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Question

WileyPL aarioa es ??02-chantern suppos selected fin"ndai det, of Tarpet er d wal-Mart for 2017 are presented here 0n nil ns), am2an 65,700 Cost of gsods sold Selins and adminisbative expenses 6,000 Review Score (35 (420) 203 Other ircome (expense) 548,000 168,00 44,00 19,000 Narcumernt assets Current lshlbes Total steckho ders equity 44,600 $1,000 13,200 cal elEs and scoidars 44,600 $168,000 162,003 66,000 13,500 10,500 23,500 7,800 7,000 werege rwentory Capital cxpendturE (a) For each compary, condute tuloin0 ratie6. (Rand arranswers to 2 decimal places, eg. 1.83 or 2.83%..) Current o (2) Accoants receivable tumover 3) Average eellectian period Days in inventery

Explanation / Answer

1.

current ratio = Current assets / cureent liabilities

target corp. = 19000/10000= 1.9 : 1

walmart stores = 48000 / 55000 = .873 : 1

2.

accounts receivable turnover = net credit sales / average accounts receivable

target corp. = 66700 / 7800 = 8.55 times

walmart stores = 409000 / 3900 = 104.87 times

3.

average collection period = 365 / accounts receivable turnover ratio

target corp. = 365 / 8.55 = 42.69 days

walmart stores = 365 / 104.87 = 3.48 days

4.

inventory turnover = cost of goods sold / average inventory

turnover corp. = 46000 / 7000 = 6.57 times

walmart stores = 306000 / 33700 = 9.08 times

5.

days in inventory = 365 / inventory turnover

target corp. = 365 / 6.57 = 55.55 days

walmart stores = 365/9.08 = 40.20 days

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