Calculating and interpreting long-term liquidity ratios. Data tal

Hasbro acquired Tonka, also a toy company, in Year 2.

a. Compute the long-term debt ratio and the debt-equity ratio at the end of Year 2, Year 3, and Year 4.

b. Compute the cash flow from operations to total liabilities ratio and the interest coverage ratio for Year 2 through Year 4.

c. How has the long-term liquidity risk of Hasbro changed over this three-year period?

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For the Year Year 2 Year 3 Year 4 Net Income before Interest and Income Taxes $248 $328 $370 Cash Flow from Operations. 120 230 217 Interest Expense 43 36 30 On December 31 Long-term Debt ... Total Liabilities Total Shareholders' Equity Year 1 Year 2 Year 3 Year 4 $ 57 $380 $ 206 $ 200 418 995 977 1,016 867 955 1,106 1,277