Financial & Managerial Accounting
Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
Question
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Chapter 15, Problem 15.14EX

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 stockholders’ equity

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. (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.   Mattel Inc.…
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 _   663,600       Total liabilities $3,001,200   $5,527,600     Shareholders' equity:             Common stock $170,000   $765,000       Additional paid in capital 525,000   2,806,000       Retained earnings 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. 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 $2,788,000   $5,359,000     Long-term debt 1,500,800   2,127,000     Other liabilities _   1,020,400       Total liabilities $4,288,800   $8,506,400     Shareholders' equity:             Common stock $243,000   $1,094,000       Additional paid in capital 751,000   4,010,000       Retained earnings 4,670,000   4,131,000       Accumulated other comprehensive             income (loss) and other equity items 54,000   (668,000)       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   The…

Chapter 15 Solutions

Financial & Managerial Accounting

Ch. 15 - Prob. 15.1APECh. 15 - Prob. 15.1BPECh. 15 - Prob. 15.2APECh. 15 - Vertical analysis Income statement information for...Ch. 15 - Prob. 15.3APECh. 15 - Prob. 15.3BPECh. 15 - Accounts receivable analysis A company reports the...Ch. 15 - Accounts receivable analysis A company reports the...Ch. 15 - Prob. 15.5APECh. 15 - Inventory analysis A company reports the...Ch. 15 - Prob. 15.6APECh. 15 - Long-term solvency analysis The following...Ch. 15 - Prob. 15.7APECh. 15 - Times interest earned A company reports the...Ch. 15 - Prob. 15.8APECh. 15 - Prob. 15.8BPECh. 15 - Prob. 15.9APECh. 15 - Prob. 15.9BPECh. 15 - Prob. 15.10APECh. 15 - Common stockholders' profitability analysis A...Ch. 15 - Prob. 15.11APECh. 15 - Earnings per share and price-earnings ratio A...Ch. 15 - Prob. 15.1EXCh. 15 - Vertical analysis of income statement The...Ch. 15 - Common-sized income statement Revenue and expense...Ch. 15 - Vertical analysis of balance sheet Balance sheet...Ch. 15 - Prob. 15.5EXCh. 15 - Current position analysis The following data were...Ch. 15 - Prob. 15.7EXCh. 15 - Prob. 15.8EXCh. 15 - Prob. 15.9EXCh. 15 - Prob. 15.10EXCh. 15 - Inventory analysis The following data were...Ch. 15 - Inventory analysis Dell Inc. and Hewlett-Packard...Ch. 15 - Prob. 15.13EXCh. 15 - Prob. 15.14EXCh. 15 - Prob. 15.15EXCh. 15 - Prob. 15.16EXCh. 15 - Profitability ratios The following selected data...Ch. 15 - Profitability ratios Ralph Lauren Corporation...Ch. 15 - Six measures of solvency or profitability The...Ch. 15 - Five measures of solvency or profitability The...Ch. 15 - Prob. 15.21EXCh. 15 - Prob. 15.22EXCh. 15 - Prob. 15.23EXCh. 15 - Prob. 15.24EXCh. 15 - Prob. 15.25EXCh. 15 - Prob. 15.26EXCh. 15 - Horizontal analysis of income statement For 2016,...Ch. 15 - Prob. 15.2APRCh. 15 - Prob. 15.3APRCh. 15 - Nineteen measures of solvency and profitability...Ch. 15 - Solvency and profitability trend analysis Addai...Ch. 15 - Prob. 15.1BPRCh. 15 - Prob. 15.2BPRCh. 15 - Effect of transactions on current position...Ch. 15 - Nineteen measures of solvency and profitability...Ch. 15 - Prob. 15.5BPRCh. 15 - Financial Statement Analysis The financial...Ch. 15 - Prob. 15.1CPCh. 15 - Prob. 15.2CPCh. 15 - Prob. 15.3CPCh. 15 - Prob. 15.4CPCh. 15 - Prob. 15.5CP
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