Hasbro and Mattel, Inc., are the two largest toy companies in North America. Condensed liabilities and stockholders’ equity from a recent balance sheet are shown for each company as follows (in thousands):

The income from operations and interest expense from the income statement for each company were as follows (in thousands):

a. Determine the ratio of liabilities to stockholders’ equity for both companies. Round to one decimal place.
b. Determine the number of times interest charges are earned for both companies. Round to one decimal place.
c. Interpret the ratio differences between the twocompanies.

Transcribed Image Text:

Hasbro Mattel Current liabilities Long-term debt Deferred liabilities 71880 1350,282 950,000 1397,681 361,324 488,867 2477,806 2,789,149 Total liabilities Shareholders' equity: Common stock Additional paid in capital Retained earnings Accumulated other comprehensive loss and other equity items S104,847 441,369 625,96 1,706,461 2,978,317 2,720,645 8,149 (359,199) (2,101854) 1880,692) $1,615,420 2,628,584 4,093,226 5417,733 Treasury stock, at cost Total stockholders'equity Total liabilities and stockholders'equity Hasbro Mattel Income from operations Interest expense $397,752 $684,863 82,112 64,839