edugen.wileyplus.com . Suppose selected financial data of Target and Wal-Mart fo
ID: 2593274 • Letter: E
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edugen.wileyplus.com . Suppose selected financial data of Target and Wal-Mart for 2019 are presented here (in millions) Target Corporation Wal-Mart Stores, Inc. Income Statement Data for Year Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense Net income $66,700$418,000 309,000 78,000 1,900 (420) 6,700 $21,980 45,000 15,200 740 (95) 1,400 $4,265 Balance Sheet Data (End of Year) cis Current assets $18,000 25,600 $43,600 $11,000 17,200 15,400 $45,000 Noncurrent assets 120,000 $165,000 $56,000 44,000 65,000 $43,600 $165,000 Total assets rcis Current liabilities blet Long-term debt Total stockholders' equity blst Total liabilities and stockholders' equity Beginning-of-Year Balances ew S Total assets $45,000 13,400 10,600 31,600 $163,000 65,000 58,000 98,000 ew R Total stockholders' equity ctiv Current liabilities Total liabilities seExplanation / Answer
66700/44300*=1.5 times
*(45000+43600)/2=44300
418000/164000*=2.5 times
*(163000+165000)/2=164000
(4265-0)/14400*=29.62%
*(13400+15400)/2=14400
(21980-0)/65000*=33.82%
*(65000+65000)/2=65000
Formula Target Wal-Mart 1 Current ratio = Current Asset/Current Liablities 18000/11000=1.64:1 45000/56000=0.8:1 2 Account Receivable Turnover Ratio=Net Credit Sales/Average Accounts Receivable 66700/7500=8.89 times 418000/3900=107.18 times 3 Number of days’ sales in receivables = 365/Account Receivable Turnover Ratio 365/8.89=41 days 365/107.18=3 days 4 Inventory turnover= Cost of Goods Sold/Average Inventory 45000/7000=6.43 times 309000/32800=9.42 times 5 Number of days’ sales in inventory=Ending Inventory/Cost of Goods Sold*365 7000/45000*365=57 days 32800/309000*365=39 days 6 Profit margin ratio=Net Income/Net Sales 4265/66700*100=6% 21980/418000*100=5% 7 Asset turnover=Net Sales/Average Total Asset66700/44300*=1.5 times
*(45000+43600)/2=44300
418000/164000*=2.5 times
*(163000+165000)/2=164000
8 Return on total assets= Net Income/Average Total Asset 4265/44300=9.63% 21980/164000=13.40% 9 Return on common stockholders’ equity= Net Income-Preferred Dividend/Average common stockholders’ equity(4265-0)/14400*=29.62%
*(13400+15400)/2=14400
(21980-0)/65000*=33.82%
*(65000+65000)/2=65000
10 Debt to Total Asset Ratio=Total Debt OR Total Liability/Total Assets (11000+17200)/43600=64.68% (56000+44000)/165000=61% 11 Times interest earned= Eaning before interest and Tax expense/Interest expense (66700-45000-15200-95)/740=8.66 times (418000-309000-78000-420)/1900=16.09 times 12 Free cash flow= Net cash provided by operating activities-capital expenditure 5800-1700=4100 26900-11800=15100Related Questions
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