Leapfrog-Hasbro-Financial Report

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Financial Report -- Hasbro and LeapFrog 1. Introduction This section talks about the briefly background of Hasbro and LeapFrog to show the general view of the companies. 2.1 Hasbro: Hasbro is established by Henry and Helal Hassenfeld Brothers in the United States in 1923. The company manufactures a variety of world famous toys such as Monopoly, Transformers, Littlest Pet Shop and Star Wars Toys. Also it collaborates with Disney to manufacture toys based on Disney’s characters and themes. 2.2 LeapFrog: LeapFrog is founded in 1995 and the headquarter is located in California, US. LeapFrog produces educational, innovative and high-tech toy commodities to help the children learn knowledge from entertaining. Moreover, LeapFrog promotes its products in more than 35 countries by six different languages all over the world. 2. Ratio Analysis: This section includes five areas which are Profitability, Liquidity, Asset Utilization, Leverage and Capitalization, and Market Valuation to identify the performances of Hasbro and LeapFrog. 3.3 Profitability: Profitability measures the ability of the company to earn profits. Big company and small company usually have different earnings; however, they might have the same percentage return on their assets. Generally, profitability includes Gross Profit on Sales, Return on Sales, Return on Assets, and Return on Equity. Since we will talk about Return on Equity based on DuPont System in later section explicitly, this section picks out Return on Assets and focus on it. Return on Assets(ROA) is Operating Income(OI) divided by Total Assets(TA). ROA measures how effectively the company manages its assets to earn profits. Hasbro: According to Figure 1, the ROA of Hasbro has a gradually upward trend from 6.1204% in 2004 to 10.5148% in 2007 and it decreases to 9.5777% in 2008. Since the benchmark of ROA

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