Course Projec Essay example

1354 WordsOct 12, 20146 Pages
ACCT504 Professor Morrison Target vs. Walmart ACCT504 Professor Morrison Measuring Ability to Pay Current Liabilities: Target and Walmart's current ratio have a .03 different meaning that both comapnies have a high chance of paying off their debts if they need arises. Measuring Turnover: Walmart has the advantage for the inventory turnover and accounts receivable turnover ratios. Walmart turns over their inventory 10.1 times to Target's 6.1 times and Walmart turns over their accounts receivable 4 times to Target's 13.1 times. Measuring Leverage- Overall Ability to Pay Debts: Target and Walmart have about the same debt to asset ratio with a difference; Walmart has a 63.6% and Target with 62% ratio. Far as the…show more content…
Rate of return on sales times Asset Turnover $1,971 $44,553 = 4.4% $16,022 $204,751 = 7.8% The higher a company's earnings in proportion to its assets, the more effectively they are at using their assets. Total Liabilities Total Assets $28,322 $44,553 = 63.6% $127,005 $204,751 = 62.0% The closer to "1" a company debt ratio gets the more debt they have than assets. Net Income + Int Expense + Tax Expense Interest Expense $4,229 $1,126 = 3.8 1,111,148 95,569 = 11.6 Ensures that a company is able to make payments ot debtors and helps in the prevention of bankruptcy. Lower ratio shows that a company is able look work on other projects. Dividend per share of common stock (Yahoo Finance 2/1/2014) Market price per share of common stock (Yahoo Finance 2/1/2014) $0.36 $53.00 = 0.7% $1.88 $323.00 = 0.6% Measures how much cash flow you are getting for each dollar invested in an equity position. The higher the better. Net income -

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