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…

hat 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 marg

hat 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 marg

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 2P

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Given, Sales : $250,000Costs : $134,000Depreciation : $10,200Operating expenses : $6,000Interest expenses : $20,700Taxes : $18,420Dividends : $10,600Addition to Retained Earnings : $50,080Long term debt repaid : $9,300New Equity issued : $8,470New fixed assets acquired : $15,000 i) Calculate the operating cash flow ii) Calculate the cash flow to creditors
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Revenues Costs of Goods Sold Gross Profit Selling, General and Admin Depreciation EBIT Income tax (35%) Net Income Capital Purchases Changes to NWC A. -$258,750.00 B. -$153,046.63 Year O O C. $195,972.79 O D. $201,324.52 -600,000 +36,000 Year 1 800,000 Year 2 Year 3 800,000 800,000 -320,000 -320,000 -320,000 480,000 480,000 480,000 -105,000 -105,000 -105,000 -200,000 -200,000 -200,000 175,000 175,000 175,000 Cromwell Industries is considering a new project which will have costs, revenues, etc. as shown by the data above. If the cost of capital is 8.5%, what is the net present value (NPV) of this project? -61,250 -61,250 -61,250 113,750 113,750 113,750 -12,000 -12,000 -12,000
Income Statements for the Year Ended 31st Dec 2020 KM Ltd ROW Ltd £'000 £'000 Sales revenue 8,320 11,250 Cost of sales (6,020) (9,030) Gross profit 2,300 2,220 Operating expenses (1,048) (1,535) Operating profit 1,252 685 Finance charges (20) (70) Profit before tax 1,232 615 Taxation (62) (30) Profit for the year 1,170 585 SOFP (Balance Sheet) as at 31st Dec 2020 KM Ltd ROW Ltd £'000 £'000 £'000 £'000 Non-current assets 502 198 Current assets Inventory 1,290 2,437 Trade receivables 730 1,990 2,020 4,427 Total assets 2,522 4,625 Equity Share capital 1,350 800 Reserves 580 1,145 1,930 1,945…
Income Statements for the Year Ended 31st Dec 2020 KM Ltd ROW Ltd £'000 £'000 Sales revenue 8,320 11,250 Cost of sales (6,020) (9,030) Gross profit 2,300 2,220 Operating expenses (1,048) (1,535) Operating profit 1,252 685 Finance charges (20) (70) Profit before tax 1,232 615 Taxation (62) (30) Profit for the year 1,170 585 SOFP (Balance Sheet) as at 31st Dec 2020 KM Ltd ROW Ltd £'000 £'000 £'000 £'000 Non-current assets 502 198 Current assets Inventory 1,290 2,437 Trade receivables 730 1,990 2,020 4,427 Total assets 2,522 4,625 Equity Share capital 1,350 800 Reserves 580 1,145 1,930 1,945…
Income Statements for the Year Ended 31st Dec 2020 KM Ltd ROW Ltd £'000 £'000 Sales revenue 8,320 11,250 Cost of sales (6,020) (9,030) Gross profit 2,300 2,220 Operating expenses (1,048) (1,535) Operating profit 1,252 685 Finance charges (20) (70) Profit before tax 1,232 615 Taxation (62) (30) Profit for the year 1,170 585 SOFP (Balance Sheet) as at 31st Dec 2020 KM Ltd ROW Ltd £'000 £'000 £'000 £'000 Non-current assets 502 198 Current assets Inventory 1,290 2,437 Trade receivables 730 1,990 2,020 4,427 Total assets 2,522 4,625 Equity Share capital 1,350 800 Reserves 580 1,145 1,930 1,945…
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Exercise 5-9 During the next fiscal year ending June 30.2020, Texas Company will make substantial investments in new product lines and in a modernization program. Significant changes to be made during the year are listed below: 1. Equipment with a net book value of P86,000 will be sold during the year. 2. All of the capital stock of Ohio Company will be exchanged with 5,000 shares of Texas Company at a time when the market value is P40 per share. P250,000 cash will also be given as part payment. 3. Bonds having a face value of P1,000,000 will be issued on June 30, 2020 at 98%. 4. Trading securities carried at market value of P200,000 will be sold for P215,000. 5. New equipment will be purchased during the year. 6. A new building will be purchased at a cost of P1,000,000, although there are no building retirements. 7. Cash dividends will be paid to stockholders. The financial statements forccast for the year ended June 30, 2020 are given next page:
Exercise 5-9 During the next fiscal year ending June 30, 2020, Texas Company will make substantial investments in new product lines and in a modernization program. Significant changes to be made during the year are listed below: 1. Equipment with a net book value of P86,000 will be sold during the year. 2. All of the capital stock of Ohio Company will be exchanged with 5,000 shares of Texas Company at a time when the market value is P40 per share. P250,000 cash will also be given as part payment. 3. Bonds having a face value of P1,000,000 will be issued on June 30, 2020 at 4. Trading securities carried at market value of P200,000 will be sold for P215,000. 5. New equipment will be purchased during the year. 6. A new building will be purchased at a cost of P1,000,000, although there are no building retirements. 7. Cash dividends will be paid to stockholders. The financial statements forccast for the year ended June 30, 2020 are given next page:
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