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

Photo of Monopoly game boardHasbro, 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

  1. What is accounts payable turnover? Why is it important?
  2. Calculate accounts payable turnover for both Hasbro and Mattel for 2013 through 2016.
  3. Is Hasbro’s accounts payable turnover improving or deteriorating? Is Mattel’s accounts payable turnover improving or deteriorating? Explain.
  4. Describe factors that might be causing the trends in the accounts payable turnover for both companies.

Instructor Resources

These resources are provided to give the instructor flexibility for use of Accounting in the Headlines articles in the classroom. The blog posting itself can be assigned via a link to this site OR by distributing the student handout below. Alternatively, the PowerPoint file below contains a bullet point overview of the article and the discussion questions.

  • Student handout (pdf) (word) (contains entire blog posting + discussion questions)
  • PowerPoint file (brief article overview + discussion questions)

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.

About Dr. Wendy Tietz, CPA, CMA, CGMA

Dr. Wendy Tietz is a professor of accounting at Kent State University in Kent, Ohio, USA. She is also a textbook author with Pearson Prentice-Hall.

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