Question

		Target Corporation Income Statement	Wal-Mart Stores,Inc. Date of year
Net sales		61,471	374,526
Cost of goods sold		41,895	286,515
Selling and administration expenses		16,200	70,847
Interest expense		647	1,798
Other income (expense)		1,896	4,273
Income tax expense		1,776	6,908
Net Income		2,849	12,731
		Balance sheet data (end of year)
Current assets		18,906	47,585
noncurrent assets		25,654	115,929
total assets		44,560	163,514
current liabilities		11,782	58,454
long-term debt		17,471	40,452
total stockholder's equity		15,307	64,608
total liabilites and stockholders equity		44,560	163,514
		Beginning-of-year balances
total assets		37,349	151,587
total stockholder's equity		15,633	61,573
current liabilities		11,117	52,148
total liabilities		21,716	90,014
		Other Data
Average net receivables		7,124	3,247
average inventory		6,517	34,433
net cash provided by operating activities		4,125	20,354

Please complete this Project 5 by correctly entering and formatting the selected financial data of Target and Walmart for a recent year as presented (in millions) in the first sheet of this Excel spreadsheet in 3 columns in this current sheet of this Excel spreadsheet provided. I have partially completed the Excel spreadsheet. You need to fill out the Walmart financial data in the Walmart column D, which already has been formatted like the Target column B. Use formulas to calculate subtotals for Gross profit, Operating income, etc. like the Target column I. Please do not add zeros or pennies.
Instructions:
(a)    For each company, compute the 11 ratios using formulas in the columns to the right of the financial data and ratio names. Ratio formulas are in Project 5 Ratios sheet in this Excel spreadsheet. Round all calculated ratios and percentages to 1 decimal place. There is no Preferred Stock so there are no Preferred Stock Dividends. Average collection period is also Days in receivables.
(b)   Compare the overall liquidity, profitability, and solvency of the two companies by providing a specific analysis of these three categories of ratios.
(c)    I have set a Portrait Print Area. Please Print Preview to make sure that the 1 Excel sheet still prints on 1 page.
	Target		Walmart
	Corporation		Stores, Onc.					Target		Walmart
	Income Statement Data for Year					Ratios		Corporation		Stores, Onc.
Net Sales	$           61,471				1	Current ratio
Cost of Goods Sold	41,895				2	Receivables turnover (Times per year)
Gross Profit	$           19,576				3	Average collection period (Days)
Operating Expenses					4	Inventory turnover (Times per year)
Selling and administrative expenses	16,200				5	Days in Inventory (Days)
Opereating Income	$              3,376				6	Profit margin (%)
Non-operating items					7	Asset turnover
Interest expense	$                 647				8	Return on assets (%)
Other income (expense)	1,896				9	Return on common stockholders' equity (%)
Total non-operating items	$              1,249				10	Debt to total assets (%)
Income before income tax	$              4,625				11	Times interest earned
Income tax expense	1,776
Net Income	$              2,849
	Balance Sheet Data (End of Year)
Current asssts	$           18,906
Noncurrent assets	25,654
Total assets	$           44,560
Current liabilities	$           11,782
Long-term debt	17,471
Total liabilities	$           29,253
Total stockholders' equity	$           15,307
Total liabilities and stockholders' equity	$           44,560
	Beginning-of-Year Balances
Total assets	$           37,349
Total stockholders' equity	15,633
Current liabilities	11,117
Total liabilities	21,716
	Other Data
Average net receivables	$              7,124
Average Inventory	6,517
Net cash provided by operating activities	4,125
Liquidity:
Answer:
Profitability:
Answer:
Solvency:
Answer:

Answer 1

Income Statement

	Target corp($)	Walmart($)
Net sales	61471	374526
Cost of goods sold	41895	286515
Gross Profit	19576	88011
Operating Exp
Selling and administration exp	16200	70847
Operating income	3376	17164
Non operating exp
Intt exp	647	1798
Other income	1896	4273
Total non operating items	1249	2475
Income before taxes	4625	19639
Tax exp	1776	6908
Net income	2849	12731

	Target Corp($)	Walmart ($)
Current assets	18906	47585
Non current assets	25654	115929
Total assets	44560	163514
Current liab	11782	58454
Long term debt	17471	40452
Total liab	29253	98906
Equity	15307	64608
Total equity and liab	44560	163514
Beginning values
Total assets	37349	151587
Total stockholders equity	15633	61573
Current liab	11117	52148
Total liab	21716	90014
Other data
Average Receivable	7124	3247
Average inventory	6517	34433
Net cash from operating operations	4125	20354

Ratios	formula	target corp	Walmart
1.current ratio	current assets/current liab	18906/11782=1.6	47585/58454=0.81
2. Receivable turnover ratio	Sales/Average Receivable	61471/7124=8.63 times	374526/3247=115.34 times
3. Average collection period	365/Receivable turnover ratio	42.29 days	3.16 days
4.Inventory turnover	sales/ average inventory	61471/6517=9.43 times	374526/34433=10.88 times
5. Days in Inventory	365/turnover ratio	38.71 days	33.55 days
6. Profit margin	net income/ sales*100	2849/61471*100= 4.63%	12731/37452*100=33.99%
7.assets turnover ratio	sales/ beg assets	61471/37349=1.64 times	374526/151587=2.47 times
8.return on assets	net income/assets*100	2849/44560*100=6.39%	12731/163514*100=7.78%
9. Return on stockholders equity	net income/ stockholders equity	2849/15307*100= 18.61%	12731/163514*100=7.78%

10. Debt to total assets

Long term debt/total assets*100

17471/44560*100=39.21%

40452/163514*100=24.74%

11.time interest income before Intt & taxes/Int

Earned=

Target corp= 3376/647=5.22 times

Walmart= 17164/1798=9.55 times

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