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 $1,274,324 $1,252,608 Long-term debt 1,695,092 2,851,723 Other liabilities 539,086 469,669 Total liabilities $3,508,502 $4,574,000 Shareholders' equity: Common stock $104,847 $441,369 Additional paid in capital 1,275,059 1,812,682 Retained earnings 4,184,374 1,629,257 Accumulated other comprehensive loss and other equity items (294,514) (859,226) Treasury stock, at cost (3,515,280) (2,354,617) Total stockholders' equity $1,754,486 $669,465 Total liabilities and stockholders' equity $5,262,988 $5,243,465 The income from operations and interest expense from the income statement for each company were as follows (in thousands):
Hasbro Mattel Income (loss) from operations (before income tax expense) $270,402 $(419,261) Interest expense 90,826 181,886
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 _________ (Options are: Sound/Weak) margin of safety to creditors. Earnings for Hasbro is ________ to make interest payments.
(Options are: More than Enough/Not Enough)
***NEED ASAP Thanks!
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