Ratio of Liabilities to Stockholders\' Equity and Times Interest Earned Hasbro,

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 liabilities and stockholders’ equity from a recent balance sheet are shown for each company as follows (in thousands):

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

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

b. Determine the times interest earned ratio for both companies. Round to one decimal place.

Hasbro Mattel Liabilities:   Current liabilities $1,064,647 $1,645,572   Long-term debt 1,547,115 1,800,000   Other liabilities 404,883 473,863   Total liabilities $3,016,645 $3,919,435 Shareholders' equity: Common stock $104,847 $441,369 Additional paid in capital 893,630 1,789,870 Retained earnings 3,852,321 3,745,815 Accumulated other comprehensive loss and other equity items (146,001) (848,899) Treasury stock, at cost (3,040,895) (2,494,901)   Total stockholders' equity $1,663,902 $2,633,254   Total liabilities and stockholders' equity $4,680,547 $6,522,689

Explanation / Answer

a Hasbro Inc. 1.8 =3016645/1663902 Mattel Inc. 1.5 =3919435/2633254 b Hasbro Inc. 7.2 =(603915+97122)/97122 Mattel Inc. 6.4 =(463915+85270)/85270

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