G Briet Exercise 1-6 c secure Suppose selected financial data of Target and Wal-
ID: 2333233 • Letter: G
Question
G Briet Exercise 1-6 c secure Suppose selected financial data of Target and Wal-Mart for 2020 are presented here n milions) Stores, Ine. Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) income tax expense $405,214 304,657 79,607 2,065 (411) 5,583 15,101 (94) 14,335 Balance Sheet Data (End of $18,424 6,109 Noncurrent assets Current liabiinies Long-term debt Total stockhalders equity Total labilities and stockholders equity 122,375 $170,706 55,561 44,089 1,056 170,706 11,327 7,859 163,429 Total stockholders' equity 13,712 10,512 55,390 97,747 Total liablities Average net accounts receivable Averape invertory Net cash provided by operating activities Capital expenditures 6,942 1,729 4,217 For eac, company, compute the following ratios (Enter free cash now in milions. Round Current ratio to 2 decimal places, .g. answers to 1 deci nal place, e.g. 1.6, or 1.6%, use 365 days for calculation.) 1.67. Round Debt to assets o to O decinal places e aore. Round al dheExplanation / Answer
(9) – Return n Common Stockholder’s Equity
Return n Common Stockholder’s Equity = [Net Income / Average Common stockholder’s equity] x 100
TARGET
= [$2,488 / {(13,712 + 15,347)/2}] x 100
= 17.1%
WAL-MART
= [$14,335 / {(65,682 + 71,056)/2}] x 100
= 21%
(11) – Times Interest Earned Ratio
Times Interest Earned Ratio = [Net Income + Income tax Expenses + Interest Expenses] / Interest Expenses
TARGET
= [$2,488 + 1,384 + 707] / 707
= 6.5 Times
(12) – Free Cash Flow
Free Cash Flow = Net Cash Provided by operating activities – Capital Expenditures – Dividend Paid
TARGET
= $5,881 – 1,729 – 496
= $3,656
WAL-MART
= $26,249 - 12,184 – 421
= $13,644
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