III.

Operating efficiency

Hasbro (2015) Hasbro (2016) Mattel (2016)

Inventory turnover 4.36 4.92 4.73
Daily inventory 83.68 74.26 77.19
Account receivable 3.65 3.80 4.89

turnover
Average collection 99.95 95.98 74.60

period
FA utilization 18.72 18.77 7.05
Asset utilization 0.94 0.99 0.84
Day payable 23.22 19.60 44.26

outstanding

Daily sales 12,184.96 13,752.94 14,949.73

Efficiency ratio 131.50 124.17 115.66

Inventory turnover: the inventory turnover of Hasbro has increased by 12.84%, this ratio shows how
many times the inventory will be sold or shifted over a period of time. The Mattel inventory turnover
ratio is 4.73 in 2016 while for Hasbro it is 4.36 which is lower than its competitor showing that our
company have a lower common inventory size.

Account receivable turnover: account receivable turnover has increased by 4.11% between the two
years, this ratio shows how many times the Hasbro company can turn its account receivables into
money but Mattel has a higher ratio which is 4.89 so our company is slower in collecting the cash.

Fixed asset utilization: this ratio shows the ability of the company to create revenue from fixed
assets, it has increased by 0.27% and its ratio is higher than its competitor which indicates that
it has a better operational efficiency from fixed assets.
Asset utilization: this ratio has increased by 5.32% showing our company’s efficiency in
generating revenue from all its assets. Moreover, our ratio 0.99 is higher than Mattel 0.84
which strengthens the idea of our efficiency.
Average collection period DSO: the decrease in this ratio between these 2 years indicates that
we are collecting our A/R in shorter time which is a good sign. Despite our improvement, Mattel
has a higher ratio which shows that it’s faster in collecting its money.
Daily inventory: the daily inventory has decreased by 11.26% and its lower than the competitor
which indicates that we are selling our inventories quickly.
Efficiency ratio: despite the decrease in efficiency ratio by 5.58%, it remains higher than the
competitor which is 115.66. This shows that our company has smaller ability of changing raw
materials into cash but this problem does not affect the Hasbro company a lot since its
efficiency ratio is still dominating the one of Mattel.
Day payable outstanding: it has decreased by 15.59% which shows that our company is paying
its accounts and notes payable in this period. However, this ratio is lower than Mattel (44.26)
which shows that its competitor is postponing the payments of its liabilities. This is a good sign
indicating that our company will pay its loan and won’t delay its payments.
Daily sales: our daily sales have increased by 12.87% which shows that our revenues are
increasing as well but it’s still lower than its competitor so we will work on increasing our sales
much more.