Here you will find some income statements and balance sheets for Sears Holdings (SHLD) and Taget Corp (TGT). Assume that you are a financial manager at Sear and want to compare your firm’s situation with that of Target. Calculate represenatative ratios for liquidity, asset management efficiency, financial leverage (capital structure), and profitability for both Sears and Target. How would you summarize the financial performance of Sears compared to target (its benchmark firm)?Include Sears and Targets current ratio, acid-test ratio, average collection period, accounts receivable turnover, inventory turnover, debt ratio, timed interest earned, total asset turnover, fixed asset turnover, gross profit margin, operating profit margin, net profit margin, operating return on assets, and return on equity. Sears Holdings(SHLD)Target Corp(TGT)Period Ended31-Jan-0931-Jan-09Total revenue$46,770,000$64,948,000Cost of revenue(34,118,000)(44,157,000)Gross profitOperating expenses$12,652,000$20,791,000(12,050,000)(16,389,000)Operating income or loss$602,000(272,000)$4,402,000Interest expense(894,000)Net income$330,000$3,508,000(Click on the icon in order to copy its contents into a spreadsheet.)Sears Holdings(SHLD)Target Corp(TGT)PERIOD ENDING31-Jan-0931-Jan-09Cash and cash equivalents$864,000$1,297,000Accounts receivable9,446,000866,000Inventories6,705,0008,795,000Other current assets473,000458,000Total current assets$17,488,000$11,416,000Long-term investments163,000Property, plant, and equipment25,756,0008,091,000Other assets699,0005,835,000Total assets$44,106,000$25,342,000LiabilitiesAccounts payable$7,366,000$3,430,000Short-/current long-term debt1,262,000787,000Other current liabilities1,884,0004,295,000Total current liabilities$10,512,000$8,512,000Long-term debt17,490,0002,132,000Other long-term liabilities2,392,0005,318,000Total long-term liabilities$19,882,000$7,450,000Total stockholders' equity13,712,0009,380,000Total liabilities and owners' equity$44,106,000$25,342,000(Click on the iconin order to copy its contents into a spreadsheet.)

The current ratio refers to the type of liquidity ratio which evaluates the efficiency of a company…

Answered: hat you are a financial manager at Sear…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Here you will find some income statements and balance sheets for Sears Holdings (SHLD) and Taget Corp (TGT). Assume that you are a financial manager at Sear and want to compare your firm’s situation with that of Target. Calculate represenatative ratios for liquidity, asset management efficiency, financial leverage (capital structure), and profitability for both Sears and Target. How would you summarize the financial performance of Sears compared to target (its benchmark firm)?
1. Include Sears and Targets current ratio, acid-test ratio, average collection period, accounts receivable turnover, inventory turnover, debt ratio, timed interest earned, total asset turnover, fixed asset turnover, gross profit margin, operating profit margin, net profit margin, operating return on assets, and return on equity.

Sears Holdings
(SHLD)
Target Corp
(TGT)
Period Ended
31-Jan-09
31-Jan-09
Total revenue
$46,770,000
$64,948,000
Cost of revenue
(34,118,000)
(44,157,000)
Gross profit
Operating expenses
$12,652,000
$20,791,000
(12,050,000)
(16,389,000)
Operating income or loss
$602,000
(272,000)
$4,402,000
Interest expense
(894,000)
Net income
$330,000
$3,508,000
(Click on the icon in order to copy its contents into a spreadsheet.)
Sears Holdings
(SHLD)
Target Corp
(TGT)
PERIOD ENDING
31-Jan-09
31-Jan-09
Cash and cash equivalents
$864,000
$1,297,000
Accounts receivable
9,446,000
866,000
Inventories
6,705,000
8,795,000
Other current assets
473,000
458,000
Total current assets
$17,488,000
$11,416,000
Long-term investments
163,000
Property, plant, and equipment
25,756,000
8,091,000
Other assets
699,000
5,835,000
Total assets
$44,106,000
$25,342,000
Liabilities
Accounts payable
$7,366,000
$3,430,000
Short-/current long-term debt
1,262,000
787,000
Other current liabilities
1,884,000
4,295,000
Total current liabilities
$10,512,000
$8,512,000
Long-term debt
17,490,000
2,132,000
Other long-term liabilities
2,392,000
5,318,000
Total long-term liabilities
$19,882,000
$7,450,000
Total stockholders' equity
13,712,000
9,380,000
Total liabilities and owners' equity
$44,106,000
$25,342,000
(Click on the icon
in order to copy its contents into a spreadsheet.)

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