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Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions). Target Corporation Wal-Mart Stores, Inc. Income Statement Data for Year
Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions).
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 |
Ratio | Target | Wal-Mart | ||||||||
(1) | Current ratio | 1.63 | :1 | 0.87 | :1 | |||||
(2) | Accounts receivable turnover | 8.6 | times | 101.4 | times | |||||
(3) | Average collection period | 42.0 | days | 3.6 | days | |||||
(4) | Inventory turnover | 6.6 | times | 9.0 | times | |||||
(5) | Days in inventory | 55.3 | days | 40.6 | days | |||||
(6) | Profit margin | 3.8 | % | 3.5 | % | |||||
(7) | Asset turnover | 1.5 | times | 2.4 | times | |||||
(8) | Return on assets | 5.6 | % | 8.6 | % | |||||
(9) | Return on common stockholders equity | 17.1 | % | 21.0 | % | |||||
(10) | Debt to assets ratio | 66 | % | 58 | % | |||||
(11) | Times interest earned | 6.5 | times | 11.4 | times | |||||
(12) | Free cash flow | $3,656 | $9,848 |
(b) Compare the liquidity, solvency, and profitability of the two companies. Interpret the current ratio Type your answer here
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