Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Debt ratio, Ratio of Liabilities to Stockholders' Equity, and Times Interest Earned Hasbro (HAS) and Mattel, Inc. (MAT), are the two largest toy companies in
Debt ratio, Ratio of Liabilities to Stockholders' Equity, and Times Interest Earned Hasbro (HAS) and Mattel, Inc. (MAT), are the two largest toy companies in North America. Liability and stockholders' equity data from recent balance sheets are shown for each company as follows (in millions): Hasbro Mattel Current liabilities $ 1,257 $ 1,277 Long-term debt 4,663 3,557 Total liabilities $ 5,920 $ 4,834 Total stockholders' equity 2,996 492 Total liabilities and stockholders' equity $ 8,916 $ 5,326 The operating income and interest expense from the income statement for both companies were as follows (in millions): Hasbro Mattel Income (loss) from operations before tax $594 $(158) Interest expense 102 201 a. Determine the debt ratio for both companies. Round to one decimal place. Hasbro fill in the blank 1 % Mattel, Inc. fill in the blank 2 % b. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place. Hasbro fill in the blank 3 Mattel, Inc. fill in the blank 4 c. Determine the times interest earned for both companies. Round to one decimal place. If your answer amount is negative, please use the minus sign. Hasbro fill in the blank 5 Mattel, Inc. fill in the blank 6 d. What conclusions can be drawn from these data as to the ability of these two companies to meet their interest obligations
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started