Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 14, Problem 14.14EX
a)
To determine
Financial Ratios: Financial ratios are the metrics used to evaluate the liquidity, capabilities, profitability, and overall performance of a company.
To compute: Ratio of liabilities to
Given info: Total liabilities and Stockholders’ equity
b)
To determine
To compute: Times interest earned ratio
Given info: Income before income tax and interest expense.
C)
To determine
To provide: Conclusion about company’s ability to meet its currently maturing debt.
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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):
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$2,788,000
$5,359,000
Long-term debt
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Shareholders' equity:
Common stock
$243,000
$1,094,000
Additional paid in capital
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4,010,000
Retained earnings
4,670,000
4,131,000
Accumulated other comprehensive
income (loss) and other equity items
54,000
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Treasury stock, at cost
(2,144,000)
(2,491,000)
Total stockholders' equity
$3,574,000
$6,076,000
Total liabilities and stockholders' equity
$7,862,800
$14,582,400
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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
$1,951,000
$3,482,000
Long-term debt
1,050,200
1,382,000
Other liabilities
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663,600
Total liabilities
$3,001,200
$5,527,600
Shareholders' equity:
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$170,000
$765,000
Additional paid in capital
525,000
2,806,000
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3,269,000
2,892,000
Accumulated other comprehensive
income (loss) and other equity items
38,000
(468,000)
Treasury stock, at cost
(1,501,000)
(1,743,000)
Total stockholders' equity
$2,501,000
$4,252,000
Total liabilities and stockholders' equity
$5,502,200
$9,779,600
The income…
Ratio of Liabilities to Stockholders' Equity and Times Interest Earned
Hasbro, Inc. (HAS), and Mattel, Inc. (MAT), 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
$1,617,859
$1,505,573
Long-term debt
1,588,067
2,580,439
Total liabilities
$3,205,926
$4,086,012
Total stockholders’ equity
$1,862,736
$2,407,782
Total liabilities and stockholders’ equity
$5,068,662
$6,493,794
The operating income and interest expense from the income statement for each company were as follows (in thousands):
Hasbro
Mattel
Operating income (before income tax expense)
$692,489
$409,472
Interest expense
97,405
95,118
a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place.
Hasbro Inc.
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Chapter 14 Solutions
Corporate Financial Accounting
Ch. 14 - Briefly explain the difference between liquidity,...Ch. 14 - What is the advantage of using comparative...Ch. 14 - Prob. 3DQCh. 14 - How would the current and quick ratios of a...Ch. 14 - Prob. 5DQCh. 14 - What do the following data, taken from a...Ch. 14 - A. How does the rate earned on total assets differ...Ch. 14 - Kroger, a grocery store, recently had a...Ch. 14 - Prob. 9DQCh. 14 - Prob. 10DQ
Ch. 14 - Horizontal analysis The comparative accounts...Ch. 14 - Vertical analysis Income statement information for...Ch. 14 - Current position analysis The following items are...Ch. 14 - Accounts receivable analysis A company reports the...Ch. 14 - Inventory analysis A company reports the...Ch. 14 - Prob. 14.6BECh. 14 - Prob. 14.7BECh. 14 - Asset turnover A company reports the following:...Ch. 14 - Prob. 14.9BECh. 14 - Common stockholders' profitability analysis A...Ch. 14 - Earnings per share and price-earnings ratio A...Ch. 14 - Vertical analysis of income statement Revenue and...Ch. 14 - Prob. 14.2EXCh. 14 - Common-sized income statement Revenue and expense...Ch. 14 - Vertical analysis of balance sheet Balance shed...Ch. 14 - Horizontal analysis of the income statement Income...Ch. 14 - Current position analysis The following data were...Ch. 14 - Prob. 14.7EXCh. 14 - Current position analysis The bond indenture for...Ch. 14 - Accounts receivable analysis The following data...Ch. 14 - Accounts receivable analysis Xavier Stores Company...Ch. 14 - Inventory analysis The following data were...Ch. 14 - Inventory analysis QT, Inc. and Elppa Computers,...Ch. 14 - Ratio of liabilities to stockholders' equity and...Ch. 14 - Prob. 14.14EXCh. 14 - Ratio of liabilities to stockholders' equity and...Ch. 14 - Prob. 14.16EXCh. 14 - Profitability ratios The following selected data...Ch. 14 - Profitability ratios Ralph Lauren Corporation...Ch. 14 - Six measures of solvency or profitability The...Ch. 14 - Five measures of solvency or profitability The...Ch. 14 - Earnings per share, price-earnings ratio, dividend...Ch. 14 - Prob. 14.22EXCh. 14 - Earnings per share, discontinued operations The...Ch. 14 - Prob. 14.24EXCh. 14 - Unusual items Explain whether Colston Company...Ch. 14 - Comprehensive Income Anson Industries, Inc....Ch. 14 - Horizontal analysis of income statement For 20V2,...Ch. 14 - Prob. 14.2APRCh. 14 - Prob. 14.3APRCh. 14 - Measures of liquidity, solvency, and profitability...Ch. 14 - Solvency and profitability trend analysis Addai...Ch. 14 - Horizontal analysis of income statement For 20Y2,...Ch. 14 - Prob. 14.2BPRCh. 14 - Effect of transactions on current position...Ch. 14 - Measures of liquidity, solvency and profitability...Ch. 14 - Solvency and profitability trend analysis Crosby...Ch. 14 - Financial Statement Analysis The financial...Ch. 14 - Prob. 14.1ADMCh. 14 - Deere: Profitability analysis Deere Company...Ch. 14 - Marriott and Hyatt: Solvency and profitability...Ch. 14 - Prob. 14.1TIFCh. 14 - Prob. 14.3TIF
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