Reference no: EM132498409

Question 1: What has been the accounts payable turnover trend for Hasbro and Mattel?

JUNE 16, 2017 BY DR. WENDY TIETZ, CPA, CMA, CSCA, CGMA 0 COMMENTS

Hasbro, Inc. (NASDAQ: HAS) and Mattel, Inc. (NASDAQ: MAT) are two companies in the toy and game industry. Hasbro products include Monopoly board games, G.I. Joe dolls, Furby electronic stuffed animals, Transformers mechanical toys, and the My Little Pony toys. Mattel products include Fisher-Price toys, Barbie dolls, Hot Wheels cars, American Girl dolls, Apples to Apples games, and Blokus games.

To follow are selected data from the Form 10-Ks for the years 2012 - 2016 for both Hasbro and Mattel.

Hasbro, Inc.

Selected financial data from Form 10-K

(in thousands)

                                      12/25/2016               12/27/2015             12/28/2014          12/29/2013                 12/30/2012

Inventory                        387,675                   384,492                    339,572              348,794                   316,049

Accounts payable              319,525                   241,210                       212,549            198,799                   139,906

Cost of sales                    1,905,474                    1,677,033                   1,698,372         1,672,901               1,671,980

Mattel, Inc.

Selected financial data from Form 10-K

(in thousands)

                                    12/31/2016               12/31/2015                 12/31/2014               12/31/2013                12/31/2012

Inventory                 613,798                         587,521                   562,047                   568,843                  465,057

Accounts payable       664,857                         651,681                  430,259                     375,328                 385,375

Cost of sales            2,902,259                          2,896,255               3,022,797                  3,006,009            3,011,684

• For this analysis, assume that both companies make all purchases on account.

Questions

Question 1: What is accounts payable turnover? Why is it important?

Question 2: Calculate accounts payable turnover for both Hasbro and Mattel for 2013 through 2016.

Question 3: Is Hasbro's accounts payable turnover improving or deteriorating? Is Mattel's accounts payable turnover improving or deteriorating? Explain.

Question 4: Describe factors that might be causing the trends in the accounts payable turnover for both companies.