Can someone help with this? All except for cash flow (d) ratio needed. P2-7A Sel
ID: 2328767 • Letter: C
Question
Can someone help with this? All except for cash flow (d) ratio needed.
P2-7A Selected financial data of two competitors, Target and Wal-Mart, are presented here. (All dollars are in millions.) Suppose the data were taken from the 2017 financial statements of each company. Target (1/31/17) Wal-Mart (1/31/17) Income Statement Data for Year Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income Income taxes Net income $64,948 44,157 16,389 894 28 1,322 2,214 $401,244 306,158 76,651 2,103 4,213 7,145 $ 13,400Explanation / Answer
SL # Particular Target Wal-mart a Net sales $ 64,948 $ 401,244 b Cost of goods sold $ 44,157 $ 306,158 c Selling and administrative overhead $ 16,389 $ 76,651 d Interest expenses $ 894 $ 2,103 e Other income $ 28 $ 4,213 f income taxes $ 1,322 $ 7,145 g Net income $ 2,214 $ 13,400 h Current asset $ 17,488 $ 48,949 i Non current assets $ 26,618 $ 114,480 j Total asset $ 44,106 $ 163,429 k Current liabilities $ 10,512 $ 55,390 l Long-term liabilities $ 19,882 $ 42,754 m Total stockhodler's equity $ 13,712 $ 65,285 n Total liabilities and stockholder's equity $ 44,106 $ 163,429 o Net cash provided by operating activities $ 4,430 $ 23,147 p cash paid for capital expenditure $ 3,547 $ 11,499 q dividend declared and paid on common stock $ 465 $ 3,746 r Weighted average share outstanding (millions) 774 3951 Answer a) working capital = Current asset - current liabilities =h-k $ 6,976 $ (6,441) Answer b) Current ratio = Current Asset / Current liabilities = h/k 1.66 0.88 Answer c) Debt to asset ratio : (Current liabilities + Long term liabilities)/Total asset = (k+l)/j 0.69 0.60 Answer e) Earning per share = net income/number of share outstanding = g/r $ 2.86 $ 3.39 answer f) Liquidity is reflected by net working capital, current asset ratio. We can see net working capital is negative for Wal-Mart and also Current ratio is lower compared to Target. Hence, Target has better liquidity compared to Wal-mart Solvency : is reflected by ability of company to pay its debt on time. We can see debt to asset ratio is lower for Wal-Mart. Target has relatively higher debt compared to Wal-mart. Hence solvency for Wal-mart is better .