Compute selected ratios,and compare liquidity,profitability, and solvency forP18-5 Selected financial data of Target Corporation and Wal-Mart Stores, Inc. for arecent year are presented here (in millions).two companies.Wal-MartTargetCorporationIncome Statement Data for Year(LO 2)Stores, Inc.$374,526$61,47141,89516,200Net salesCost of goods soldSelling and administrative expensesInterest expenseOther income (expense)Income tax expense6471,8961,776286,51570,8471,7984,2736,908$ 2,849$ 12,731Net incomeBalance Sheet Data (End of Year)$ 47,585115,929Current assets$18,90625,654Noncurrent assetsTotal assets$44,560$163,514Current liabilities$ 58,454$11,78217,471Long-term debtTotal stockholders' cquity40,45215,30764,608Total liabilities and stockholders' equity$44,560$163,514Problems 827TargetCorporationBeginning-of-Year BalancesWal-MartStores, Inc.Total assetsTotal stockholders' equityCurrent liabilities$37,34915,63311,117$151,58761,57352,148Total liabilities21,71690,014Other DataAverage net accounts receivableAverage inventoryNet cash provided by operating activities$ 7,1246,5174,125$ 3,24734,43320,354Instructions(a) For each company, compute the following ratios.(1) Current ratio.(7) Asset turnover.(8) Return on assets.(9) Return on common stockholders' equity.(10) Debt to assets ratio.(11) Times interest earned.(2) Accounts receivable turnover.(3) Average collection period.(4) Inventory turnover.(5) Days in inventory.(6) Profit margin.(b) Compare the liquidity, profitability, and solvency of the two companies.

Solution:- a)1-Calculation of Current ratio as follows under:-

Problems 827 Wal-Mart Stores, Inc. Target Corporation Total assets Total stockholders' equity Current liabilities Total liabilities Beginning-of-Year Balances $151,587 61,573 52,148 $37,349 15,633 11,117 21,716 90,014 Average net accounts receivable Average inventory Net cash provided by operating activities Other Data $ 7,124 6,517 4,125 $ 3,247 34,433 20,354 Instructions (a) For each company, compute the following ratios. (1) Current ratio. (2) Accounts receivable turmover. (3) Average collection period. (4) Inventory turnover. (7) Asset turnover. (8) Return on assets. (9) Return on common stockholders' equity. (10) Debt to assets ratio. (5) Davy in inventory (11) Times interest earned

Problems 827 Wal-Mart Stores, Inc. Target Corporation Total assets Total stockholders' equity Current liabilities Total liabilities Beginning-of-Year Balances $151,587 61,573 52,148 $37,349 15,633 11,117 21,716 90,014 Average net accounts receivable Average inventory Net cash provided by operating activities Other Data $ 7,124 6,517 4,125 $ 3,247 34,433 20,354 Instructions (a) For each company, compute the following ratios. (1) Current ratio. (2) Accounts receivable turmover. (3) Average collection period. (4) Inventory turnover. (7) Asset turnover. (8) Return on assets. (9) Return on common stockholders' equity. (10) Debt to assets ratio. (5) Davy in inventory (11) Times interest earned

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 4PB

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