Question

14.5A part a (#1-11) and part b please and thank you

P14.5A (LO 3) Writing Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions). Compute selected ratios, and compare liquidity, profitability, and solvency for two companies. Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense Net income Target Wal-Mart Corporation Stores, Inc. Income Statement Data for Year $65,357 $408,214 45,583 304,657 15,101 79,607 707 2,065 (94) (411) 1,384 7,139 $ 2,488 $ 14,335 Balance Sheet Data (End of Year)

Answer 1

ANSWER:-

Required B

Ratio Formulae Walmart Target Corp Current Ratio Current Assets/ Current Liability 1.63 0.87 Credit sales/ Avg A/cs Receivable Accounts receivable turnover 8.69 101.42 Avg Collection period 365/A/cs receivable turnover ratio 4202 3.60 Inventory Turnover Sales/ Avg Inventory 9.41 12.06 Days in Inventory 365/Inventory Turnover ratio 30.25 38.77 Profit Margin Profit/Sales 0.04 0.04 Asset Turnover Sales/ Total Assets 239 Return on Assets Net Income/ Avg Total Assets 0.06 0.01 Return on common stockholders equity Net Income/ Avg Shareholders Equity 0.17 0.21 Debt to Asset Ratio Debt/ Assets 0.40 0.26 11 Times Interest Earned EBIT/ Total Interest 6.61 11.60 Free Cash flow Cash from operations-Capital Expenditure - Dividend 3,656.00 9,848.00

The liquidity Ratio of target is better than Wallmart and hence it is more more efficient in maintaining the assets in relation to liability.

In term of solvency Wallmart is better off as it less debt as compared to its assets and so higher leverage (Risk)for target corp

Profitability is the same for both ie.,4%

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