Question

Suppose selected financial data of Target and Wal-Mart for 2017 are presented here (in millions).

		Target Corporation				Wal-Mart Stores, Inc.
		Income Statement Data for Year
Net sales			$64,900			$405,000
Cost of goods sold			44,000			300,000
Selling and administrative expenses			14,000			75,000
Interest expense			650			1,800
Other income (expense)			(70	)		(380	)
Income tax expense			1,300			6,500
Net income			$ 4,880			$ 21,320
		Balance Sheet Data (End of Year)
Current assets			$16,000			$45,000
Noncurrent assets			25,000			120,000
Total assets			$41,000			$165,000
Current liabilities			$10,000			$54,000
Long-term debt			16,800			43,000
Total stockholders’ equity			14,200			68,000
Total liabilities and stockholders’ equity			$41,000			$165,000
		Beginning-of-Year Balances
Total assets			$43,000			$162,000
Total stockholders’ equity			12,500			64,000
Current liabilities			10,000			54,000
Total liabilities			30,500			98,000
		Other Data
Average net accounts receivable			$7,400			$3,800
Average inventory			6,800			32,800
Net cash provided by operating activities			5,500			25,500
Capital expenditures			1,600			11,500
Dividends			450			3,500

(a) For each company, compute the following ratios. (Round current ratio to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 2.5%. Use 365 days in calculation.)

		Ratio		Target			Wal-Mart
(1)		Current ratio			:1			:1
(2)		Accounts receivable turnover			times			times
(3)		Average collection period			days			days
(4)		Inventory turnover			times			times
(5)		Days in inventory			days			days
(6)		Profit margin			%			%
(7)		Asset turnover			times			times
(8)		Return on assets			%			%
(9)		Return on common stockholders’ equity			%			%
(10)		Debt to assets ratio			%			%
(11)		Times interest earned			times			times
(12)		Free cash flow		$			$

Answer 1