Question

Selected financial data of two competitors, Target and Wal-Mart, are presented here. (All dollars are in millions.) Suppose t
Current assets Noncurrent assets Total assets Current liabilities Long-term liabilities Total stockholders equity Total liab
Target Wal-Mart (a) Working capital $ 10560 1.88 :1 0.70 :1 (b) Current ratio (c) Debt to assets ratio 65.0 % 58.0 % (d) Free
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Answer #1
TARGET WAL-MART
A) WORKING CAPTIAL 10560 (17100)
B) CURRENT RATIO 1.88 0.70
C) DEBT TO ASSET RATIO 65% 58%
D) FREE CASH FLOW 2000 13000
E) EARNINGS PER SHARE 4.42 5.80

WORKING

A) WORKING CAPTIAL=CURRENT ASSET-CURRENT LIABLITIES

TARGET=$22560-$12000=$10560

WAL-MART=$39900-$57000=($17100)

B) CURRENT RATIO=CURRENT ASSET/CURRENT LIABILTIES

TARGET=$22560/$12000=1.88

WAL-MART=$39900/$57000=0.70

C)DEBT-ASSET RATIO=DEBT/ASSET*100%

TARGET =$34164/$52560*100%=65%

WAL-MART=$90422/$155900*100%=58%

D)FREE CASH FLOW = CASH FROM OPERATING ACTIVITIES-CAPTIAL EXPENDITURE

TARGET=$5200-$3200=$2000

WAL-MART=$24300-$11300=$13000

E)EARNING PER SHARE= NET INCOME/COMMON STOCKS

TARGET=$3757/850=4.42

WAL-MART=$26390/4550=5.80

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