Question

Compare the 2019 Days on Hand results for Hasbro and Mattel Armour.

Write an executive summary (use the model provided) detailing the daily Cost of Goods Sold, respective days of inventory for 2019 and the potential financial impact if the under-performing company could match the Days on Hand measure of the higher-performing company (by improving processes so that they would require less inventory to operate). Assume a 25% carrying cost ratio.

Answer 1

		Hasbro	Mattel
a.	Debt Ratio :-
a.	Total liabilities		$                           3,017		$          3,920
b.	Total assets		$                           4,721		$          6,553
	Ratio (a/b)		63.9%		59.8%
b.	Ratio of liabilities to stockholders' equity:-
a.	Total liabilities		$                           3,017		$          3,920
b.	Stockholders' equity		$                           1,704		$          2,633
	Ratio (a/b)		1.8	times	1.5	times
c	Times interest earned:-
a.	Income from operations before tax		$                              604		$             464
b.	Interest Expense		$                                97		$               85
	Ratio (a/b)		6.2	times	5.5	times
	Because the Times interest earned ratio is very good for both companies.