WITH THE INFO PROVIDED ABOVE: COMPLETE PART 2 - INSTRUCTIONS ARE BELOW - IN A WRITTEN FORMAT - THANK YOU!

Part 2: Written Analysis of the Data

Half of the points on this assignment are allocated to the analysis. Writing should have no major errors in usage, grammar, spelling, punctuation, or capitalization. Explanations should include the ratios used with data and language to support your conclusion.

Evaluation method: 1. Highest evaluation provides overwhelming support. (4 to 5 sentence explanation to reach conclusion)

2. Proficient evaluation provides general support. (3 sentences used to explain your answer)

3. Developing evaluation is insufficient support. (less than 2 sentences)

A. Which company appears to be more profitable? Explain your answer and identify which of the ratio(s) from Part 1 you used to reach your conclusion.

B. Which company appears to have the higher level of financial risk? Explain your answer and identify which of the ratio(s) from Part 1 you used to reach your conclusion.

C. Which company appears to be charging higher prices for its goods? Explain your answer and identify which of the ratio(s) from Part 1 you used to reach your conclusion.

D. Which company appears to be the more efficient at using its assets? Explain your answer and identify which of the ratio(s) from Part 1 you used to reach your conclusion.

PART 1 Computing ratios 1) Current ratio Current ratio = current assets / current liabilities Walmart Inc Current ratio =$60,239/$64,619=0.93 times Target Corporation Current ratio =$14,130/$12,622=1.11 times 2) Average days to sell inventory Average days in inventory =365 days / COGS x average inventory Target corporation Average inventory =$8,601+$8,2822=$8,442 Average days in inventory =365$51,997$8,442=59.26 days Walmart Inc Average inventory =$44,805 Average days in inventory =365/$360,984$44,805=45.30 days 3) Debt to assets ratio Walmart Inc Debt to assets ratio = Debt/Total assets Debt to assets ratio =$115,970/$199,581=0.58 times Target corporation Debt to assets ratio =$27,305/$40,262=0.68 times 4) Return on Investment Return on investment = earnings from continuing operations / Average assets Walmart Inc Average assets =$199,581+$203,4902=$201,536 Return on investment =$21,638/$201,536=10.74% Target corporation Average assets =$40,717 Return on investment =$4,923$40,717100=12.09% 5) Gross margin \% Gross margin = Gross profit / Sales 100 Walmart Inc Gross margin =$121,146/$482,130100=25.13% Target corporation Gross margin =$21,788/$73,785100=29.53% 6) Asset Turnover Walmart Inc Asset Turnover = net sales / Average total assets Asset Turnover =$482,130/$201,536=2.39 times Target corporation Asset Turnover =$73,785/$40,717=1.81 times 7) Return on sales Walmart Inc Return on sales = earnings from continuing operations/ Net revenue Return on sales =$21,638/$482,130100=4.49% Target corporation Return on sales =$4,923/$73,785100=6.67% 8) plant assets to long-term debt ratio plant assets to long-term debt ratio = plant assets / Long-term debt Explanation: Plant assets are fixed assets like land, building, and PPE. Walmart Inc Plant assets (PPE)=$110,171 Long term debt =$51,351 Plant to long-term debt ratio =$110,171/$51,351=2.15 times Target Corporation Plant to long term debt ratio =$25,217/$14,683=1.72 times