Question
Below you will find the balance sheet and income statement for Target and Walmart (ticker: TGT and WMT). For each company, calculate return on assets,
Below you will find the balance sheet and income statement for Target and Walmart (ticker: TGT and WMT). For each company, calculate return on assets, average collection days, cash coverage ratio, and cash ratio in 2017, assuming the corporate tax rate is 35%. Compare and interpret the ratios between Target and Walmart.
Income Statement | TGT | WMT |
2017 | 2017 | |
Sales | 69,495,000 | 71,890,000 |
Cost of Goods Sold | 49,145,000 | 21,685,000 |
Gross Profit | 20,350,000 | 50,205,000 |
Operating Expenses | 15,338,000 | 29,560,000 |
Continuing Operating Income | 5,012,000 | 20,645,000 |
Other Income | 0 | -116,000 |
EBIT | 5,012,000 | 20,529,000 |
Interest Expense | 582,000 | 726,000 |
Pretax Income | 4,430,000 | 19,803,000 |
Income Tax Expense | 1,296,000 | 3,263,000 |
Net Income | 3,134,000 | 16,540,000 |
Balance Sheet | TGT | WMT | |||
2017 | 2016 | 2017 | 2016 | ||
Cash | 2,512,000 | 4,046,000 | 6,867,000 | 8,705,000 | |
Marketable Securities | 0 | 0 | 0 | 0 | |
Receivables | 749,000 | 736,000 | 5,835,000 | 5,624,000 | |
Inventories | 8,309,000 | 8,601,000 | 43,046,000 | 44,469,000 | |
Other current assets | 212,000 | 533,000 | 0 | 0 | |
Total Current Assets | 11,990,000 | 14,130,000 | 57,689,000 | 60,239 | |
PP&E | 24,658,000 | 25,217,000 | 114,178,000 | 116,516,000 | |
Intangible assets | 187,000 | 794,000 | 17,037,000 | 16,695,000 | |
Other assets | 596,000 | 694,000 | 9,442,000 | 5,510,000 | |
Total Assets | 37,431,000 | 40,262,000 | 196,088,000 | 199,581,000 | |
Accounts Payable | 7,252,000 | 7,418,000 | 41,433,000 | 38,487,000 | |
Short-term Debt | 12,749,000 | 12,768,000 | 46,568,000 | 50,772,000 | |
Other current liabilities | 1871000 | 2439000 | 2777000 | 521000 | |
Total Current Liabilities | 12,707,000 | 12,622,000 | 66,928,000 | 64,619,000 | |
Long-term Debt | 11,031,000 | 11,945,000 | 36,645,000 | 38,952,000 | |
Other liabilities | 2,740,000 | 2,738,000 | 8,714,000 | 6,583,000 | |
Total Liabilities | 26,478,000 | 27,305,000 | 118,290,000 | 115,970,000 | |
Stockholder Equity | 5,707,000 | 5,398,000 | 2,676,000 | 2,122,000 | |
Treasury Stocks | -638,000 | -629,000 | -14,232,000 | -11,597,000 | |
Retained Earnings | 5,884,000 | 8,188,000 | 89,354,000 | 90,021,000 | |
Total Stockholder Equity | 10,953,000 | 12,957,000 | 77,798,000 | 80,546,000 |
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