Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions).

Instructions

a. For each company, compute the following ratios.

1. Current ratio.

2. Accounts receivable turnover.

3. Average collection period.

4. Inventory turnover.

5. Days in inventory.

6. Profit margin.

7. Asset turnover.

8. Return on assets.

9. Return on common stockholders? equity.

10. Debt to assets ratio.

11. Times interest earned.

12. Free cash flow.

b. Compare the liquidity, solvency, and profitability of the two companies.

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Wal-Mart Stores, Inc. Target Corporation Income Statement Data for Year Net sales $65,357 $408,214 304,657 Cost of goods sold 45,583 Selling and administrative expenses 15,101 79,607 Interest expense 707 2,065 Other income (expense) (94) (411) Income tax expense 1.384 7.139 $ 2,488 $ 14,335 Net income Balance Sheet Data (End of Year) $ 48,331 $18,424 Current assets Noncurrent assets 26,109 122,375 Total assets $44,533 $170,706 $ 55,561 Current liabilities $11,327 Long-term debt 17,859 44,089 Total stockholders' equity Total liabilities and stockholders' equity 71,056 15,347 $44,533 $170,706 Beginning-of-Year Balances Total assets $44,106 $163,429 Total stockholders' equity 13,712 65,682 Current liabilities 55,390 10,512 Total liabilities 30,394 97,747 Other Data $ 7,525 $ 4,025 Average net accounts receivable Average inventory 6,942 33,836 Net cash provided by operating activities 5,881 26,249 Capital expenditures 1,729 12,184 Dividends 496 4,217