Answered: Selected hypothetical financial data of…

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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Question

Selected hypothetical financial data of Target and Wal-Mart for 2022 are presented here (in millions).

	Target Corporation		Wal-Mart Stores, Inc.
	Income Statement Data for Year
Net sales		$65,300		$417,000
Cost of goods sold		45,000		301,000
Selling and administrative expenses		14,000		79,000
Interest expense		660		1,800
Other income (expense)		(85	)	(380	)
Income tax expense		1,500		7,100
Net income		$ 4,055		$ 27,720

	Balance Sheet Data (End of Year)
Current assets		$16,000		$50,000
Noncurrent assets		27,400		121,000
Total assets		$43,400		$171,000
Current liabilities		$11,000		$54,000
Long-term debt		17,800		43,000
Total stockholders’ equity		14,600		74,000
Total liabilities and stockholders’ equity		$43,400		$171,000

	Beginning-of-Year Balances
Total assets		$45,000		$162,000
Total stockholders’ equity		12,800		66,000
Current liabilities		10,800		54,000
Total liabilities		32,200		96,000

	Other Data
Average net accounts receivable		$7,600		$3,800
Average inventory		7,100		33,200
Net cash provided by operating activities		5,600		27,400
Capital expenditures		1,600		12,100
Dividends		470		4,200

For each company, compute the following ratios. (Round current ratio answers to 2 decimal places, e.g. 15.50, debt to assets ratio and free cash flow answers to 0 decimal places, e.g. 5,275 and all answers to 1 decimal place, e.g. 1.8 or 1.83%.)

	Ratio	Target		Wal-Mart
(1)	Current ratio	enter the current ratio	:1		enter the current ratio	:1
(2)	Accounts receivable turnover	enter accounts receivable turnover in times	times		enter accounts receivable turnover in times	times
(3)	Average collection period	enter average collection period in days	days		enter average collection period in days	days
(4)	Inventory turnover	enter inventory turnover in times	times		enter inventory turnover in times	times
(5)	Days in inventory	enter days in inventory ratio	days		enter days in inventory ratio	days
(6)	Profit margin	enter percentages	%		enter percentages	%
(7)	Asset turnover	enter asset turnover in times	times		enter asset turnover in times	times
(8)	Return on assets	enter percentages	%		enter percentages	%
(9)	Return on common stockholders’ equity	enter percentages	%		enter percentages	%
(10)	Debt to assets ratio	enter percentages	%		enter percentages	%
(11)	Times interest earned	enter times interest earned	times		enter times interest earned	times
(12)	Free cash flow

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