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Ratio of Liabilities to Stockholders' Equity and Number of Times Interest Charges are Earned Hasbro and Mattel, Inc., are the two largest toy companies in

Ratio of Liabilities to Stockholders' Equity and Number of Times Interest Charges are Earned

Hasbro 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
Current liabilities $960,435 $1,716,012
Long-term debt 1,396,421 1,100,000
Deferred liabilities 461,152 643,729
Total liabilities $2,818,008 $3,459,741
Shareholders' equity:
Common stock $104,847 $441,369
Additional paid in capital 655,943 1,727,682
Retained earnings 3,354,545 3,515,181
Accumulated other comprehensive loss and other equity items (72,307) (464,486)
Treasury stock, at cost (2,535,649) (2,152,702)
Total stockholders' equity $1,507,379 $3,067,044
Total liabilities and stockholders' equity $4,325,387 $6,526,785

The income from operations and interest expense from the income statement for each company were as follows (in thousands):

Hasbro Mattel
Income from operations (before income tax) $453,402 $945,045
Interest expense 117,403 88,835

a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place.

Hasbro Inc.
Mattel Inc.

b. Determine the number of times interest charges are earned for both companies. Round to one decimal place.

Hasbro Inc.
Mattel Inc.

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