Suppose selected financial data of Target and Wal-Mart for 2014 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) Current cash debt coverage.

(13) Cash debt coverage.

(14) Free cash flow.

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

Transcribed Image Text:

Target Corporation Income Statement Data for Year Wal-Mart Stores, Inc. $65,357 45,583 15,101 707 Net sales $408,214 304,657 79,607 2,065 (411) 7,139 Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense (94) 1,384 $ 2,488 $ 14,335 Net income Balance Sheet Data (End of Year) $ 48,331 122,375 $170,706 Current assets $18,424 26,109 $44,533 Noncurrent assets Total assets $ 55,561 44,089 71,056 Current liabilities Long-term debt Total stockholders' equity $11,327 17,859 15,347 Total liabilities and stockholders' equity $44,533 $170,706 Beginning-of-Year Balances Total assets Total stockholders' equity Current liabilities Total liabilities $44,106 13,712 10,512 30,394 $163,429 65,682 55,390 97,747 Other Data $ 7,525 6,942 5,881 1,729 496 $ 4,025 33,836 26,249 12,184 4,217 Average net accounts receivable Average inventory Net cash provided by operating activities Capital expenditures Dividends