Selected hypothetical financial data of Target and Wal-Mart for 2022 are presented here (in millions).

Compute selected ratios, and compare liquidity, profitability, and solvency for two companies.

		Target Corporation		Wal-Mart Stores, Inc.
		Income Statement Data for Year
Net sales		$65,357		$408,214
Cost of goods sold		45,583		304,657
Selling and administrative expenses		15,101		79,607
Interest expense		707		2,065
Other income (expense)		(94)		(411)
Income tax expense		1,384		7,139
Net income		$ 2,488		$ 14,335
		Balance Sheet Data (End of Year)
Current assets		$18,424	$ 48,331
Noncurrent assets		26,109	122,375
Total assets		$44,533	$170,706
Current liabilities		$11,327	$ 55,561
Long-term debt		17,859	44,089
Total stockholders' equity		15,347	71,056
Total liabilities and stockholders' equity		$44,533	$170,706
		Beginning-of-Year Balances
Total assets		$44,106	$163,429
Total stockholders' equity		13,712	65,682
Current liabilities		10,512	55,390
Total liabilities		30,394	97,747
		Other Data
Average net accounts receivable		$7,525	$4,025
Average inventory		6,942	33,836
Net cash provided by operating activities		5,881	26,249
Capital expenditures		1,729	12,184
Dividends		496	4,217

Instructions

a. For each company, compute the following ratios.

• 1. Current ratio.
• 2. Accounts receivable 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 assets ratio.
• 11. Times interest earned.
• 12. Free cash flow.

b. Compare the liquidity, solvency, and profitability of the two companies.