Mattel, Inc., designs, manufactures, and markets toy products worldwide. Mattel\

Question

Mattel, Inc., designs, manufactures, and markets toy products worldwide. Mattel's toys include Barbie™ fashion dolls and accessories, Hot Wheels™, and Fisher-Price brands. For a recent year, Mattel reported the following net cash flows from operating activities (in thousands): Companies like Mattel typically experience negative cash flows during the first three quarters and positive cash flows for the fourth quarter due to:

a. bad management decisions b. worsening economic conditions c. seasonal trends d. periods when they have an unlimited line of credit First quarter ending March 31 Second quarter ending June 30 Third quarter ending September 30 Fourth quarter December 31 171,506 (232,557) (40,109) 986,778

Explanation / Answer

Answer: The negative cash flow may be due to worsening economic conditions.

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