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e Accounting question Ic WileyPLUS C Secure | https://edugen-vvileyplus.com/edugen/ti/main.uni Retun to Blackboard Accounting, 6e BACK ASSIGNMENT RESOURCES Problem 13-5A Suppose selected financial data of Target and Wal-Mart for 2017 are presented here (in millions). Exercises 13-2 Wal-Mart Target Income Statement Data for $65,600 44,000 14,600 690 410.000 30B,000 75,000 2,100 Review Results by Study Net sales Cost of goods sold Salling and administrativa axpanses Interest expenze Other income (expense) Income tax expanse Net income (90) (420) 1,400 7,300 s4,920 s 17,190 Balance Sheet Data End of Year Current assets Noncurrent assets Total aseets Current liabilities Long-tarm dabt Total stockholders equity Total liabibties and stockholders $17,000 26.700 543,700 $11,000 17,000 15,700 548,000 120.000 168,000 $56,000 45,000 67,000 $42,700 S168,000 Total assets Totel stockholders' equity Current liabilities Total liablde 545,000 13.600 10,000 31,400 S165,000 66.000 SB,000 O Type here to search 2-28 PM V30/2018 100%Explanation / Answer
1. current ratio= current asset/current liabiltiy.
current ratio=17000/11000
current ratio (target) =1.55:1
current ratio (wal-mart)=48000/56000
=0.86
2. account receivable turnover= sales/account receivable turnover
account receivable turnover = $65600/$7800
account receivable turnover(target) =8.41
account receivable turnover(wal-mart)=410000/4000
=102.5
3. average collection period(target) = 365/account receivable turnover
=365/8.41
=43.40
average collection period(wal-mart)=365/102.5
=3.56
4. Inventory Turnover(target)=cost of goods sold/ average inventory
=44000/6900
=6.37
Inventory Turnover(wal -mart)=308000/34500
=8.93
5. days in inventory(target) = 365/ inventory turnover
=365/6.37
=57.30
days in inventory(wal-mart)=365/8.93
=40.87
6. profit margin(target) = net income/net sales
=4820/65600
=0.07
=0.07*100=7%
profit margin(wal-mart)=17180/410000
=0.04*100=4%
7. asset turnover(target)=sales revenue/total asset
=65600/43700
=1.50
asset turnover(wal-mart)=410000/168000=2.44
8. return on asset(target)=Net income/Average total assets
=4820/66850
=0.07
return on asset(wal -mart)=17180/250500
=0.07
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