Selected financial data of Target Corporation and Wal-Mart Stores, Inc. for a re

Question

Selected financial data of Target Corporation and Wal-Mart Stores, Inc. for a recent year are presented here (in millions).

Target
Corporation

Wal-Mart
Stores, Inc.

Income Statement Data for Year

Balance Sheet Data (End of Year)

Beginning-of-Year Balances

        Other Data

Target
Corporation

Wal-Mart
Stores, Inc.

Income Statement Data for Year

Net sales $61,471 $374,526 Cost of goods sold 41,895 286,515 Selling and administrative expenses 16,200 70,847 Interest expense 647 1,798 Other income (expense) 1,896 4,273 Income tax expense 1,776 6,908 Net income $ 2,849 $ 12,731

Balance Sheet Data (End of Year)

Current assets $18,906 $ 47,585 Noncurrent assets 25,654 115,929 Total assets $44,560 $163,514 Current liabilities $11,782 $ 58,454 Long-term debt 17,471 40,452 Total stockholders’ equity 15,307 64,608 Total liabilities and stockholders’ equity $44,560 $163,514

Beginning-of-Year Balances

Total assets $37,349 $151,587 Total stockholders’ equity 15,633 61,573 Current liabilities 11,117 52,148 Total liabilities 21,716 90,014

        Other Data

Average net accounts receivable $ 7,124 $ 3,247 Average inventory 6,517 34,433 Net cash provided by operating activities 4,125 20,354

Explanation / Answer

Debt to assets-

Target
Corporation

Avg.Liabilities
Avg. Assets

={$(44,560-15,307)+21,716/2}/($44,560+37349)/2

=25,484.5/4,0954.5

=.6222

=.656

Wal-Mart
Stores, Inc.

Avg. Liabilities
Avg.Assets

=[($163,514+90,014)-64,608]/2/($163,514+$151,587)/2

=94,460/157,551

=.5995

*Closing data has been taken.

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