Question

Problem 13-5A Suppose selected financial data of Target and Wal-Mart for 2017 are presented here (in millions). Wal-Mart Target Income Statement Data for Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense Net income $66,900 45,000 15,000 $419,000 309,000 80,000 1,900 (80) 1,500 (390) 6,700 4,620 21,010 Balance Sheet Data (End of Year) Current assets Noncurrent assets Total assets Current liabilities Long-term debt Total stockholders" equity Total liabilities and stockholders $17,000 26,700 $43,700 $11,000 18,200 14,500 $43,700 $45,000 120,000 $165,000 55,000 45,000 65,000 $165,000 Total assets Total stockholders' equity Current liabilities Total labilities Beginning-of-Year Balances $165,000 64,000 58,000 101,000 $43,000 12,600 30,400 2 4 6 8 9

Answer 1

		Target Corporation	Walmart Stores, Onc.
1	Current ratio = Current Assets/ Current Liabilities	1.7	0.78	Times
2	Receivables turnover (Times per year) = Net sales/ Av. Net Receivables	8.69	99.76	Times
3	Average collection period (Days) = 365/Receivable turnover	42.01	3.66	Days
4	Inventory turnover (Times per year) = Cost of Good Sold/ Av.Inventory	6.62	8.96	Times
5	Days in Inventory (Days)	55.16	40.75	Days
6	Profit margin (%) = Net Income/ Net sales	6.91%	5.01%
7	Asset turnover = Net Sales/ Av. Total Assets	1.54	2.54	Times
8	Return on assets (%) = Net Profit/ Av. Total Assets	10.66%	12.73%
9	Return on common stockholders' equity (%) = Net Profit/ Av. ShareholderEquity	34.10%	32.57%
10	Debt to total assets (%) = Average total Debt/ Average Total Assets	68.74%	60.91%
11	Times interest earned = net income + interest expense + income tax / Interest Expenses	9.74	15.58	Times

		Target Corporation	Walmart Stores, Onc.
1	Current ratio = Current Assets/ Current Liabilities	=B11/B21	=C11/C21	Times
2	Receivables turnover (Times per year) = Net sales/ Av. Net Receivables	=B3/B24	=C3/C24	Times
3	Average collection period (Days) = 365/Receivable turnover	=365/C31	=365/D31	Days
4	Inventory turnover (Times per year) = Cost of Good Sold/ Av.Inventory	=B4/B25	=C4/C25	Times
5	Days in Inventory (Days)	=365/C33	=365/D33	Days
6	Profit margin (%) = Net Income/ Net sales	=B9/B3	=C9/C3
7	Asset turnover = Net Sales/ Av. Total Assets	=B3/AVERAGE(B13,B19)	=C3/AVERAGE(C13,C19)	Times
8	Return on assets (%) = Net Profit/ Av. Total Assets	=B9/AVERAGE(B13,B19)	=C9/AVERAGE(C13,C19)
9	Return on common stockholders' equity (%) = Net Profit/ Av. ShareholderEquity	=B9/AVERAGE(B16,B20)	=C9/AVERAGE(C16,C20)
10	Debt to total assets (%) = Average total Debt/ Average Total Assets	=AVERAGE((B14+B15),B22)/AVERAGE(B13,B19)	=AVERAGE((C14+C15),C22)/AVERAGE(C13,C19)
11	Times interest earned = net income + interest expense + income tax / Interest Expenses	=(B9+B6+B8)/B6	=(C9+C6+C8)/C6	Times