18-5

Answer a, b

P18-5 Selected financial data of Target and Wal-Mart for a recent year are presented here (in millions) Target Corporation Wal-Mart Stores, Inc Income Statement Data for Year $374,526 286,515 70,847 Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense Net income $61,471 41,895 16,200 1,798 4,273 6,908 $12,731 Balance Sheet Data (End of Year) $47,585 115,929 $163,514 $58,454 40,452 64,608 $163,514 647 1,896 1,776 $2,849 Current assets Noncurrent assets Total assets Current liabilities Long-term debt Total stockholders' equity Total liabilities stockholders' equity $18,906 25,654 $44,560 $11,782 17,471 15,307 44,560 and Target Corporation Wal-Mart Stores, Inc Beginning-of-Year Balances Total assets Total stockholders' equity Current liabilities Total liabilities $37,349 15,633 11,117 21,716 $151,587 61,573 52,148 90,014 Other Data Average net receivables Average inventory Net cash provided by operating $7,124 6,517 4,125 $3,247 34,433 20,354 activities Instructions (a)For each company, compute the following ratios. 1. Current. 2. Receivables 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 total assets. 11. Times interest earned. (b)Compare the liquidity, profitability, and solvency of the two companies