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Selected hypothetical financial data of Target and Wal-Mart for 2022 are presented here (in millions) Target Corporation Wal-Mart Stores, Inc
Selected hypothetical financial data of Target and Wal-Mart for 2022 are presented here (in millions)
Target Corporation Wal-Mart Stores, Inc. Income Statement Data for Year Net sales $66.800 $413,000 Cost of goods sold 46.000 308.000 Selling and administrative expenses 14.400 77,000 Interest expense 680 1.800 Other income (expense) (90 (380 ) Income tax expense 1.400 6.900 Net income $ 4,230 $ 18.920
Balance Sheet Data (End of Year) Current assets $18.000 $47,000 Noncurrent assets 27.500 121.000 Total assets $45.500 $168.000 Current liabilities $11.000 $54,000 Long-term debt 16.800 45,000 Total stockholders' equity 17.700 69,000 Total liabilities and stockholders' equity $45.500 $168,000
Beginning-of-Year Balances
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 :1 :1 (2) Accounts receivable turnover times times (3) Average collection period days days (4) Inventory turnover times times (5) Days in inventory days days (6) Profit margin (7) Asset turnover times times (8) Return on assets (9) Return on common stockholders' equity (10) Debt to assets ratio (11) Times interest earned times times (12) Free cash flow $
Expert Solution
As you have not provided information for some accounts. So, I have assumed as follows:
| Beginning-of-year Balances | ||
| Total Assets | $43,000 | $162,000 |
| Total Stockholders' Equity | $13,500 | $64,000 |
| Current Liabilities | $10,500 | $54,000 |
| Total Liabilities | $29,500 | $98,000 |
| Other Data | ||
| Average Net Accounts Receivables | $7,700 | $3,800 |
| Average Inventory | $6,800 | $34,200 |
| Net Cash Provided by Operating activities | $5,600 | $25,600 |
| Capital Expenditures | $1,800 | $12,100 |
| Dividends | $450 | $4,300 |
| 1) | Target | Wall-Mart |
| Current Assets (a) | $18,000 | $47,000 |
| Current Liabilities (b) | $11,000 | $54,000 |
| Current Ratio (a/b) | 1.64 | 0.87 |
| 2) | ||
| Net credit sales (a) | $66,800 | $413,000 |
| Average accounts receivable (b) | $7,700 | $3,800 |
| Accounts receivable turnover ratio (a/b) | 8.68 | 108.68 |
| 3) | ||
| Number of days in a year (a) | 365 | 365 |
| Accounts receivable turnover ratio (b) | 8.68 | 108.68 |
| Average collection period (a/b) | 42.05 | 3.36 |
| 4) | ||
| Cost of Goods Sold (a) | $46,000 | $308,000 |
| Average Inventory (b) | $6,800 | $34,200 |
| Inventory turnover (a/b) | 6.76 | 9.01 |
| 5) | ||
| Number of days in a year (a) | 365 | 365 |
| Inventory turnover (b) | 6.76 | 9.01 |
| Days in Inventory (a/b) | 53.99 | 40.51 |
| 6) | ||
| Net Income (a) | $4,230 | $18,920 |
| Net Sales (b) | $66,800 | $413,000 |
| Net Profit Margin(ab) | 6.33% | 4.58% |
| 7) | ||
| Net Sales (a) | $66,800 | $413,000 |
| Average Total Assets (b) | 44250 | 165000 |
| Asset Turnover (a/b) | 1.51 | 2.50 |
| 8) | ||
| Net Income (a) | $4,230 | $18,920 |
| Average Total Assets (b) | 44250 | 165000 |
| Return on Assets | 9.56% | 11.47% |
| 9) | ||
| Net Income (a) | $4,230 | $18,920 |
| Average Stockholders' Equity (b) | $15,600.00 | $66,500.00 |
| Return on Common Stockholders' Equity (a/b) | 27.12% | 28.45% |
| 10) | ||
| Total Liabilities (a) | 27800 | 99000 |
| Total Assets (b) | 45500 | 168000 |
| Debt to Assets Ratio (a/b) | 61.10% | 58.93% |
| 11) | ||
| EBIT (a) | 6310 | 27620 |
| Total Interest Expenses (b) | 680 | 1800 |
| Time Interest Earned Ratio (a/b) | 9.28 | 15.34 |
| 12) | ||
| Net Cash provided by Operating Activities (a) | 5600 | 25600 |
| Capital Expenditure (b) | 1800 | 12100 |
| Dividends © | 450 | 4300 |
| Free Cash Flow (a-b-c) | $3,350 | $9,200 |
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