The company that I chose to use as the basis for this assignment was Mattel, Inc. and Subsidiaries. They have their most recent financial statements available right on their website. This paper will analyze the disclosures related to cash and cash equivalents, receivables, and inventory. It will also identify the components of cash and cash equivalents.Cash and Cash EquivalentsThe balance sheet lists a balance for cash and equivalents at $997,734 (in thousands). The disclosure for cash and equivalents notes that t ...view middle of the document...
The disclosures for this account note that Mattel grants credit on an unsecured basis. Each customer must undergo extensive evaluations on an ongoing basis to receive credit from Mattel, they are then set up with credit limits and payment terms. Each customer is reviewed at least once a year, Customers that are perceived to be a credit risk are required to provide a letter of credit, they may be required to factor or purchase some form of credit insurance with a third party, finally for some they are required to pay in advance for their purchases.InventoriesThe balance sheet lists inventories with a balance of $376,897 (in thousands). Mattel values its inventory at lower of cost or market, and uses the first-in, first-out (FIFO) for determining cost.ConclusionMattel appears to be a stable company that will be around for a long time. They evaluate customers extensively before giving them any sort of credit. For high-risk customers they have other requirements. I believe that Mattel provided adequate disclosure for Cash and equivalents, accounts receivable, and inventories in its financial statements.ReferencesKieso, Donald E., Weygandt, Jerry J., Warfield, Wiley. (2007). Intermediateaccounting (12th ed.). New York: John Wiley and Sons.
