Question

Selected hypothetical financial data of Targetand Wal-Mart for 2022 are presented here (in millions).

		Target Corporation				Wal-Mart Stores, Inc.
		Income Statement Data for Year
Net sales			$66,400			$414,000
Cost of goods sold			45,000			302,000
Selling and administrative expenses			15,500			81,000
Interest expense			650			1,900
Other income (expense)			(80	)		(400	)
Income tax expense			1,400			7,300
Net income			$ 3,770			$ 21,400
		Balance Sheet Data (End of Year)
Current assets			$17,000			$47,000
Noncurrent assets			26,700			120,000
Total assets			$43,700			$167,000
Current liabilities			$11,000			$56,000
Long-term debt			16,800			45,000
Total stockholders’ equity			15,900			66,000
Total liabilities and stockholders’ equity			$43,700			$167,000
		Beginning-of-Year Balances
Total assets			$45,000			$164,000
Total stockholders’ equity			13,300			64,000
Current liabilities			10,500			58,000
Total liabilities			31,700			100,000
		Other Data
Average net accounts receivable			$7,500			$3,900
Average inventory			7,000			33,600
Net cash provided by operating activities			5,500			27,400
Capital expenditures			1,800			11,800
Dividends			500			4,500

For each company, compute the following ratios. (Round current ratio answers to 2 decimal places, e.g. 15.50, debt to assets ratio and free cash flow answers to 0 decimal places, e.g. 5,275 and all answers to 1 decimal place, e.g. 1.8 or 1.83%.)

		Ratio		Target			Wal-Mart
(1)		Current ratio		enter the current ratio	:1		enter the current ratio	:1
(2)		Accounts receivable turnover		enter accounts receivable turnover in times	times		enter accounts receivable turnover in times	times
(3)		Average collection period		enter average collection period in days	days		enter average collection period in days	days
(4)		Inventory turnover		enter inventory turnover in times	times		enter inventory turnover in times	times
(5)		Days in inventory		enter days in inventory ratio	days		enter days in inventory ratio	days
(6)		Profit margin		enter percentages	%		enter percentages	%
(7)		Asset turnover		enter asset turnover in times	times		enter asset turnover in times	times
(8)		Return on assets		enter percentages	%		enter percentages	%
(9)		Return on common stockholders’ equity		enter percentages	%		enter percentages	%
(10)		Debt to assets ratio		enter percentages	%		enter percentages	%
(11)		Times interest earned		enter times interest earned	times		enter times interest earned	times
(12)		Free cash flow		$enter a dollar amount			$enter a dollar amount

Answer 1

Answer 2

Ans. 0 Current Ratio & Current Assets Cutrew Lilabilities a 1.545:1 Target & $17000 $ 11, to Walmart.: +47,070 :-0.839:1] $56,000 Accounts receivable ſugmover o Net Credent Sales - Average Accounts recevible Target as $66,400 $ 7500 Ö 18.853 times) ③ Walmart ? +414,000 - 1106.15 times ] $3900 Average Collection period or 365 days Account Merekable Turnover Taoget 365 8 (41.22 days 8.853 walmart: 365 - [ 3.438 days Inventory Turnover o Cost of hoods sold Average Inventory $45000 .. 000 : [6.498 times $7,000 walmarts &300000 | 8.988 times 0 Target &

② Days in Inventory & 365 days Average Inventory Target & 365 7.428 a 556.78 Idass : 8.988 X poro walmazt. r 3005 40.605) days - Profit margin & Net Income x 100 Tagget.: +3770 5.67% luefnast 2 3-15-1897 ging 1. Net Income - Net Sales $ 66,400 walmart & 5.169 1 $21, 4o $414,000
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Answer 3