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 below (in millions): Hasbro Mattel Current liabilities $ 1,065 $ 1,646 Long-term debt 1,952 2,274 Total liabilities $ 3,017 $ 3,920 Total stockholders' equity 1,704 2,633 Total liabilities and stockholders' equity $ 4,721 $
(Answer to the second c)
Hasbro (HAS) and Mattel, Inc. (MAT), are the two largest toy companies in North America. Liability and
| Hasbro | Mattel | |||
| Current liabilities | $ 1,065 | $ 1,646 | ||
| Long-term debt | 1,952 | 2,274 | ||
| Total liabilities | $ 3,017 | $ 3,920 | ||
| Total stockholders' equity | 1,704 | 2,633 | ||
| Total liabilities and stockholders' equity | $ 4,721 | $ 6,553 |
The income from operations and interest expense from the income statement for both companies were as follows (in millions):
| Hasbro | Mattel | |||
| Income from operations before tax | $604 | $464 | ||
| Interest expense | 97 | 85 |
a. Determine the debt ratio for both companies. Round to one decimal place.
| Hasbro | ? % |
| Mattel, Inc. | ? % |
b. Determine the ratio of liabilities to stockholders’ equity for both companies. Round to one decimal place.
| Hasbro | ? |
| Mattel, Inc. | ? |
c. Determine the times interest earned for both companies. Round to one decimal place.
| Hasbro | ? |
| Mattel, Inc. | ? |
c. What conclusions can be drawn from these data as to the ability of these two companies to meet their interest obligations?
(earnings appear more than enough for both companies to make their required interest payments/earnings appear to insufficient for Hsbro to make it required interest payments/earings appear to insufficient for Mattel to make its required interst payments/earning for both companies are insufficient for them to make their required interest payments)
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