Romeo Unit 1: Chapter 13 Assignment xWileyPLUS ? Secure | https://edugen.wileypl
ID: 2400872 • Letter: R
Question
Romeo Unit 1: Chapter 13 Assignment xWileyPLUS ? Secure | https://edugen.wileyplus.com/edugen/ti/main.uni Kimmel, Accounting, 6e Help I System Announcements CALCULATOR PRINTER VERSION BACK NEXT Problem 13-5A L/ Your answer is partially correct. Try again. Suppose selected financial data of Target and Wal-Mart for 2017 are presented here (in millions). Wal-Mart Stores, Inc. Target Income Statement Data for Year Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense Net income $66,700 46,000 14,700 650 $409,000 306,000 76,000 1,800 (95) (420) 1,400 3,855 7,200 17,580 Balance Sheet Data (End of Year) Current assets Noncurrent assets Total assets Current liabilities Long-term debt Total stockholders' equity Total liabilities and stockholders $19,000 25,600 $44,600 $10,000 18,200 16,400 $48,000 120,000 $168,000 $55,000 44,000 69,000Explanation / Answer
Answer to Part 9.
Target Corporation:
Return on Common Stockholders’ Equity = Net Income / Average Common Stockholders’ Equity
Average Common Stockholders’ Equity = (13,500 + 16,400) / 2
Average Common Stockholders’ Equity = $14,950
Return on Common Stockholders’ Equity = 3,855 / 14,950
Return on Common Stockholders’ Equity = 0.2579 or 25.79%
Answer to Part 10.
Debt to Assets Ratio= Total Debt / Total Assets
Target Corporation:
Total Debt = Current Liabilities + Long Term Debt
Total Debt = $10,000 + $18,200 = $28,200
Debt to Assets Ratio= 28,200 / 44,600
Debt to Assets Ratio= 0.6323 or 63.23%
Wal-Mart Stores, Inc.:
Total Debt = Current Liabilities + Long Term Debt
Total Debt = $55,000 + $44,000 = $99,000
Debt to Assets Ratio= 99,000 / 168,000
Debt to Assets Ratio= 0.5893 or 58.93%
Answer to Part 11.
Times Interest Earned = EBIT / Interest Expense
Target Corporation:
Earning before Interest and Taxes (EBIT) = Net Income + Income Tax Expenses + Interest Expense
Earning before Interest and Taxes (EBIT) = $3,855 + $1,400 + $650
Earning before Interest and Taxes (EBIT) = $5,905
Times Interest Earned = 5,905 / 650
Times Interest Earned = 9.08 times
Wal-Mart Stores, Inc.:
Earning before Interest and Taxes (EBIT) = Net Income + Income Tax Expenses + Interest Expense
Earning before Interest and Taxes (EBIT) = $17,580 + $7,200 + $1,800
Earning before Interest and Taxes (EBIT) = $26,580
Times Interest Earned = 26,580 / 1,800
Times Interest Earned = 14.77 times
Answer to Part 12.
Free cash Flow = Net Cash flow from Operating Activities – Capital Expenditure - Dividends
Target Corporation:
Free Cash Flow = $5,600 - $1,800 - $460
Free Cash Flow = $3,340
Wal-Mart Stores, Inc.:
Free Cash Flow = $26,800 - $12,400 - $4,500
Free Cash Flow = $9,900
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.