Problem 13-5A Suppose selected financial data of Target and Wal-Mart for 2017 ar
ID: 2559708 • Letter: P
Question
Problem 13-5A
Suppose selected financial data of Target and Wal-Mart for 2017 are presented here (in millions).
Target
Corporation
Wal-Mart
Stores, Inc.
Income Statement Data for Year
$66,400
$407,000
46,000
306,000
15,500
79,000
670
1,800
(85
)
(390
)
1,300
7,500
$ 2,845
$ 12,310
Balance Sheet Data
(End of Year)
$19,000
$47,000
27,300
123,000
$46,300
$170,000
$11,000
$56,000
18,100
45,000
17,200
69,000
$46,300
$170,000
Beginning-of-Year Balances
$43,000
$164,000
14,300
66,000
10,800
57,000
28,700
98,000
Other Data
$7,900
$4,100
6,800
34,000
5,600
26,300
1,800
11,500
520
4,200
(a) For each company, compute the following ratios. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%.)
Target
Wal-Mart
Target
Corporation
Wal-Mart
Stores, Inc.
Income Statement Data for Year
Net sales$66,400
$407,000
Cost of goods sold46,000
306,000
Selling and administrative expenses15,500
79,000
Interest expense670
1,800
Other income (expense)(85
)
(390
)
Income tax expense1,300
7,500
Net income$ 2,845
$ 12,310
Balance Sheet Data
(End of Year)
$19,000
$47,000
Noncurrent assets27,300
123,000
Total assets$46,300
$170,000
Current liabilities$11,000
$56,000
Long-term debt18,100
45,000
Total stockholders’ equity17,200
69,000
Total liabilities and stockholders’ equity$46,300
$170,000
Beginning-of-Year Balances
Total assets$43,000
$164,000
Total stockholders’ equity14,300
66,000
Current liabilities10,800
57,000
Total liabilities28,700
98,000
Other Data
Average net accounts receivable$7,900
$4,100
Average inventory6,800
34,000
Net cash provided by operating activities5,600
26,300
Capital expenditures1,800
11,500
Dividends520
4,200
Explanation / Answer
Calculate following :
Target Wal mart Current ratio 19000-10800=8200 47000-57000=(10000) Account receivable turnover 66400/7900=8.41 times 407000/4100=99.27 times Average collection period 365/8.41=43.40 days 365/99.27=3.68 days Inventory turnover 46000/6800=6.76 days 306000/34000=9 times Days in inventory 365/6.76=53.99 days 365/9=40.56 days