Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please explain answers in detail. Selected financial data of two competitors, Target and Wal-Mart, are presented here. (All dollars are in millions.) Suppose the data

image text in transcribedimage text in transcribed

Please explain answers in detail.

Selected financial data of two competitors, Target and Wal-Mart, are presented here. (All dollars are in millions.) Suppose the data were taken from the 2022 financial statements of each company. Target (1/31/22) Wal-Mart (1/31/22) Income Statement Data for Year Net sales $69,000 $425,000 Cost of goods sold 46,230 297,500 Selling and administrative expenses 17,250 72,250 Interest expense 690 4,250 Other income 30 4,100 Income taxes 1,701 19,285 Net income $3,159 $ 35,815 Target Wal-Mart Balance Sheet Data (End of Year) Current assets $18,240 $ 40,700 Noncurrent assets 31,000 117,000 Total assets $49,240 $157,700 Current liabilities $12,000 $ 55,000 Long-term liabilities 22,468 42,774 Totaltoclcboldoret 14 772 50 026 14.772 59,926 Total stockholders' equity Total liabilities and stockholders' equity $49,240 $157,700 Net cash provided by operating activities $4,700 $23,600 Cash paid for capital expenditures $3,500 $12,000 Dividends declared and paid on common stock $550 $3,400 Weighted average common shares outstanding (millions) 780 4,940 For each company, compute these values and ratios. (All dollars are in millions.) (Round Current ratio and Earnings per share to 2 decimal places, eg. 15.25 and Debt to assets ratio to 1 decimal place, e.g. 78.9%. If answer is negative enter it with a negative sign preceding the number eg.-15,000 or in parentheses eg. (15,000).) Target Wal-Mart (a) Working capital 6,240 -14,300 (b) Current ratio 1.52 0.74 (c) Debt to assets ratio (d) Free cash flow $ 650 $ 8,200 (e) Earnings per share $ (f) Which company has better liquidity? Which company has better solvency

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Case Studies In Strategic ManagementHow Executive Input Enables Students Development

Authors: Gunther Friedl, Andreas Biagosch

1st Edition

3319955543, 9783319955544

More Books

Students also viewed these Accounting questions

Question

2. Be sure to make eye contact with the students.

Answered: 1 week ago