*Problem 13-5A Your answer is partially correct. Try again Suppose selected fina
ID: 2597095 • Letter: #
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*Problem 13-5A Your answer is partially correct. Try again Suppose selected financial data of Target and Wal-Mart for 2019 are presented here (in millions) Target Corporation Wal-Mart Stores, Inc. 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 $66,500 44,000 15,100 730 (80) 1,300 $5,290 $407,000 310,000 79,000 1,900 380) 6,700 $9,020 Balance Sheet Data (End of Year) Current assets Noncurrent assets Total assets Current liabilities Long-term debt Total stockholders' equity Total liabilities and stockholders' equity $19,000 25,500 $44,500 $10,000 17,200 17,300 $44,500 $50,000 123,000 $173,000 $56,000 44,000 73,000 $173,000 Beginning-of-Year Balances Total assets Total stockholders' equity Current liabilities Total liabilities $44,000 14,500 10,600 29,500 $165,000 64,000 58,000 101,000 Other Data Average net accounts receivable Average inventory Net cash provided by operating activities Capital expenditures Dividends $8,000 6,900 5,800 1,600 490 $4,200 34,300 26,300 11,700 4,400Explanation / Answer
66500/44250*=1.50
*(44000+44500)/2=44250
407000/169000*=2.41
*(165000+173000)/2=169000
5290/15900*=33.27%
*(14500+17300)/2=15900
9020/68500*=13.17%
*(64000+73000)/2=68500
Formula Target Wal-Mart 1) Current ratio = Current Asset/Current Liablities 19000/10000=1.90 50000/56000=0.89 2) Account Receivable Turnover Ratio=Net Credit Sales/Average Accounts Receivable 66500/8000=8.31 407000/4200=96.90 3) Number of days’ sales in receivables = 365/Account Receivable Turnover Ratio 365/8.31=43.91 days 365/96.90=3.77 days 4) Inventory turnover= Cost of Goods Sold/Average Inventory 44000/6900=6.38 310000/34300=9.04 5) Number of days’ sales in inventory=Ending Inventory/Cost of Goods Sold*365 (6900/44000)*365=57.24 days (34300/310000)*365=40.39 days 6) Profit margin ratio=Net Income/Net Sales (5290/66500)*100=7.95% (9020/407000)*100=2.22% 7) Asset turnover=Net Sales/Average Total Asset66500/44250*=1.50
*(44000+44500)/2=44250
407000/169000*=2.41
*(165000+173000)/2=169000
8) Return on total assets= Net Income/Average Total Asset (5290/44250)*100=11.95% (9020/169000)*100=5.34% 9) Return on common stockholders’ equity= Net Income-Preferred Dividend/Average common stockholders’ equity5290/15900*=33.27%
*(14500+17300)/2=15900
9020/68500*=13.17%
*(64000+73000)/2=68500
10) Debt to Total Asset Ratio=Total Debt OR Total Liability/Total Assets (10000+17200)/44500=61.12% (56000+44000)/173000=57.80% 11) Times interest earned= Eaning before interest and Tax expense/Interest expense (66500-44000-15100)/730=10.14 times (407000-310000-79000)/1900=9.47 timesRelated Questions
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