Due - Mar 15, 2021 Financial Statement Analysis Problem-A Comparative Analysis of Walmart Inc. and Target Corporation Description You have been hired by a local investment bank to provide a financial analytical ratio analysis of Walmart Inc. and Target Corporation to determine which company is the best company to put their investment dollars. You will use your knowledge leared in class to apply this analysis to both companies. Using the financial statements for Walmart Inc. and Target Corporation, respectively, you will calculate and compare the financial ratios listed below and prepare your comments about the two companies' performance based on your ratio calculations. Purpose This project meets our course student learning objectives, in which you will: interpret company activity, profitability, liquidity, and solvency through selection and application of appropriate financial analysis tools. Criteria for Success This project is worth 150 points or 15.0% of your overall grade in the course. Please see the defined rubric for this project on Canvas. You will be using Excel or another spreadsheet program to complete this project. I have provided a template for you to use which sets up the format for the project. You will submit an Excel document in Canvas. Financial Statement Links have provided in this document the required financial statements needed to complete the project. If you are interested in seeing the complete 10-K published for each company, you can click on the below links. Here is the link for the financial statements for Walmart Inc. for the fiscal year ending January 31, 2019. WMT - Walmart Inc 2019 10-K Due - Mar 15, 2021 Here is the link for the financial statements for Target Corporation for the fiscal year ending February 2, 2019. TGT - Target Corp. 2019 10-K Overall Requirements Your final uploaded submission should contain the following items: 1. All 11 ratios for each company, with the supporting calculations. Supporting calculations must be shown as a written formula and all numbers used in the formulas. You must do your calculations in Excel, not on a calculator then typed into Excel. The ratios are listed below. (On the Ratios tab of the Excel workbook) 2. Comment on each of the ratios and compare the two companies. Your comments for each ratio should include more than just a definition of the ratio. You should focus on interpreting each ratio number for each company and support your comments with the numbers found in the ratios. (On the Ratios of the Excel workbook) 3. Included is a Summary and Conclusions page, where you need to make an overall comparison of how each company compares in terms of the major category of ratios described in Financial Statement Analysis appendix in the book and review the slides and video in the Group Project Module. A nice way to conclude is to state which company you think is the better investment and why. I have included the ratios that apply to each of the categories in parentheses. (On the Summary tab of the Excel workbook) Required Ratios for Project Submission 1. Basic Earnings per Share of Common Stock (No calculation needed just the amount) 2. Current Ratio 3. Days Inventory Outstanding (DIO) / Days' sales in inventory 4. Days' Sales Outstanding (DSO) /Days' sale uncollected 5. Accounts Receivable Turnover 6. Inventory Turnover 7. Asset Turnover 8. Debt to Equity Ratio 9. Return on Total Assets (ROA) 10. Gross Profit Margin Ratio 11. Profit Margin Ratio Walmart Inc. Consolidated Statements of Income Fiscal Years Eaded January 2019 2018 2017 5 $ 510,329 4,076 495,761 4.582 481,317 4,556 514,405 500 343 495,873 385301 107.147 21.957 373,395 106.510 20.437 361.25 101.858 22.764 (Amounts in millions, rept in share datal Revenues: kot sales (Use this amount for Net Sales) Membership and other income Total revenues Costs and expenses Cost of sales Operating, selling general and administrative expenses Operating income Interest: Det Capital lease and financing obligations Interest income Interest, net Loss on extinguishment of debt Other (gains) and losse Income before income tales Provision for income taxes Consolidated net income Consolidated net income attributable to moncontrolling interest Consolidated net income attributable to Walmart (Use this amount for Net Income) 1.975 371 217) 1978 352 (152) 2.178 2.044 325 (100 2,267 2.129 3,136 3.368 11.460 15.123 4.600 20,497 6.2014 4.21 10.523 7.179 (509) 6,670 (661) 9,862 14.293 (650 13,643 5 2.38 5 4.40 Net income per common share: Basic set income per common share attributable to Walmart Diluted net income per common share attributable to Walmart 226 3.28 439 Weighted average common shares outstanding Basic Diluted 2.929 2.945 2.995 3,010 3,104 3,112 Dividends declared per common share 5 2655 204 $ 2.00 See accompanying notes 48 and attached Walmart Inc. Consolidated Balance Sheets 4 As of January 2019 2018 7.722 5 44 Amino ASSETS Carretas Cash and cash equivalents Receivable et Invention Prepaid expenses and other Tal current Property and equipment: Property and went Les accumsated depreciation Property and, net Property under capital and Meaning obligations Property under capital and financing obligation Les commutate marination Property under capital and financing obligations, et 6.756 5.61 43789 3:31 59,664 61.97 185,810 (81,493) 15.154 071413) 107.675 104317 12.10 SA 13.70 5 (540) 7.143 7.0T Goodwin Other long term Talants 31,181 142 219.295 1804 11,79 2044521 5 5 5 535 5225 17.000 . LIABILITIES AND EQUITY Curabite Short-brown Access payable Acred liabilities Accrande Long-term del dw within one you Capitale and facing idee within one year Total current les 22.159 438 1.876 22.122 645 3.79 667 77.477 78.52 Long-term debe Long-term capital case and financing obligation Deferred income taxes and other You will need to add all 4 of the liability costs for total labilities 43.520 6,689 11.981 30,045 6720 154 Commitments and concies Equity Connenstock 265 capital in excess of par value Retained caning, 3095 2,965 2.648 90.785 CHI, SA2) 10,181) 72, 496 77,869 Accumulated other comprehensive loss Total Walmart sharcholder's equity (un tus amat for 85,107 Consolidated Statements of Operations (Income Statement) (88) 2018 2017 (millions, except per share data) 2019 As Adjusted As Adjusted Sales (Use this amount for Net Sales) $ 74,433 $ 71,786 $ 69,414 Other revenue 923 928 857 Total revenue 75,356 72,714 70,271 Cost of sales 53,299 51.125 49.145 Selling general and administrative expenses 15,723 15,140 14,217 Depreciation and amortization (exclusive of depreciation included in cost of sales) 2.224 2.225 2,045 Operating income 4,110 4,224 4,864 Net interest expense 461 653 991 Net other (income) expense (27) (59) Earnings from continuing operations before income taxes 3,676 3,630 3,964 746 722 Provision for income taxes 1,295 Net earnings from continuing operations 2,930 2,908 2,666 7 6 Discontinued operations, net of tax 68 Net earnings (Use this amount for Net Income) $ 2,937 $ 2,914 $ 2.734 Basic earnings per share Continuing operations $ 5.54 $ 5.32 $ 4.61 Discontinued operations 0.01 0.01 0.12 Net earnings per share $ 5,55 $ 5.32 $ Diluted earnings per share Continuing operations $ 5.50 $ 5.29 $ 4.58 Discontinued operations 0.01 0.01 0.12 Net earnings per share $ 5.51 $ 5.29 $ 4.60 Weighted average common shares outstanding Basic 528.6 546.8 5776 Diluted 533.2 550.3 582.5 Antidilutive shares 4.1 0,4 Note: Per share amounts may not foot due to rounding. See accompanying Notes to Consolidated Financial Statements Refer to Note 2 regarding the adoption of new accounting standards for revenue recognition, leases, ai pensions 4.72 35 Consolidated Statements of Financial Position (Balance Sheet) February 3 February 2, 2018 (millions, except footnotes) 2019 As Adjusted Assets Cash and cash equivalents $ 1,556 $ 2,643 Inventory 9,497 8,597 Other current assets (Use this amount for Receivables) 1,466 1,300 Total current assets 12,519 12,540 Property and equipment Land 6,064 6,095 Buildings and improvements 29,240 28.131 Fixtures and equipment 5,912 5,623 Computer hardware and software 2,544 2,645 Construction-in-progress 460 440 Accumulated depreciation (18,687) (18,398 Property and equipment, net 25,533 24,536 Operating lease assets 1,965 1,884 Other noncurrent assets 1,273 1,343 Total assets $ 41,290 $ 40,303 Liabilities and shareholders' investment Accounts payable $ 9,761 $ 8,677 Accrued and other current liabilities 4,201 4,094 Current portion of long-term debt and other borrowings 1,052 281 Total current liabilities 15.014 13,052 Long-term debt and other borrowings 10.223 11.117 Noncurrent operating lease liabilities 2,004 1,924 Deferred income taxes 972 693 Other noncurrent liabilities 1.780 1,866 Total noncurrent liabilities You will need to add current and noncurrent 14,979 15,600 Shareholders' investment liabilities for total liabilities Common stock 43 45 Additional paid-in capital 6,042 5,858 Retained earnings 6,017 6.495 Accumulated other comprehensive loss (805) (747) Total shareholders' investment (Use this amount for Equity) 11,297 11,651 Total liabilities and shareholders' investment $ 41,290 $ 40,303 Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; 517,761,600 shares issued and outstanding February 2, 2019, 541,681,670 shares issued and outstanding at February 3, 2018 Preferred Stock Authorized 5,000,000 shares, $0.01 par value, no shares were issued or outstanding at February 2, 20 or February 3, 2018 See accompanying Notes to Consolidated Financial Statements Refer to Note 2 regarding the adoption of new accounting standards for revenue recognition, leases, at pensions is Excel preadsheet to computeration show your computations for all ration on this tab and to include your commentary ancial statements used to calculate these roos are able on the siment per AY Target per fare of Common Stocks.common Ratio Old As given on the statement Carrer Gurbet Inventory cods 31 315014 000 MA 544209 385-501 43 day ays Inventory outstanding (10) als outstanding (10) unts Receivable Turnover tory Turnover turnover 1o Equity Ratio rn on Total Asset (ROA) Profil Margin Ratio et Margin Ratio COGS Argentory ory Turnover COGS Average Inventory $14,026 ime turnover do Equity Ratio mon Total Assets (ROA) Profit Margin Ratio Margin Ratio Summary and Conclusion Page You all get the chance to play the role of financial analyst below. The summary should be a comparison of each company's performance for each major category of ratio liquidity, solvency, and profitability isted below. Focus on major differences as you compare each company's performance. A nice way to conclude is to state which company you feel is the better investment and why Meaning in Anany to Pay Cabin Current ,00, SOM Meaning Turner of ventry and everyone, Rumor. A MedOverall Aty to Pay Dots De toute Measuring ProTROA Gross profe martial argint Conclusion hop Due - Mar 15, 2021 Financial Statement Analysis Problem-A Comparative Analysis of Walmart Inc. and Target Corporation Description You have been hired by a local investment bank to provide a financial analytical ratio analysis of Walmart Inc. and Target Corporation to determine which company is the best company to put their investment dollars. You will use your knowledge leared in class to apply this analysis to both companies. Using the financial statements for Walmart Inc. and Target Corporation, respectively, you will calculate and compare the financial ratios listed below and prepare your comments about the two companies' performance based on your ratio calculations. Purpose This project meets our course student learning objectives, in which you will: interpret company activity, profitability, liquidity, and solvency through selection and application of appropriate financial analysis tools. Criteria for Success This project is worth 150 points or 15.0% of your overall grade in the course. Please see the defined rubric for this project on Canvas. You will be using Excel or another spreadsheet program to complete this project. I have provided a template for you to use which sets up the format for the project. You will submit an Excel document in Canvas. Financial Statement Links have provided in this document the required financial statements needed to complete the project. If you are interested in seeing the complete 10-K published for each company, you can click on the below links. Here is the link for the financial statements for Walmart Inc. for the fiscal year ending January 31, 2019. WMT - Walmart Inc 2019 10-K Due - Mar 15, 2021 Here is the link for the financial statements for Target Corporation for the fiscal year ending February 2, 2019. TGT - Target Corp. 2019 10-K Overall Requirements Your final uploaded submission should contain the following items: 1. All 11 ratios for each company, with the supporting calculations. Supporting calculations must be shown as a written formula and all numbers used in the formulas. You must do your calculations in Excel, not on a calculator then typed into Excel. The ratios are listed below. (On the Ratios tab of the Excel workbook) 2. Comment on each of the ratios and compare the two companies. Your comments for each ratio should include more than just a definition of the ratio. You should focus on interpreting each ratio number for each company and support your comments with the numbers found in the ratios. (On the Ratios of the Excel workbook) 3. Included is a Summary and Conclusions page, where you need to make an overall comparison of how each company compares in terms of the major category of ratios described in Financial Statement Analysis appendix in the book and review the slides and video in the Group Project Module. A nice way to conclude is to state which company you think is the better investment and why. I have included the ratios that apply to each of the categories in parentheses. (On the Summary tab of the Excel workbook) Required Ratios for Project Submission 1. Basic Earnings per Share of Common Stock (No calculation needed just the amount) 2. Current Ratio 3. Days Inventory Outstanding (DIO) / Days' sales in inventory 4. Days' Sales Outstanding (DSO) /Days' sale uncollected 5. Accounts Receivable Turnover 6. Inventory Turnover 7. Asset Turnover 8. Debt to Equity Ratio 9. Return on Total Assets (ROA) 10. Gross Profit Margin Ratio 11. Profit Margin Ratio Walmart Inc. Consolidated Statements of Income Fiscal Years Eaded January 2019 2018 2017 5 $ 510,329 4,076 495,761 4.582 481,317 4,556 514,405 500 343 495,873 385301 107.147 21.957 373,395 106.510 20.437 361.25 101.858 22.764 (Amounts in millions, rept in share datal Revenues: kot sales (Use this amount for Net Sales) Membership and other income Total revenues Costs and expenses Cost of sales Operating, selling general and administrative expenses Operating income Interest: Det Capital lease and financing obligations Interest income Interest, net Loss on extinguishment of debt Other (gains) and losse Income before income tales Provision for income taxes Consolidated net income Consolidated net income attributable to moncontrolling interest Consolidated net income attributable to Walmart (Use this amount for Net Income) 1.975 371 217) 1978 352 (152) 2.178 2.044 325 (100 2,267 2.129 3,136 3.368 11.460 15.123 4.600 20,497 6.2014 4.21 10.523 7.179 (509) 6,670 (661) 9,862 14.293 (650 13,643 5 2.38 5 4.40 Net income per common share: Basic set income per common share attributable to Walmart Diluted net income per common share attributable to Walmart 226 3.28 439 Weighted average common shares outstanding Basic Diluted 2.929 2.945 2.995 3,010 3,104 3,112 Dividends declared per common share 5 2655 204 $ 2.00 See accompanying notes 48 and attached Walmart Inc. Consolidated Balance Sheets 4 As of January 2019 2018 7.722 5 44 Amino ASSETS Carretas Cash and cash equivalents Receivable et Invention Prepaid expenses and other Tal current Property and equipment: Property and went Les accumsated depreciation Property and, net Property under capital and Meaning obligations Property under capital and financing obligation Les commutate marination Property under capital and financing obligations, et 6.756 5.61 43789 3:31 59,664 61.97 185,810 (81,493) 15.154 071413) 107.675 104317 12.10 SA 13.70 5 (540) 7.143 7.0T Goodwin Other long term Talants 31,181 142 219.295 1804 11,79 2044521 5 5 5 535 5225 17.000 . LIABILITIES AND EQUITY Curabite Short-brown Access payable Acred liabilities Accrande Long-term del dw within one you Capitale and facing idee within one year Total current les 22.159 438 1.876 22.122 645 3.79 667 77.477 78.52 Long-term debe Long-term capital case and financing obligation Deferred income taxes and other You will need to add all 4 of the liability costs for total labilities 43.520 6,689 11.981 30,045 6720 154 Commitments and concies Equity Connenstock 265 capital in excess of par value Retained caning, 3095 2,965 2.648 90.785 CHI, SA2) 10,181) 72, 496 77,869 Accumulated other comprehensive loss Total Walmart sharcholder's equity (un tus amat for 85,107 Consolidated Statements of Operations (Income Statement) (88) 2018 2017 (millions, except per share data) 2019 As Adjusted As Adjusted Sales (Use this amount for Net Sales) $ 74,433 $ 71,786 $ 69,414 Other revenue 923 928 857 Total revenue 75,356 72,714 70,271 Cost of sales 53,299 51.125 49.145 Selling general and administrative expenses 15,723 15,140 14,217 Depreciation and amortization (exclusive of depreciation included in cost of sales) 2.224 2.225 2,045 Operating income 4,110 4,224 4,864 Net interest expense 461 653 991 Net other (income) expense (27) (59) Earnings from continuing operations before income taxes 3,676 3,630 3,964 746 722 Provision for income taxes 1,295 Net earnings from continuing operations 2,930 2,908 2,666 7 6 Discontinued operations, net of tax 68 Net earnings (Use this amount for Net Income) $ 2,937 $ 2,914 $ 2.734 Basic earnings per share Continuing operations $ 5.54 $ 5.32 $ 4.61 Discontinued operations 0.01 0.01 0.12 Net earnings per share $ 5,55 $ 5.32 $ Diluted earnings per share Continuing operations $ 5.50 $ 5.29 $ 4.58 Discontinued operations 0.01 0.01 0.12 Net earnings per share $ 5.51 $ 5.29 $ 4.60 Weighted average common shares outstanding Basic 528.6 546.8 5776 Diluted 533.2 550.3 582.5 Antidilutive shares 4.1 0,4 Note: Per share amounts may not foot due to rounding. See accompanying Notes to Consolidated Financial Statements Refer to Note 2 regarding the adoption of new accounting standards for revenue recognition, leases, ai pensions 4.72 35 Consolidated Statements of Financial Position (Balance Sheet) February 3 February 2, 2018 (millions, except footnotes) 2019 As Adjusted Assets Cash and cash equivalents $ 1,556 $ 2,643 Inventory 9,497 8,597 Other current assets (Use this amount for Receivables) 1,466 1,300 Total current assets 12,519 12,540 Property and equipment Land 6,064 6,095 Buildings and improvements 29,240 28.131 Fixtures and equipment 5,912 5,623 Computer hardware and software 2,544 2,645 Construction-in-progress 460 440 Accumulated depreciation (18,687) (18,398 Property and equipment, net 25,533 24,536 Operating lease assets 1,965 1,884 Other noncurrent assets 1,273 1,343 Total assets $ 41,290 $ 40,303 Liabilities and shareholders' investment Accounts payable $ 9,761 $ 8,677 Accrued and other current liabilities 4,201 4,094 Current portion of long-term debt and other borrowings 1,052 281 Total current liabilities 15.014 13,052 Long-term debt and other borrowings 10.223 11.117 Noncurrent operating lease liabilities 2,004 1,924 Deferred income taxes 972 693 Other noncurrent liabilities 1.780 1,866 Total noncurrent liabilities You will need to add current and noncurrent 14,979 15,600 Shareholders' investment liabilities for total liabilities Common stock 43 45 Additional paid-in capital 6,042 5,858 Retained earnings 6,017 6.495 Accumulated other comprehensive loss (805) (747) Total shareholders' investment (Use this amount for Equity) 11,297 11,651 Total liabilities and shareholders' investment $ 41,290 $ 40,303 Common Stock Authorized 6,000,000,000 shares, $0.0833 par value; 517,761,600 shares issued and outstanding February 2, 2019, 541,681,670 shares issued and outstanding at February 3, 2018 Preferred Stock Authorized 5,000,000 shares, $0.01 par value, no shares were issued or outstanding at February 2, 20 or February 3, 2018 See accompanying Notes to Consolidated Financial Statements Refer to Note 2 regarding the adoption of new accounting standards for revenue recognition, leases, at pensions is Excel preadsheet to computeration show your computations for all ration on this tab and to include your commentary ancial statements used to calculate these roos are able on the siment per AY Target per fare of Common Stocks.common Ratio Old As given on the statement Carrer Gurbet Inventory cods 31 315014 000 MA 544209 385-501 43 day ays Inventory outstanding (10) als outstanding (10) unts Receivable Turnover tory Turnover turnover 1o Equity Ratio rn on Total Asset (ROA) Profil Margin Ratio et Margin Ratio COGS Argentory ory Turnover COGS Average Inventory $14,026 ime turnover do Equity Ratio mon Total Assets (ROA) Profit Margin Ratio Margin Ratio Summary and Conclusion Page You all get the chance to play the role of financial analyst below. The summary should be a comparison of each company's performance for each major category of ratio liquidity, solvency, and profitability isted below. Focus on major differences as you compare each company's performance. A nice way to conclude is to state which company you feel is the better investment and why Meaning in Anany to Pay Cabin Current ,00, SOM Meaning Turner of ventry and everyone, Rumor. A MedOverall Aty to Pay Dots De toute Measuring ProTROA Gross profe martial argint Conclusion hop