Question

* Problem 13-05A a Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions). Stores, Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense Net income Wal-Mart Target Corporation Inc. Income Statement Data for Year $66,300 $411,000 44,000 305,000 14,300 77,000 660 1,900 (80) (420) 1,500 7,200 $5,760 $19,480 Current assets Noncurrent assets Total assets Current liabilities Long-term debt Total stockholders' equity Total liabilities and stockholders' equity Balance Sheet Data (End of Year) $17,000 $48,000 26,800 122,000 $43,800 $170,000 $11,000 $55,000 17,700 45,000 15,100 70,000 $43,800 $170,000 Total assets Total stockholders' equity Current liabilities Type here to search Beginning-of-Year Balances $43,000 $164,000 12,700 66,000 10,500 55,000

   

Answer 1

Target Walmart Current Ratio Current Assets/ Current Liabilities Current Assets/ Current Liabilities 17000/10500 48000/55000 1.62 Current Ratio 0.87 Account Receivables turnover Credit Sale/ Account Receivables Credit Sale/ Account Receivables 66300/7400 411000/3900 8.96 105.38 Average Collection Period 365/ Account Receivables 365/ Account Receivables turnover Ratio turnover Ratio 40.74 3.46 Inventory Turnover Ratio Cost of Goods Sold/Average Inventory Cost of Goods Sold/Average Inventory 6.29 9.19

Days in Inventory 365/ Inventory Turnover Ratio 365/ Inventory Turnover Ratio 58.07 39.73 OR 360/ Inventory Turnover Ratio 360/ Inventory Turnover Ratio 57.27 39.19 Profit Margin Net Income 100/ Net Sales Net Income*100/ Net Sales 8.69 4.74 Asset Turnover Net Sales/ Average Assets Net Sales/ Average Assets Average Assets (Beginning Assets + End Assets)/2 (Beginning Assets + End Assets)/2 Average Assets 43400 167000 Asset Turnover 1.53 2.46

Return on Assets Net Income/ Average assets Net Income/ Average assets 13.27 11.66 Return on common stockholders equity Net Income) Average Shareholders Equity Net Income/ Average Shareholders Equity Average Shareholders Equity 13900 68000 Return on common stockholders equity 41.44 28.65 Debt to asset ratio Total Debt / Total Assets Total Debt / Total Assets Average Total debt current liabilities + long term liabilities) 29500 99000 Debt to asset ratio 0.68 0.59 Times Interest Earned Earning before Interest and Tax/ Interest Expenses Earning before Interest and Tax/ Interest Expenses Earning before Interest and Tax Net income + Interest + Tax Net income + Interest + Tax 7920 28580

Times Interest Earned Earning before Interest and Tax/ Interest Expenses Earning before Interest and Tax/ Interest Expenses Earning before Interest and Tax Net income + Interest + Тах Net income + Interest + Tax 7920 28580 Times Interest Earned 12 15.04 Free Cash Flow Net Cash Provided by Operating Activities 5500 Change in working capital 26200 not considered, as beginning current assets are not given Less: capital Expenditure Dividends 1800 470 11900 3900 Free Cash Flow 3230 10400