Based on the ratios calculated in Part 1, you will perform a ratio-based analysis. You should divide your discussion into four parts: liquidity, solvency, operational efficiency, and profitability. Ensure to choose the right ratios to discuss a specific part. -Find the relationships among ratios and trends over the three years compared. Also, compare these relationships and trends with those of Target. -In the last part of your discussion, you will show your investment decision: buy or not buy Walmart. You may want to split your investment between two companies. Tell me your rationale for your decision - Your discussion and final investment decision should solely be based on the ratio analysis, although investors also use various non financial information in their investment decision-making.
Based on the ratios calculated in Part 1, you will perform a ratio-based analysis. You should divide your discussion into four parts: liquidity, solvency, operational efficiency, and profitability. Ensure to choose the right ratios to discuss a specific part. -Find the relationships among ratios and trends over the three years compared. Also, compare these relationships and trends with those of Target. -In the last part of your discussion, you will show your investment decision: buy or not buy Walmart. You may want to split your investment between two companies. Tell me your rationale for your decision - Your discussion and final investment decision should solely be based on the ratio analysis, although investors also use various non financial information in their investment decision-making.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
-Based on the ratios calculated in Part 1, you will perform a ratio-based analysis. You should divide your discussion into four parts: liquidity, solvency, operational efficiency, and profitability. Ensure to choose the right ratios to discuss a specific part.
-Find the relationships among ratios and trends over the three years compared. Also, compare these relationships and trends with those of Target.
-In the last part of your discussion, you will show your investment decision: buy or not buy Walmart. You may want to split your investment between two companies. Tell me your rationale for your decision
- Your discussion and final investment decision should solely be based on the ratio analysis, although investors also use various non financial information in their investment decision-making.
Transcribed Image Text:Walmart
Target
2020
2019
2018
2020
2019
2018
61.806
61.897
59664
12902
12,519
12,540
Current ratio
0.79
0.80
0.76
0.89
0.83
0.96
77790
77,477
78521
14487
15,014
13,052
Working capital (in Millions)
61806-77790
-15984
61897-77477
-15580
59664-78521
-18857
-1,585
-2,495
-512
394605
385301
373396
66,177
54,864
53,299
Inventory turnover
5.94
5.85
5.72
4.73
4.11
3.86
66,487
65917.5
65306
13,993
13345.5
13795.5
365
365
365
365
365
365
Days in inventory
41.01
62.44
63.84
77.18
88.79
94.47
8.9
5.8452611
5.71763697
4.729293
4.111
3.8635062
519926
510329
495761
4368
3281
2937
Accounts receivable turnover
82.74
85.79
86.6
7.74
7.55
7.09
6283.5
5948.5
5724.5
564.5
434.5
414
365
365
365
365
365
365
Average collection period
4.41
4.26
4.21
47.17
48.34
49.72
82.74
85.76
86.6
7.7378
7.55
7.34
Paste
49076
33783
30,946
29,993
41,290
45396
28.652
Debt to assets ratio
0.21
0.21
0.17
0.723
0.726
0.71
236495
219215
204522
42,779
40,303
15201
-7179
10523
4,268
3,281
2.937
Return on Assets
0.06
-0.03
0.05
0.099
0.079
0.073
236495
219215
204522
42,779
41,290
40,303
519926
510329
495761
Asset turnover
2.28
2.41
2.46
227895
211909
201673.5
Return on equity
15201-6048
-13281
10523-6124
4368
3281
2937
0.12
-0.18
0.06
0.37
0.29
0.25
(or common stockholders' equity)
74669
72496
77869
11833
11297
11651
15201
-7179
10523
-16
2
27
Profit margin
0.03
-0.01
0.02
-0.00017
0.00012
0.00036
519926
510329
495761
92400
77130
74433
523946-394605
514405-385301
500343-373396
4368
3281
2937
Gross profit rate
0.25
0.25
0.26
0.05
0.04
0.04
519926
510329
495761
92400
77130
74433
15201
-7179
10523
Earnings per share
5.33
-2.45
3.51
$8.72
$6.42
$5.55
2850
2929
2995
6048
6102
6124
2937
3281
4368
Payout ratio
0.4
-0.85
0.58
2.2
2.4
3.25
15201
-7179
10523
1335
1330
1343
25,255-6,315
27,753-6,034
28,337-5,680
10,525-2,649
7,099-3,027
5,970-3,516
Free Cash Flows (in Millions)
12,892
15,617
16,533
6,533
2,742
11,119
-6,048
-6,102
-6,124
-1,343
-1,330
-1,335
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education