Question
Ratio of Liabilities to Stockholders' Equity and Times Interest Earned Hasbro, Inc., and Mattel, Inc., are the two largest toy companies in North America. Condensed
Ratio of Liabilities to Stockholders' Equity and Times Interest Earned 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 $2,955,000 $5,312,000 Long-term debt 1,591,300 2,108,000 Other liabilities _ 1,011,200 Total liabilities $4,546,300 $8,431,200 Shareholders' equity: Common stock $281,000 $1,265,000 Additional paid in capital 868,000 4,637,000 Retained earnings 5,402,000 4,778,000 Accumulated other comprehensive income (loss) and other equity items 62,000 (773,000) Treasury stock, at cost (2,480,000) (2,881,000) Total stockholders' equity $4,133,000 $7,026,000 Total liabilities and stockholders' equity $8,679,300 $15,457,200 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) $751,680 $2,065,060 Interest expense 86,400 261,400 a. Determine the ratio of liabilities to stockholders' equity for both companies. Round your answers to one decimal place. Hasbro, Inc. fill in the blank 1 Mattel, Inc. fill in the blank 2 b. Determine the times interest earned ratio for both companies. Round your answers to one decimal place. Hasbro, Inc. fill in the blank 3 Mattel, Inc. fill in the blank 4 c. Hasbro, Inc. provides a slightly better margin of safety to creditors.
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