquityCommon Stock6,698Capital in Excess of Par50,820Retained Earnings72,327Total Shareholders' Equity129,845Total Liabilities & Equity159,702

Tootsie Roll Industries Inc.

Income Statement

As of December 31, Year 6 ($000s)

Year 6Net Sales194,299COGS103,205SG&A54,329EBIT36,765Interest Expense612Other Income (Expenses), Net966Income before Income Taxes37,119Income Taxes14,563Net Income22,556Total Cash Dividends12,316Shares Outstanding9,645Average Price per Share (4th Q)$36.50

Selected Financial Ratios

Year 6Industry AvgNet Profit Margin8.2%Total Asset Turnover1.64ROA13.4%Equity Multiplier1.42ROE19%

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 (ROE) equal to the industry average ROE? (Round to initial ratios.)

0.34560.92001.13331.42001.7632