Please answer in this format, I will rate it well! Thank you much. Selected fina
ID: 2568096 • Letter: P
Question
Please answer in this format, I will rate it well! Thank you much.
Selected financial data of Target Corporation and Wal-Mart Stores, Inc. for a recent year are presented here (in millions). Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense Net income Target Wal-Mart Corporation Stores, Inc. Income Statement Data for Year $61,471 $374,526 41,895 286,515 16,200 70,847 647 1,798 1,896 4,273 1,776 6,908 $ 2,849 $ 12,731 Current assets Noncurrent assets Total assets Current liabilities Long-term debt Total stockholders' equity Total liabilities and stockholders' equity Balance Sheet Data (End of Year) $18,906 $ 47,585 25,654 115,929 $44,560 $163,514 $11,782 $ 58,454 17,471 40,452 15,307 64,608 $44,560 $163,514 Total assets Total stockholders' equity Current liabilities Total liabilities Beginning-of-Year Balances $37,349 $151,587 15,633 61,573 11,117 52,148 21,716 90,014 Average net accounts receivable Average inventory Net cash provided by operating activities Other Data $ 7,124 $ 3,247 6,517 34,433 4,125 20,354Explanation / Answer
Answer 1.
Current Ratio = Current Assets / Current Liabilities
Target:
Current Ratio = $18,906 / $11,782
Current Ratio = 1.60 : 1
Wal-Mart:
Current Ratio = $47,585 / $58,454
Current Ratio = 0.81 : 1
Answer 2.
Accounts Receivable Turnover = Net Sales / Average Net Accounts Receivable
Target:
Accounts Receivable Turnover = $61,471 / $7,124
Accounts Receivable Turnover = 8.63 times
Wal-Mart:
Accounts Receivable Turnover = $374,526 / $3,247
Accounts Receivable Turnover = 115.35 times
Answer 3.
Average Collection Period = 365 / Accounts Receivable Turnover
Target:
Average Collection Period = 365 / 8.63
Average Collection Period = 42.29 days
Wal-Mart:
Average Collection Period = 365 / 115.35
Average Collection Period = 3.16 days
Answer 4.
Inventory Turnover = Cost of Goods Sold / Average Inventory
Target:
Inventory Turnover = $41,895 / $6,517
Inventory Turnover = 6.43 times
Wal-Mart:
Inventory Turnover = $286,515 / $34,433
Inventory Turnover = 8.32 times
Answer 5.
Days in Inventory = 365 / Inventory Turnover
Target:
Days in Inventory = 365 / 6.43
Days in Inventory = 56.77 days
Wal-Mart:
Days in Inventory = 365 / 8.32
Days in Inventory = 43.87 days
Answer 6.
Profit Margin = Net Income / Net Sales
Target:
Profit Margin = $2,849 / $61,471
Profit Margin = 4.63%
Wal-Mart:
Profit Margin = $12,731 / $374,526
Profit Margin = 3.40%