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Hasbro, Inc., and Mattel, Inc., are the two largest toy companies in North America. Condensed liabilities and stockholders' equity from a recent balance sheet are
Hasbro, Inc., 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): Hasbro Mattel Liabilities: Current liabilities $3,840,000 $6,813,000 Long-term debt 2,067,200 2,704,000 Other liabilities 1,298,000 Total liabilities $5,907,200 $10,815,000 Shareholders' equity: Common stock $309,000 $1,391,000 Additional paid in capital 954,000 5,099,000 Retained earnings 5,939,000 5,252,000 Accumulated other comprehensive income (loss) and other equity items 68,000 (850,000) Treasury stock, at cost (2,726,000) (3,167,000) Total stockholders' equity ' $4,544,000 $7,725,000 Total liabilities and stockholders' equity $10,451,200 $18,540,000 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) $1,077,120 $2,782,990 Interest expense 112,200 335,300 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. Liabilities: Current liabilities $3,840,000 $6,813,000 Long-term debt 2,067,200 2,704,000 Other liabilities 1,298,000 Total liabilities $5,907,200 $10,815,000 Shareholders' equity: Common stock $309,000 $1,391,000 Additional paid in capital 5,099,000 954,000 5,939,000 Retained earnings 5,252,000 Accumulated other comprehensive income (loss) and other equity items 68,000 (850,000) Treasury stock, at cost (2,726,000) (3,167,000) Total stockholders' equity $4,544,000 $7,725,000 Total liabilities and stockholders' equity $10,451,200 $18,540,000 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) $1,077,120 $2,782,990 Interest expense 112,200 335,300 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 margin of safety to creditors. Earnings for both companies appear to make interest payments
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