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Ontrac Financial Consulting, LLC

FINANCIAL STATEMENT ANALYSIS


William Douglas, Thomas Dixon, & Jessy Robinson
Brent Andrus, Advisor
February 21st, 2014

Ontrac Financial Consulting, LLC


Table of Contents
Executive Summary.................................................................................................... 3
Horizontal Analysis..................................................................................................... 4
Revenues...........................................................................................
Gross Profit.........................................................................................
Net Income.........................................................................................
Income from Continuing Operations..................................................
Net Cash from Continuing Operations................................................
Total Assets........................................................................................
Vertical Analysis......................................................................................................... 6
Income Statement Analysis...........................................................................6
Product Cost Control..........................................................................
Operational Cost Control....................................................................
Debt Payment....................................................................................
Tax Burden.........................................................................................
Net Income.........................................................................................
Balance Sheet................................................................................................ 8
Current Assets....................................................................................
Property, Plant, and Equipment.........................................................
All Other Assets..................................................................................
Current Liabilities...............................................................................
Total Liabilities...................................................................................
Total Stockholders Equity................................................................
Ratio Analysis........................................................................................................... 10
Liquidity Ratio..................................................................................
Efficiency Ratio................................................................................
Solvency Ratio.................................................................................
Profitability Ratio..............................................................................
Valuation Ratio.................................................................................
Conclusions and Recommendations.........................................................................14
Public Perception...................................................................................................... 15
Appendix A: Horizontal Analysis
Appendix B: Vertical Analysis - Income Statement
Appendix C: Vertical Analysis - Balance Sheet
Appendix D: Ratio Analysis - Hasbro
Appendix E: Ratio Analysis - Mattel
Appendix F: Analyst Recommendations
Appendix G: Stock Performance
Appendix H: References

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Executive Summary
Hasbro, Inc. (Hasbro) and Mattel, Inc. (Mattel) are involved in the Toys
and Games Industry. The Mattel family is comprised of such best-selling brands as
Barbie, Hot Wheels, Monster High, American Girl, Thomas & Friends, Fisher-Price
brands, including, Little People, Power Wheels, as well as a wide array of
entertainment-inspired toy lines. Hasbro is well known for Transformers, Monopoly,
Play-Doh, My Little Pony, Magic: The Gathering, Nerf and Littlest Pet Shop. They also
spend time and money in television programming, motion pictures, digital gaming
and a comprehensive licensing program.

Hasbro

Mattel

Official Corporate Name

Hasbro, Inc.

Mattel, Inc.

Corporate Headquarters

Pawtucket, Rhode Island, US

Main Outsource Country

China

Year of Incorporation

1923 (as Hassenfeld


Brothers) & 1968 (as Hasbro)

El Segundo,
California, US
China
1945

Company Homepage

Hasbro.com

Mattel.com

Stock Symbol

HAS

MAT

Fiscal Year End

December 30, 2012

December 31, 2012

10-K Filing Date

February 27, 2012

February 26, 2012

Independent Auditor

KPMG, LLP

Primary Products/Services

Toys, Games, Media, and


Entertainment

Pricewaterhouse,
LLP
Toys and Games

Hasbros reliance on licensed and marketed properties put it in a precarious place,


with sales figures that go up and down rapidly. While there is some steadiness in
the form of its game line, over the past couple of years, Hasbro has seen a drop in

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sales as tastes change, and their licensed properties fade away over time.
Furthermore, Hasbro has been engaging in cutting costs, including reducing the
work force. On a positive note, Hasbro has been controlling their debt well.
Mattel, on the other hand, has been relying more on their familiar properties.
While it is a risk in the highly volatile toy market, it has allowed Mattel to grow more
steadily than Hasbro. As a result, they have seen greater profits than Hasbro by
increasing efficiency as opposed to reducing headcount. In terms of raw dollars
Mattel has far more debt than Hasbro, though in terms of a percentage of assets,
Mattel is in a stronger position.

Horizontal Analysis
Revenues
Between 2010 and 2011 Hasbros revenue grew by about 7% then fell by
roughly 5% between 2011 and 2012. Hasbro has a strong reliance on licenses and
media advertising to sell their brands, and thus, are subject to large fluctuations of
sales from year to year. In 2011, sales from their Marvel line, Magic: The Gathering,
Battleship, and Twister were up, but they were offset by decreased revenue from
other brands. Of note, their girl products were up 7% due to the introduction of
Furby and One Direction brands, as well as increased revenue from My Little Pony.
Mattel increased their revenue by 7% from 2010 to 2011, and then by about 2%
from 2011 to 2012. This was fueled primarily by increased sales of Monster High
and Fisher-Price Friends. It was offset by lower sales of their CARS 2 and Barbie
products. All other brands remained primarily flat.

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Gross Profit
Hasbros gross profit increased by 6% from 2010 to 2011, but then fell by 1%
from 2011 to 2012. There has been a focus to increase cost controls for the cost of
goods. First, there were costs for laying off employees in an effort to reduce
headcount, and there is a cost savings initiative ongoing to increase efficiency, and
the other reason for Hasbros decreased costs can be found in the lower inventory
obsolescence costs in 2012 as opposed to 2010 and 2011. However, none of the
above cost cutting measures could counter Hasbros decreased sales.
Mattels gross profit increased by 6% from 2010 to 2011, and 8% from 2011
to 2012. The prime reason is the continuing efforts by Mattel to decrease costs, but
Mattel also attributes the increasing gross profits to a favorable product mix,
manufacturing efficiencies, licensing, and price increases to offset higher input costs
and customer benefits.

Net Income
Hasbros net income fell by $49.3 million in 2012, added to the $12.4 million
decrease in 2011, mainly as a result of the decrease in sales. In contrast, Mattels
net income grew by $83.6 million in 2011, but only $8.0 million in 2012, despite the
high growth in Gross Profit. The main reason for the decrease in growth of net
income in 2011 is an increased effective tax rate of about 22% to 23%, depending
on jurisdiction, and an unfavorable foreign exchange rate.

Income from Continuing Operations


Hasbros income from continuing operations fell from a 1% gain in 2011 to a
7% loss in 2012, primarily caused by decreased sales. Mattel also fell from a 15%

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gain in 2011 to a 2% loss, primarily caused by relatively flat sales in 2012, and an
unfavorable foreign exchange rate.

Net Cash from Continuing Operations


Hasbros net cash increased $28.1 million in 2011, and by $138.7 million in
2012. In 2010, Hasbro increased their inventory by about $151.6 million, which was
then sold off in 2011 as receivables, which were then paid off in 2012. Mattel had a
similar story in that they increased their net cash by $136.7 million in 2011, and by
$610.9 million in 2012, accounting for a 92% increase in net cash provided by
operations. Similar to Hasbro, this can be found with an increase in accounts
receivable in 2010 and 2011, and were paid in 2012. Net cash also increased by tax
benefits in 2012, and deferred income taxes.

Total Assets
Hasbros total assets increased by 5% between 2010 and 2011, and this is
mainly due to Hasbro getting a new Gaming Center of Excellence which provided
a boost to the total assets. Mattels total assets increased by 4.6% in 2010 and by
15.1% in 2011. In 2011, Mattel acquired HIT Entertainment, which added to their
assets as well as to their costs.

Vertical Analysis
INCOME STATEMENT ANALYSIS
Product Cost Control
Both companies have a relatively high cost of sales, 41% for Hasbro and 47%
for Mattel, but it has been decreasing in recent years. For Hasbro, the cost of sales
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has been going down due to an increase of sales of Magic: The Gathering and other
game lines. The game lines have a higher contribution margin, and thus a lower
cost of sales compared to their toy lines. Mattels cost of sales was reduced from
49.6% to 46.8% through a reduction shipping costs and product production costs.
Mattel has been focusing on increasing efficiency through their Operational
Excellence 2.0 programs.

Operational Cost Control


Both companies have held fairly steady over the past two years in operating
expenses, with only about 1-2% variation year to year in each category. Mattel
maintains a lower operational cost at 37.1% of revenues compared to 45% of
revenue with Hasbro. This is due to Hasbro having a much higher royalty costs than
Mattel. With licensed toys, such as the Marvel line, doing substantially well which
increases the royalty costs. Mattel, on the other hand, has reported that a
significant driver of administrative expenses was the acquisition of HIT
Entertainment, including maintaining the administrative costs that were ongoing
during the acquisition.

Debt Payment
Interest payments for Hasbro were slightly higher in 2012, because of an extra week
in 2012, which was a 53-week year, and had an above average increase in shortterm borrowings. In March 2010, Hasbro took out a 500 million dollar long-term
debt with an interest rate of 6.35%, which was used to pay for the Hasbros
Gaming Center of Excellence building.

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Mattel issued 500 million dollars of senior notes in September 2010, and an
additional 600 million dollars of senior notes in November 2011, and these two
notes represented a large share of the interest expense. This was offset, however,
by 250 million dollars that matured in 2011, and there was lower than average
interest rates.

Tax Burden
Both companies incurred a similar tax burden between Hasbros 2.87% of
Revenues and Mattels 2.63% of Revenues, and both companies have been facing a
relatively high tax burden. This is due to the increasingly global nature of the toy
industry, and complying with tax laws of various jurisdictions. Of note, Hasbro is
facing litigation in Mexico over tax assessments for taxes due in 2000-2005 and
2007. However, the company expects to succeed in these proceedings, and outside
of posting a bond, there are no further expenses listed. Mattel, on the other hand,
got some tax relief and received 16 million dollars of tax benefits, mainly from
reassessments of previous tax years based on audits and tax filings. Further tax
credits net Mattel 59.1 million dollars reflected in the provision for income tax in the
income statement.

Net Income
Net income from Hasbro was 8.22% of revenues, reflecting a decrease of
sales, the expense of opening a new building, and tax liabilities from posting a bond
in Mexico, which was listed as a tax expense. Net income for Mattel was 12.09% of
revenues, due to steady sales, and a focus on reducing costs of sales.

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BALANCE SHEET
Current Assets
Hasbro is more liquid than Mattel, with 57.99% of total assets compared to
54.50%, respectively. One thing of note is that Hasbro has more in proportional
receivables than Mattel, who has a bit more cash than receivables, indicating that
Mattel is doing a better job of collecting receivables from their customers than
Hasbro.

Property, Plant, and Equipment


Mattel has more in terms of property, plant, and equipment than Hasbro as a
percentage of total assets. This is due to Hasbro dealing in goods that require less
manufacturing, such as the Magic: The Gathering card game. The only expansion
that Hasbro made in the past few years is in the Hasbro Gaming Center of
Excellence. On the other hand, in 2011, Mattel acquired HIT Entertainment, which
provided a major boost to Mattels fixed assets.

All Other Assets


Other Assets for Hasbro are high, representing 36.69% of total assets. This is
made mostly of trademarks, licenses, goodwill, and other intangible assets, with
Hasbro having a bit more diversity in terms of product lines. Mattel has 19.86% of
total assets represented by other assets. While Mattel has no less intangible assets,
they have less licenses, and more original property, which is subject to
amortization. Since these properties (Barbie, Hot Wheels, etc.) have been around
for a good 20 to 30 years, the value of these properties would be affected heavily
by amortization.
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Current Liabilities
Both companies have relatively the same amount of current liabilities
compared to total assets, with Hasbro at 22.20% and Mattel at 26.20%. Of note,
Hasbro has a $175 million bond posted for ongoing tax litigation in Mexico, and
Mattel has $371 million set as a potential litigation bond for an ongoing legal issue
still in appeal.

Total Liabilities
Hasbro has more total debt than Mattel as a percentage of total assets, with
65.15% compared to 53.01%, respectively. Hasbro has taken out a bit more long
term debt than Mattel, with Mattel only taking out $1.1 billion in 2010 and 2011 in
total, but Hasbro has taken out $1.39 billion, with $436 million due in 2014. Mattel,
while having a greater debt load in terms of raw dollars, still has less than Hasbro in
terms of a percentage of total assets. This translates into having more money
available for stockholders, and greater general stability for the company.

Total Stockholders Equity


Hasbro has less equity as compared to liabilities in terms of total assets, with
$436 million due in 2014. This indicates that, in the long run, more money will be
used to pay debts than to give as a dividend. However, looking past those
numbers, the amount of money paid out by Hasbro to stockholders compared to
Mattel indicates that the company is doing better than what appears here.

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Ratio Analysis
Liquidity Ratio
Liquidity ratios, as a whole, measure a companys ability to generate funds
quickly to pay off short-term obligations. The main users of these ratios are
creditors and vendors.
Liquidity Ratios

Hasbr

Mattel

o
Current Ratio
Quick Ratio

2.61

2.07

2.28

1.79

.89

.93

Current
Cash/Debt

Both Hasbro and Mattel have a strong current ratio as well as a fairly healthy
quick ratio. Though Mattels 1.79 quick ratio is decent, it does not compare to
Hasbros 2.28 ratio. Based on these ratios, Hasbro is in a much stronger position
than Mattel. For every dollar in current liabilities, Hasbro has $.54 more in current
assets than Mattel. They also have $.49 more in their most liquid assets than Mattel.

Efficiency Ratio
Receivable Turnover ratio measures how often a company collects cash from
credit sales during a given year. Inventory Turnover measures how often a company
sells their inventory during a given year. A companys Asset Turnover ratio shows
how much revenue there is for every dollar a company has in assets. These ratios
together measure how efficient a company is on using their assets to generate

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revenue and grow the company. Shareholders often use these ratios to measure
how well Management is performing.
Efficiency Ratio
Receivable
Turnover
Asset Turnover
Inventory

Hasbro

Mattel

3.96

5.19

.97

1.05

5.14

6.18

Turnover

Hasbro and Mattel are almost equal when comparing their respective revenue
to their assets. Despite both companies being close in Asset Turnover, Mattel out
matches Hasbro in each ratio. Mattel collects cash from credit sales a little over five
times a year or nearly one and a quarter more often than Hasbro. Mattels Inventory
Turnover ratio is 6.18, showing us that Mattel will sell and replace their inventory
roughly six times during the year.

Solvency Ratio
Solvency ratios measure the risk and strength of a business. The debt to
equity ratio measures specifically the financial leverage of a company. This indicates
the proportion of debt and equity being used to finance a companys assets. The
times interest earned ratio is a metric used to measure the ability of a company to
meet its financial obligations. The cash to debt ratio is used to indicate a
companys ability to cover its total debt with the cash flow from operations during
the year. Creditors use these ratios to measure how well a company manages its
debt. Investors use these ratios to know where the company stands financially.

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Solvency Ratio
Debt to Equity
Times Interest
Earned
Cash/Debt

Hasbro
1.87
4.97

Mattel
1.13
11.49

.3

.37

Coverage

Hasbros high debt to equity ratio, compared with Mattel, though, not a
terrible ratio, could spell trouble for investors due to the lack of increased revenue
between 2011 and 2012. Mattel, on the other hand, has a relatively high times
interest earned. This could indicate that Mattel has an undesirable lack of debt or is
paying too much down with earnings that could otherwise be spent on other
projects to help generate revenue and grow the company. Despite this ratio, Mattel
is in a stronger overall position.

Profitability Ratio
Gross margin helps measure how the cost of goods are being managed,
where as profit margin measures how much, for every dollar there is in revenues,
does the company actually keep as earnings. Return on Assets indicates how
efficient management is at using its assets to generate a profit. Return on equity
demonstrates how profitable a company is with the amount investors are putting
into the business. Investors will use these ratios to help determine how profitable a
company is.

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Profitability

Hasbro

Mattel

Ratios
Gross Margin
Profit Margin
Return on

59.84%
8.22%
7.95%

53.10%
12.09%
12.73%

Assets
Return on

22.98%

27.35%

Equity

Mattel has a higher profit margin than Hasbro, despite Hasbros gross margin.
Mattel seems to use their assets more efficiently to generate revenue and increase
profitability. Hasbro though manages its cost of goods effectively, still lacks in
comparison to Mattels profitability ratios.

Valuation Ratio
Valuation ratios are used by investors to compare the overall position of a
company compared to other companies for investment decisions. The priceearnings ratio measures how much an investor is willing to pay per dollar of
earnings. It also measures future anticipated growth. The payout ratio indicates the
amount of earnings paid to investors through dividends.
Valuation

Hasbro

Mattel

Ratios
P/E Ratio
Payout Ratio

13.97
.9

15.93
.55

Hasbro has a fairly high payout ratio, indicating that they attract investors
through means of dividends being paid out, where as Mattel has a somewhat lower
payout ratio which may indicate that they are keeping some of their earnings for
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other uses such as investments in other projects to develop and grow. Mattel has a
relatively high P/E ratio compared to Hasbro, which may indicate that they are
expecting future continued growth.

Conclusions and Recommendations


The toy industry is a risky industry, and subject to a quick change of taste. In
order to do well in this industry, each company needs to use its resources wisely,
and be able to predict where trends are going, and act accordingly. Further, toy
lines tend to have relative short lives, and what may be popular and well-selling one
year may lose popularity the next.
Hasbro has been relying heavily on licensed properties and a strong media
presence to sell toys. Nearly all of their lines rely on television shows, movies, and
other media to sell to kids. Unfortunately, this leads to instability in selling their toy
lines consistently over time. Hasbro does give more from their net income, and for
a medium term investor looking for a consistent dividend payout; Hasbro is a better
investment than Mattel. Hasbro also has done a great job of handling their debt,
having high current and quick ratios. Further, it appears that their debt load in
relation to their assets is relatively lower. As a creditor, we would suggest giving a
loan to Hasbro if they need it. Hasbro has been cutting overhead by reducing head
count. Further, lower turnover ratios indicate that the management does not do as
good of a job at managing assets compared to Mattel, and it may lead to situation
where an employee working for Hasbro one year may lose his job in the next. Thus,
we would not recommend working for Hasbro.

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Mattel relies on more proven brands, and doesnt have quite as strong as
media presence as Hasbro. But, despite all of this, they do relatively well over the
years, and have a steady rate of growth. However, Mattel doesnt pay as much as
Hasbro, and for an investor looking for a dividend payout, Mattel wouldnt be
recommended. On the other hand, if an investor were looking for a steady growth
over the long term, Mattel would be recommended over Hasbro. Mattel has a
smaller debt load in terms of assets than Hasbro, and they have fewer current
assets to pay debts than Hasbro. Mattel does have a high times interest earned
ratio indicating that they can handle more debt. As a creditor, I would recommend
extending credit for long-term debt. Finally, with looking at how well Mattel
manages its assets, and reports of Mattel being one of the top places to work, we
would recommend working for Mattel.

Public Perception
In the past year since they last filed their 10-K, Mattel has been doing well.
Mattel has been listed as one of the top 100 companies by Fortune magazine. They
noted that Mattel had 1,292 job openings in the year, but had 164,045 applicants to
those jobs. Also of note is that more than 1,000 employees at Mattel have been
there for over 15 years, indicating employee satisfaction. Mattel has been paying
their dividends on time, and they face no new litigation. The only black spot for
Mattel, though, is that they had a lower than expected showing in last quarter of
2013, causing their stock prices to drop.
Hasbro, on the other hand, has been facing a number of criticisms for a lack
of gender diversity in their toys. For example, one woman claimed that there is a
lack of boys in the packaging for Hasbros Easy Bake Oven, reinforcing the
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stereotype that women cook, men work. Hasbro is continuing to face workforce
issues, with one recent example of a Rhode Island tax credit that was given to
Hasbro on the expectation that Hasbro would create 245 new jobs. Hasbro, instead,
laid off more than 125 workers in that state, with further layoffs in 2013 of more
than 10% of the salaried staff in North America. The bright spot to Hasbro has been
in the recent holiday quarter of 2013, where Hasbro did better than market
estimates.

Appendix A: Horizontal Analysis


Hasbro
Revenues
Gross Profit
Net Income
Income from
Continuing Ops
Net Cash from
Continuing Ops
Total Assets

2012
$4,088,9
83
$2,417,0
03
$335,99
9
$551,78
5
$534,79
6
$4,325,3
87

Chan
ge
4.59%
1.32%
12.81
%
7.10%
35.03
%
4.71%

2011
$4,285,5
89
$2,449,3
26
$385,36
7
$593,98
1
$396,06
9
$4,130,7
74

Chan
ge
7.08
%
5.93
%
3.11
%
1.04
%
7.63
%
0.92
%

2010
$4,002,16
1
$2,312,10
4
$397,752
$587,859
$367,981
$4,093,22
6

*Amounts expressed in thousands of dollars

Mattel
Revenues
Gross Profit
Net Income
Income from Continuing
Ops
Net Cash from
Continuing Ops
Total Assets

2012
$6,420,8
81
$3,409,1
97
$776,464
$1,021,0
15
$1,275,6
50
$6,526,7
85

Chan
ge
2.47%
8.37%
1.04%
1.93%
91.92
%
15.08
%

2011
$6,266,0
37
$3,145,8
26
$768,508
$1,041,1
01
$664,693
$5,671,6
38

Chan
ge
7.00%
6.46%
12.21
%
15.43
%
25.90
%
4.69%

2010
$5,856,1
95
$2,954,9
73
$684,863
$901,902
$527,970
$5,417,7
33
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*Amounts expressed in thousands of dollars

Appendix B: Vertical Analysis - Income


Statement
Hasbro

Year 2012

As a
percentage
of Revenue

Revenues
COGS
Operating
Expense
Interest
Expense
Tax Expense
Net Income

$4,088,983
$1,671,980
$1,865,218

100.00%
40.89%
45.62%

$91,141

2.23%

$117,403
$335,999

2.87%
8.22%

*Amounts expressed in thousands of dollars

Mattel

Year 2012

As a
percentag
e of
Revenue

Revenues
COGS
Operating
Expense
Interest
Expense
Tax Expense
Net Income

$6,420,881
$3,011,684
$2,388,182

100.00%
46.90%
37.19%

$88,835

1.38%

$168,581
$776,464

2.63%
12.09%

*Amounts expressed in thousands of dollars

Appendix C: Vertical Analysis - Balance Sheet


Hasbro

Year
2012

As a
percentag
e of Total
Assets

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Current Assets
PPE
Other Assets
Total Assets
Current Liabilities
Total Liabilities
Total Stockholder's
Equity

$2,508,
202
$230,41
4
$1,586,
771
$4,325,
387
$960,43
5
$2,818,
008
$1,507,
379

57.99%
5.33%
36.69%
100.00%
22.20%
65.15%
34.85%

*Amounts expressed in thousands of dollars

Mattel

Year
2012

As a
percentage
of Assets

Current Assets

$3,556,8
05
$593,21
3
$1,295,9
69
$6,526,7
85
$1,716,0
12
$3,459,7
41
$3,067,0
44

54.50%

PPE
Other Assets
Total Assets
Current Liabilities
Total Liabilities
Total Stockholder's
Equity

9.09%
19.86%
100.00%
26.29%
53.01%
46.99%

*Amounts expressed in thousands of dollars

Appendix D: Ratio Analysis - Hasbro


Hasbro

Year 2012

Liquidity Ratios
Current Assets

$2,508,202
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Current Liabilities

Current Ratio
Current Assets
- Inventory
Current Liabilities

Quick Ratio
Net Cash from Operating
Activities
Average Current Liabilities

Current Cash / Debt


Coverage

$960,435

2.61
$2,508,202
$316,049
$960,435

2.28
$849,701
($960,435+
$942,344)/2

0.89

*Figures used in calculating ratios are expressed in thousands of dollars

Activity or Efficiency Ratios


Revenue
Average Accounts
Receivable

Receivable Turnover
Revenue
Average Total Assets

$4,088,983
($1,029,959+
$1,034,580)/2

3.96
$4,088,983
($4,325,387+
$4,130,774)/2

Asset Turnover

0.97

COGS
Average Inventory

$1,671,980
($342,965+
$325,021)/2

Inventory Turnover

5.14

*Figures used in calculating ratios are expressed in thousands of dollars

Solvency or Financial Strength Ratios


Total Debt
Total Equity

Debt/Equity

$2,818,008
$1,507,379

1.87

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EBIT
Interest Expense, net

$453,402
$91,141

Times Interest Earned

4.97

Net Cash from Operating


Activities
Total Liabilities

$2,818,008

Cash/Debt Coverage

0.30

$849,701

*Figures used in calculating ratios are expressed in thousands of dollars

Profitability Ratios
Gross Profit
Net Sales

Gross Margin
Net Income
Net Sales

Profit Margin
Net Income
Weighted Avg. Common
Shares Outstanding

Earnings Per Share


(EPS)

$2,447,003
$4,088,983

59.84%
$335,999
$4,088,983

8.22%
$335,999
209,694

2.58

Net Income
Average Total Assets

$335,999
($4,325,387+
$4,130,774)/2

Return on Assets

7.95%

Net Income
Average Stockholders'
Equity

Return on Equity

$335,999
($1,507,379+
$1,417,515)/2

22.98%

*Figures used in calculating ratios are expressed in thousands of dollars

Market or Valuation Ratios


Closing Stock Price, Year

$36.04
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End
EPS

2.58

Price/Earnings Ratio

13.97

Cash Dividends
Net Income

$1.44*209,694
$335,999

Payout Ratio

0.90

*Figures used in calculating ratios are expressed in thousands of dollars, EXCEPT for
'Stock Price' & EPS

Appendix E: Ratio Analysis - Mattel


Mattel

Year 2012

Liquidity Ratios
Current Assets
Current Liabilities

Current Ratio
Current Assets
- Inventory
Current Liabilities

Quick Ratio
Net Cash from Operating
Activities
Average Current Liabilities

Current Cash / Debt


Coverage

$3,556,805
$1,716,012

2.07
$3,556,805
$487,000
$1,716,012

1.79
$1,275,650
($1,716,012+
$1,038,928)/2

0.93

*Figures used in calculating ratios are expressed in thousands of dollars

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Activity or Efficiency Ratios
Revenue
Average Accounts
Receivable

Receivable Turnover
Revenue
Average Total Assets

$6,420,881
($1,226,833+
$1,246,687)/2

5.19
$6,420,881
($6,526,785+
$5,671,638)/2

Asset Turnover

1.05

COGS
Average Inventory

$3,011,684
($487,000+
$487,000)/2

Inventory Turnover

6.18

*Figures used in calculating ratios are expressed in thousands of dollars

Solvency or Financial Strength Ratios


Total Debt
Total Equity

Debt/Equity
EBIT
Interest Expense, net

Times Interest Earned


Net Cash from Operating
Activities
Total Liabilities

Cash/Debt Coverage

$3,459,741
$3,067,044

1.13
$1,021,015
$88,835

11.49
$1,275,650
$3,459,741

0.37

*Figures used in calculating ratios are expressed in thousands of dollars

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Profitability Ratios
Gross Profit
Net Sales

Gross Margin
Net Income
Net Sales

$3,409,197
$6,420,881

53.10%
$776,464
$6,420,881

Profit Margin

12.09%

Net Income
Weighted Avg. Common
Shares Outstanding

$776,464

Earnings Per Share


(EPS)

342,269

2.25

Net Income
Average Total Assets

$776,464
($6,526,785+
$5,671,638)/2

Return on Assets

12.73%

Net Income
Average Stockholders'
Equity

Return on Equity

$776,464
($3,067,044+
$2,610,603)/2

27.35%

*Figures used in calculating ratios are expressed in thousands of dollars

Market or Valuation Ratios


Closing Stock Price, Year
End
EPS

Price/Earnings Ratio

$35.84
2.25

15.93

Cash Dividends
Net Income

$1.24*342,269
$776,464

Payout Ratio

0.55

*Figures used in calculating ratios are expressed in thousands of dollars, EXCEPT for
'Stock Price' & EPS

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Appendix F: Analyst Recommendations


Hasbro (HAS)

Current
Year

*Analyst recommendations current as of February 21, 2014

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Mattel (MAT)

Year 2012

*Analyst recommendations current as of February 21, 2014

Appendix G: Stock Performance


Hasbro (HAS)

Year 2012

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Mattel (MAT)

Year 2012

Appendix H: References
1. "Mattel - Best Companies to Work For 2013 - Fortune". Money.cnn.com. 2013-0204. Retrieved 2013-07-10.

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2. "Guess Whos sexist? Classic board games gender bias leaves six-year-old
fuming from "The Independent"
3. Business | Hasbro Continues To Lay Off Workers Despite Expansion Plans.
GoLocalProv (2013-04-30). Retrieved on 2013-09-27.
4. "Six-year-old schools Hasbro on gender equality" from "Yahoo Games"
5. "Hasbro: Feature boys in the packaging of the Easy-Bake Oven" from
"Change.org"

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