Ratio of Liabilities to Stockholders' Equity and Times InterestEarned
Hasbro, Inc. and Mattel, Inc., are the two largest toy companiesin North America. Condensed liabilities and stockholders' equityfrom a recent balance sheet are shown for each company as follows(in thousands):
| Hasbro | Mattel |
| Liabilities: | | | | |
| Current liabilities | $2,742,000 | | $4,818,000 | |
| Long-term debt | 1,476,000 | | 1,912,000 | |
| Other liabilities | _ | | 918,000 | |
| Total liabilities | $4,218,000 | | $7,648,000 | |
| Shareholders' equity: | | | | |
| Common stock | $191,000 | | $860,000 | |
| Additional paid in capital | 591,000 | | 3,155,000 | |
| Retained earnings | 3,675,000 | | 3,251,000 | |
| Accumulated other comprehensive | | | | |
| income (loss) and other equity items | 42,000 | | (526,000) | |
| Treasury stock, atcost | (1,687,000) | | (1,960,000) | |
| Totalstockholders' equity | $2,812,000 | | $4,780,000 | |
| Total liabilities and stockholders'equity | $7,030,000 | | $12,428,000 | |
The income from operations and interest expense from the incomestatement for both companies were as follows (in thousands):
| Hasbro | Mattel |
| Income from operations (before income tax) | $977,220 | | $2,821,490 | |
| Interest expense | 80,100 | | 237,100 | |
a. Determine the ratio of liabilities tostockholders' equity for both companies. Round to one decimalplace.
b. Determine the times interest earned ratiofor both companies. Round to one decimal place.
