Problem 14-5A Selected financial data of Target Corporation and Wal-Mart Stores,
ID: 2490476 • Letter: P
Question
Problem 14-5A Selected financial data of Target Corporation and Wal-Mart Stores, Inc. for a recent year are presented here (in millions) Wal-Mart Target Corporation Stores, Inc. Income Statement Data for Yea $61,471 $374,526 Net sales Cost of goods sold 286,515 41,895 Selling and administrative expenses 16,200 70,847 Interest expense 647 1,798 Other income (expense) 1,896 4,273 Income tax expense 1,776 6,908 2,849 12,731 Net income Balance Sheet Data (End of Year $18,906 47,585 Current assets Noncurrent assets 25,654 115,929 $44 $163,514 Total assets Current liabilities $11,782 58,454 Long-term debt 17,471 40,452 Total stockholders' equity 64,608 15,307 Total liabilities and stockholders' equity $44,560 $163,514 Beginning-of-Year Balance $151,587 $37,349 Total assets Total stockholders' equity 15,633 61,573 52,148 Current liabilities 11,117 90,014 Total liabilities 21,716 Other Data Average net accounts receivable 7,124 3,247 Average inventory 6,517 34,433 Net cash provided by operating activities 4,125 20,354 (a) For each company, compute the following ratios. (Use 365 days for calculation. Round all answers to 1 decimal place, e.g. 1.6, or 1.6%.) Ratio arget al-Mart :1 31 (1) Current ratio (2) Accounts receivable turnover times mes (3) Average collection period days (4) Inventory turnover times. times (5) Days in inventory days days (6) Profit margin times (7) Asset turnover times (8) Return on assets (9) Return on common stockholders' equity (10) Debt to assets ratio (11) Times interest earned timesExplanation / Answer
Particulars Target Corporation Wal Mart 1 Current Ratio= Current Assets/ Current Liabilities Current Assets 18,906.00 47,585.00 Current Liabilities 11,782.00 58,454.00 Current Ratio 1.60 0.81 2 Accounts Receivable Turnover= Average Sales/ Average Accounts Receivable Average Sales 61,471.00 3,74,526.00 Average Accounts Receivable 7,124.00 3,247.00 Accounts Receivable Turnover 8.63 115.35 3 Average Collection Period= 365/ Accounts Receivable Turnover 42.30 3.16 4 Inventory Turnover= Average Sales/ Average Inventory Average Inventory 6,517.00 34,433.00 Inventory Turnover 9.43 10.88 5 Days in Inventory= 365/ Inventory Turnover 38.70 33.56 6 Profit Margin= Gross Profit/ Sales *100 Sales 61,471.00 3,74,526.00 Gross Profit= Net Sales- Cost of goods sold 19,576.00 88,011.00 Profit Margin 31.85 23.50 Net Profit 2,849.00 12,731.00 Net Profit Margin= Net Profit/ Sales*100 4.63 3.40 7 Assets Turnover= Net Sales/ Assets Total Assets 44,560.00 1,63,514.00 Assets Turnover 1.38 2.29 8 Return on Assets= Net Profit/ Total Assets 6.39 7.79 9 Return on Common Shareholder's equity= Net Profit/ Shareholder's Equity Shareholder's Equity 15,307.00 65,608.00 Return on Common Shareholder's equity 0.19 0.19 10 Debt to Assets Ratio Debt 17,471.00 40,452.00 Total Assets 44,560.00 1,63,514.00 Debt to Assets Ratio 0.39 0.25 11 Times Interest Earned= EBIT/ Interest EBIT= Net Profit+ Tax+ Interest 5,272.00 21,437.00 Interest 647.00 1,798.00 Times Interest Earned 8.15 11.92