Problem 13-5A Suppose selected financial data of Target and Wal-Mart for 2017 ar
ID: 2589005 • 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%.)
Explanation / Answer
Target Corporation Wal-Mart Stores, Inc. 6 Profit Margin 4.28 % 3.02 % Net Income / Sales 2845 / 66400 12310 / 407000 7 Asset Turn Over 1.49 Times 2.44 Times Net Sales / Average total assets 66400 / (46300+43000)/2 407000 /(170000+164000)/2 8 Return on Assets 6.37 % 7.37 % Net Income / Average total assets 2845 / (46300+43000)/2 12310 /(170000+164000)/2 9 Return on common stockholders’ equity 16.54 % 17.84 % Net Income / Total Shareholders equity 2845 / 17200 12310 / 69000 10 Debt to assets ratio 62.85 % 59.41 % Total Debt / Total Assets 29100 / 46300 101000 / 170000 11 Times interest earned 7.19 Times 12.01 Times Income Before interest and taxes or EBIT / Interest Income 4815/670 21610 / 1800 12 Free cash flow 3800 14800 Operating Cash flow - Capital Expenditure 5600 - 1800 26300 -11500