Comprehensive Questions On HABRO Annual Report Q1- During which year (1996 or 1997), the firm was doing well in terms of : 2-A/R : Account Receivables bTrade Payables (Account Payable) Inventories d- CCC. To do so, you may compute DSO, DPO & DIO (DOH) before Calculating the firm's CCC during the years 1996 & 1997 (See the formulas in the appendix). 02- Comment on the firm PREPAID EXPENSES between 1996 & 1997. 03- Does the firm Divest or Invest in PP&E (Plants, Properties & Equipement)? - Suuport your answer by using your own ratios. Q4-What is your take on the firm's strategy of Re-acquiring its common shares ? Compare the case the two years, 05- Is the firm kin to go for more or less short term debt? - Explain. Specifically, does the debt be used to finance the cash dividends or the treasury stocks? And in which proportion ? Is it appropriate for the firm to do so ? 06-Compute the following ratios : ROE, ROA, Operating Leverage (Gross Profit/EBIT), Interest Burden (EBT/EBIT), Debt-to-Assets Ratio (D/total Assets), Interest Coverage (EBIT / Interest). Financial Leverage (EBIT/EBT) and Total Leverage (Operating Leverage x Financial Leverage) Write your own interpretaion for each ratio (calulated for 1996 & 1997) using short paragraphs. Appendix Days of Sales Outstanding (DSO) (365/Receivables Turnover) Days of Inventory on Hand (DIO) (365/Inventory Turnover) Days of Payables Outstanding (DPO) (365/Payables Turnover Ratio) Cash Conversion Cycle (Days of inventory, DIO) + (Days of Sales Outstanding, DSO) - (Number of Days of Payables Outstanding. DPO) CONSOLIDATED BALANCE SHEETS 1997 1996 December 21, 2017 and December 23, 2016 (Thomade Damat Shan Duta Assets S 361,785 218 971 Current assets Cash and cash equivalents Accounts receivable less allowance for doubtful accounts of 551.700 in 1997 and $46.600 in 1996 Inventarios Prepaid expenses and other current 783.000 212.702 136,379 307,149 273.247 187.222 Total current assets 1,573,874 1.486.589 280.663 313545 Property, plant and equipment, net Other assets Cost in excess of acquired net assets, les accumulated amortization of $128.237 in 1997 and $115.312 in 1996 Other intangibles, loss accumulated mortization of $135.467 in 1997 and $102.387 in 1996 186502 460,457 78.798 79,940 364987 75,921 Other Total other assets 1.045.240 301 375 Total assets $2.199,717 2701509 Hasbro. Hasbro, Inc. (a syllabic abbreviation of its original name, Hassenfeld Brothers is an American multinational toy and board game company. Founders were: Hillel H., Henry H., Herman H.) It is the largest toy maker in the world in terms of stock market value, and third largest with revenues of approximately $5.12 billion CONSOLIDATED STATEMENTS OF EARNINGS 1996 1995 Hat Yair (The Dalet She Net revenues Cost of sales Gross profit 1907 5.5.5 13.05 3,062370 1.37 2.5210 1727 17 11013 SIE 36.912 418.54 617,140 0.004 3990234 41B 3421 304704 417.86 555 280 31.100 125.000 Expenses Amortation Movies, esant and devenit Advertising Solling dibution and distin estructuring charge and discontinued to prot Total Operating profit Nonoperating income) ponse Interest Other compon, net Total Earnings before income taxes 1.504393 235,00 1301200 3327 .222.22 31.450 27. 27.435 3.092 30.583 204525 (5.00 25374 30.93 252.55 90.97 Income taxes Net earnings 6553 134,30 101 190.012 Per common share ting De 105 1.02 15 Cashdviden det ] 12 (7) Long-Term Debt torte... Sit the comedian (a) Treme The -Incame the natitage tatian team 1888 nes Suite DE 41 Det Used Seo DU 22 000 w ES Certain tabeflected in the age of 2 56.739 in 1 und 56, 27. primarily to todos A co the statutory sited States oder eine tante altre in me CE 24 Store Se and local com how more foxon action in Other 123 Und 1990 1993 3152,37 TL 120 Santamaaling berisi The components of catered income tax experientowym is the same HON www.and we for the stars in the direct way with www deng AR th ble for 1 the Home of the three KPMG Peat Maurel LLP ho Notes (from 2 to 8) of HASBRO - Year 1996 & 1997 (2) Acquisitions On May 2. 1997. Hasbro purchased certains of Odd On Products, Inc., and Cap Toys, Inc., wholly owned subeldiaries of Russ Bertie and Company, Inc. The consideration for this purchase was $167.379. This acquisition accounted for using the purchase accounting method and based on estimates of fair value 563.582 has been allocated to net tangible assets, 576,700 to product rights and 547,097 to goodwill (3) Inventories Finished products Work in process Raw materials 1997 $158.215 12.200 32.279 22.702 209903 16,310 6.536 22320 (4) Property. Plant and Equipment 1996 Land and improvements Buildings and improvements Machinery and equipment Less accumulated depreciation Tools, dies and molds, net of amortization 1992 $ 13.257 181362 265.313 459572 219.105 200 39,737 $200.000 205.400 251499 77.50 215.172 2922 51 252 31354 Expenditures for maintenance and repaies which do not materially extend the life of the assets are changed to operations (5) Short-Term Borrowings Hasbro has available unsecured committed and uncommitted lines of credit from various bandes approximating 5550.000 and $750.000, respectively. Substantially all of the short-term borrowings outstanding at the end of 1997 and 1996 represent bank borrowing related to international units made under these lines of credit. The weighted average interest rates of the outstanding borrowings were 6.3% and 5.0%, respectively. Rasho's working capital needs were fulfilled by borrowing under these lines of credit and through the issuance of commercial paper, both of which were on terms and at interest rates generally extended to companies of comparable creditworthiness. Included as part of the committed line is 5440,000 available from a revolving credit agreement. This agreement contains certain restrictive covenants with which the Company is in compliance. Compensating balances and facility fees were not material. (6) Accrued Liabilities Royalties Advertising Payroll and management incentives 1997 restructuring anuals (note 131 Other 1997 $ 95.418 112.299 64,014 120,099 224.203 $596,633 1996 81053 3.91 32.678 202.220 399 RSD Comprehensive Questions On HABRO Annual Report Q1- During which year (1996 or 1997), the firm was doing well in terms of : 2-A/R : Account Receivables bTrade Payables (Account Payable) Inventories d- CCC. To do so, you may compute DSO, DPO & DIO (DOH) before Calculating the firm's CCC during the years 1996 & 1997 (See the formulas in the appendix). 02- Comment on the firm PREPAID EXPENSES between 1996 & 1997. 03- Does the firm Divest or Invest in PP&E (Plants, Properties & Equipement)? - Suuport your answer by using your own ratios. Q4-What is your take on the firm's strategy of Re-acquiring its common shares ? Compare the case the two years, 05- Is the firm kin to go for more or less short term debt? - Explain. Specifically, does the debt be used to finance the cash dividends or the treasury stocks? And in which proportion ? Is it appropriate for the firm to do so ? 06-Compute the following ratios : ROE, ROA, Operating Leverage (Gross Profit/EBIT), Interest Burden (EBT/EBIT), Debt-to-Assets Ratio (D/total Assets), Interest Coverage (EBIT / Interest). Financial Leverage (EBIT/EBT) and Total Leverage (Operating Leverage x Financial Leverage) Write your own interpretaion for each ratio (calulated for 1996 & 1997) using short paragraphs. Appendix Days of Sales Outstanding (DSO) (365/Receivables Turnover) Days of Inventory on Hand (DIO) (365/Inventory Turnover) Days of Payables Outstanding (DPO) (365/Payables Turnover Ratio) Cash Conversion Cycle (Days of inventory, DIO) + (Days of Sales Outstanding, DSO) - (Number of Days of Payables Outstanding. DPO) CONSOLIDATED BALANCE SHEETS 1997 1996 December 21, 2017 and December 23, 2016 (Thomade Damat Shan Duta Assets S 361,785 218 971 Current assets Cash and cash equivalents Accounts receivable less allowance for doubtful accounts of 551.700 in 1997 and $46.600 in 1996 Inventarios Prepaid expenses and other current 783.000 212.702 136,379 307,149 273.247 187.222 Total current assets 1,573,874 1.486.589 280.663 313545 Property, plant and equipment, net Other assets Cost in excess of acquired net assets, les accumulated amortization of $128.237 in 1997 and $115.312 in 1996 Other intangibles, loss accumulated mortization of $135.467 in 1997 and $102.387 in 1996 186502 460,457 78.798 79,940 364987 75,921 Other Total other assets 1.045.240 301 375 Total assets $2.199,717 2701509 Hasbro. Hasbro, Inc. (a syllabic abbreviation of its original name, Hassenfeld Brothers is an American multinational toy and board game company. Founders were: Hillel H., Henry H., Herman H.) It is the largest toy maker in the world in terms of stock market value, and third largest with revenues of approximately $5.12 billion CONSOLIDATED STATEMENTS OF EARNINGS 1996 1995 Hat Yair (The Dalet She Net revenues Cost of sales Gross profit 1907 5.5.5 13.05 3,062370 1.37 2.5210 1727 17 11013 SIE 36.912 418.54 617,140 0.004 3990234 41B 3421 304704 417.86 555 280 31.100 125.000 Expenses Amortation Movies, esant and devenit Advertising Solling dibution and distin estructuring charge and discontinued to prot Total Operating profit Nonoperating income) ponse Interest Other compon, net Total Earnings before income taxes 1.504393 235,00 1301200 3327 .222.22 31.450 27. 27.435 3.092 30.583 204525 (5.00 25374 30.93 252.55 90.97 Income taxes Net earnings 6553 134,30 101 190.012 Per common share ting De 105 1.02 15 Cashdviden det ] 12 (7) Long-Term Debt torte... Sit the comedian (a) Treme The -Incame the natitage tatian team 1888 nes Suite DE 41 Det Used Seo DU 22 000 w ES Certain tabeflected in the age of 2 56.739 in 1 und 56, 27. primarily to todos A co the statutory sited States oder eine tante altre in me CE 24 Store Se and local com how more foxon action in Other 123 Und 1990 1993 3152,37 TL 120 Santamaaling berisi The components of catered income tax experientowym is the same HON www.and we for the stars in the direct way with www deng AR th ble for 1 the Home of the three KPMG Peat Maurel LLP ho Notes (from 2 to 8) of HASBRO - Year 1996 & 1997 (2) Acquisitions On May 2. 1997. Hasbro purchased certains of Odd On Products, Inc., and Cap Toys, Inc., wholly owned subeldiaries of Russ Bertie and Company, Inc. The consideration for this purchase was $167.379. This acquisition accounted for using the purchase accounting method and based on estimates of fair value 563.582 has been allocated to net tangible assets, 576,700 to product rights and 547,097 to goodwill (3) Inventories Finished products Work in process Raw materials 1997 $158.215 12.200 32.279 22.702 209903 16,310 6.536 22320 (4) Property. Plant and Equipment 1996 Land and improvements Buildings and improvements Machinery and equipment Less accumulated depreciation Tools, dies and molds, net of amortization 1992 $ 13.257 181362 265.313 459572 219.105 200 39,737 $200.000 205.400 251499 77.50 215.172 2922 51 252 31354 Expenditures for maintenance and repaies which do not materially extend the life of the assets are changed to operations (5) Short-Term Borrowings Hasbro has available unsecured committed and uncommitted lines of credit from various bandes approximating 5550.000 and $750.000, respectively. Substantially all of the short-term borrowings outstanding at the end of 1997 and 1996 represent bank borrowing related to international units made under these lines of credit. The weighted average interest rates of the outstanding borrowings were 6.3% and 5.0%, respectively. Rasho's working capital needs were fulfilled by borrowing under these lines of credit and through the issuance of commercial paper, both of which were on terms and at interest rates generally extended to companies of comparable creditworthiness. Included as part of the committed line is 5440,000 available from a revolving credit agreement. This agreement contains certain restrictive covenants with which the Company is in compliance. Compensating balances and facility fees were not material. (6) Accrued Liabilities Royalties Advertising Payroll and management incentives 1997 restructuring anuals (note 131 Other 1997 $ 95.418 112.299 64,014 120,099 224.203 $596,633 1996 81053 3.91 32.678 202.220 399 RSD