17.10

Ratio of Liabilities to Stockholders' Equity and Times Interest tamed Hasbro, Inc., and Mattel, Inc., are the two largest toy companies in North America. Condensed abilities and stockholders' equity from a recent balance sheet are shown for each company as follows (in thousands) Hasbro Mattel Labilities: Current liabilities $3,561,000 $6,402,000 Long-term debt 1,918,100 2,540,000 Other liabilities 1.219,600 Total liabilities $5,479,100 $10,161,600 Shareholders' equity: Common stock $339,000 $1,524,000 Additional paid in capital 1,046,000 5,589,000 Retained earnings 6,510,000 5,758.000 Accumulated other comprehensive income (loss) and other equity items 75,000 (931,000) Treasury stock, at cost (2,989,000) (3,472,000) Total stockholders' equity $4,981,000 $8,468,000 Total liabilities and stockholders' equity $10,460,100 $18,629,600 The income from operations and interest expense from the income statement for both companies were as follows (in thousands): Hasbro Mattel Income (loss) from operations (before income tax expense) $1,426,170 $3,874,500 Interest expense 104,100 315,000 Total stockholders' equity $4,981,000 $8,468,000 Total liabilities and stockholders' equity $10,460,100 $18,629,600 The income from operations and interest expense from the income statement for both companies were as follows (in thousands): Hasbro Mattel Income (loss) from operations (before income tax expense) $1,426,170 $3,874,500 Interest expense 104,100 315,000 a. Determine the ratio of liabilities to stockholders equity for both companies. Round your answers to one decimal place. Hasbro, Inc Mattel, Inc. b. Determine the times interest earned ratio for both companies. Round your answers to one decimal place. Hasbro, Inc Mattel, Inc. c. Hasbro, Inc. provides a slightly better margin of safety to creditors. Earnings for both companies appear adequate to make interest payments