Note: Use the formulas in your textbook for all computations. Ratios presented in the $10-$K of these companies or any third$-$party website are not calculated using the exact same formula as given in the textbook. Hence, you will lose points if you copy the ratios directly from the company's $10-$K reports.

Financial statements of the companies:

Walmart

Target

The required tasks are detailed below:

$(1)$ Prepare vertical common$-$size income statements and balance sheets for both companies. Note: Use $$total sales$$ and $$total assets$$ as the denominators for the income statement and balance sheet, respectively. Compute for $2022,2021,$ and $2020.$

$(2)$ Prepare horizontal analysis on income statements and balance sheets for both companies for $2022$ and $2021.$

$(3)$ Prepare ratio analyses $($for $2022,2021,$ and $2020)$ for both companies. You should include the following ratios in your computations:

Profitability ratios

Gross Profit margin

Profit margin

Return on assets

Return on equity

Productivity

Inventory Turnover

Accounts Receivable Turnover

PPE Turnover

Asset Turnover

Solvency

Debt$-$to$-$equity

Times interest earned

Return on Financial leverage

Liquidity

Current Ratio

Quick Ratio

Operating casNote: Use the formulas in your textbook for all computations. Ratios presented in the $10-$K of these companies or any third$-$party website are not calculated using the exact same formula as given in the textbook. Hence, you will lose points if you copy the ratios directly from the company's $10-$K reports.

Financial statements of the companies:

Walmart

Target

The required tasks are detailed below:

$(1)$ Prepare vertical common$-$size income statements and balance sheets for both companies. Note: Use $$total sales$$ and $$total assets$$ as the denominators for the income statement and balance sheet, respectively. Compute for $2022,2021,$ and $2020.$

$(2)$ Prepare horizontal analysis on income statements and balance sheets for both companies for $2022$ and $2021.$

$(3)$ Prepare ratio analyses $($for $2022,2021,$ and $2020)$ for both companies.$$ You should include the following ratios in your computations:

Profitability ratios

Gross Profit marginProfit marginReturn on assetsReturn on equity

Productivity

Inventory TurnoverAccounts Receivable TurnoverPPE TurnoverAsset Turnover

Solvency

Debt$-$to$-$equityTimes interest earnedReturn on Financial leverage

Liquidity

Current RatioQuick RatioOperating cash flow to current liabilities

Note: Assume the Tax rate to be $35\%$ when calculating Earnings without interest expense $($EWI$).$

$(4)$ Based upon your calculations, recommend the better$-$performing firm for potential investment. Explain why?