Hasbro Inc. Financial Essay
The Hasbro Toy Company was founded in 1923 by the Hassenfeld brothers, Henry and Helal. The original company was started in a small office in Providence, Rhode Island. The company’s original product was textile remnants. “Later on the production focus shifted to school supplies. (Hasbro, 2007)” From school supplies, the transition to toys was just a step away. It started first with educational toys, and then progressed to other toy companies that were acquired throughout the following years.
One of the major accomplishments occurred in the 1980’s. One of the Hassenfeld families launched an international effort. It included “taking toys that failed in the U.S. market and remerchandising them overseas at prices as high as four times their original prices. Hassenfeld had helped increase international sales from $268 million in 1985 to $433 million in 1988. Therefore, it was not surprising that as chairperson he would push to increase Hasbro’s international presence. He did just that in 1991, establishing operations in Greece, Hungary, and Mexico. (Hasbro, 2007)” With this leadership, the company was heading towards success.
A more influentional markets was the Far East. This required more distribution cannels to be acquired. As a result, “Hasbro’s international sales had reached $1.28 billion,
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Some of the many companies that were acquired include such brand names as Galoob Toys, Inc; Tiger Electronics Inc.; Milton Bradley Company.; Playskool, Inc.; Tonka Corporation; Parker Brothers & Co; Nomura Toys Ltd. (Japan); Romper Room Enterprises; Kenner Products; Wizards of the Coast, Inc; Oddzon Products, Inc.; Laramie Corporation; WowWee, Inc. With many of these companies, Hasbro has now become a giant in the toy industry.
The toy industry is not a monopoly so to speak. With the Hasbro Corporation, it has its fair share of detractors. The companies that challenge Hasbro on a regular basis include such companies as “Mattel; LEGO; Acclaim Entertainment; Applause; Bandai; Electronic Arts; Infogrames, Inc.; JAKKS Pacific; Marvel Enterprises; Nintendo; Ohio Art; Play-By-Play; Playmates; Play Mobil; SEGA; Sony; Toymax International; Ty; and Vivendi Universal Publishing. (Hasbro, 2007)” With this competition though, it all came down to the bottom line for answers.
Total Assets Hasbro’s total assets reported on their most recent annual reporting period, December 30, 2007, were $3,237,063. This was an increase of $140,158 from the previous year reporting at December 31, 2006, were Hasbro reported $3,096,905 in total assets. The increase can be attributed to many different factors. “In 2006, Hasbro came too entered into a license agreement with Marvel to produce toys and games based on Marvel’s portfolio of characters.(Hasbro Inc, 2008, p.26)” This agreement allowed Hasbro to profit from sales in 2007, primarily due to the theatrical release of SPIDER-MAN 3 in May of 2007. “Hasbro has also incurred royalties on products based on the theatrical release of Transformers in July 2007. (Hasbro Inc, 2008, p.26)”
Cash and Cash Equivalents Cash and cash equivalents is “an item on a balance sheet that reports the value of a company’s assets that are cash or can be converted into cash immediately.”(Investopedia 2008) “Some examples of cash and cash equivalents are bank accounts, marketable securities and Treasury bills.”(Investopedia 2008) Hasbro had $715,400 cash and cash equivalents for the period ended of December 31, 2006. However, for the period ending of December 31, 2007, Hasbro had $774,458 cash and cash equivalents. Hasbro has gained $59,058 worth of cash and cash equivalents over one year period. Hasbro has played a significant role of enhancing the families to want to spend more time together and because Hasbro makes the games and toys cash flows have increased.
Total Account Payable “Total accounts payable are the unpaid bills of the business; the money you owe to your suppliers and other creditors.”(BizFiling 2008) Hasbro had $895,311 of accounts payable for the year ending of December 31, 2006. However, for the period ending December 31, 2007, Hasbro had $742,122. A decrease of $153,189 in the accounts payable showing that Hasbro has a well-organized company that does not have a lot of debt owed. Accounts payable is a liabilities account that shows how much debt the company like services, goods, and supplies. Hasbro currently seems to be in a good standing point when accounts payable decreases over a year’s time.
Net Revenue and Income Reports Net revenues for Hasbro have increased every year for the last three annual reporting periods. In December 2005, they reported net revenues of $3,087, 627. The following year, there was an increase of $63, 854 for a total of $3,151,481 in net revenues. In December 2007, net revenues were $3,837, 557. This was a 22% increase from the year before. Net earnings in 2007 were $333, 003 million for an increase of $102, 948 compared to net earnings of $230, 055 in 2006.