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 $66,100 $411,000 Cost of goods sold 44,000 302,000 Selling and administrative expenses 15,400 81,000 Interest expense 660 2,100 Other income (expense) (70 ) (420 ) Income tax expense 1,400 7,300 Net income $ 4,570 $ 18,180 Balance Sheet Data (End of Year) Current assets $17,000 $49,000 Noncurrent assets 26,800 120,000 Total assets $43,800 $169,000 Current liabilities $12,000 $54,000 Long-term debt 17,600 45,000 Total stockholders' equity 14,200 70,000 Total liabilities and stockholders' equity $43,800 $169,000 Beginning-of-Year Balances Total assets $43,000 $162,000 Total stockholders' equity 14,400 66,000 Current liabilities 10,600 57,000 Total liabilities 28,600 96,000

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### Hypothetical Financial Data for Target and Wal-Mart Stores in 2022

The table below presents selected hypothetical financial data for Target Corporation and Wal-Mart Stores, Inc. for the year 2022. All figures are in millions of dollars.

#### Income Statement Data for Year

| Account                          | Target Corporation | Wal-Mart Stores, Inc. |
|----------------------------------|-------------------:|----------------------:|
| **Net sales**                    |        $66,100     |          $411,000     |
| **Cost of goods sold**           |         44,000     |           302,000     |
| **Selling and administrative expenses** |         15,400     |            81,000     |
| **Interest expense**             |            660     |             2,100     |
| **Other income (expense)**       |            (70)    |              (420)    |
| **Income tax expense**           |          1,400     |             7,300     |
| **Net income**                   | **$4,570**         | **$18,180**           |

#### Balance Sheet Data (End of Year)

| Account                          | Target Corporation | Wal-Mart Stores, Inc. |
|----------------------------------|-------------------:|----------------------:|
| **Current assets**               |        $17,000     |           $49,000     |
| **Noncurrent assets**            |         26,800     |           120,000     |
| **Total assets**                 | **$43,800**        | **$169,000**          |
| **Current liabilities**          |        $12,000     |           $54,000     |
| **Long-term debt**               |         17,600     |            45,000     |
| **Total stockholders’ equity**   |         14,200     |            70,000     |
| **Total liabilities and stockholders’ equity** | **$43,800** | **$169,000**          |

#### Beginning-of-Year Balances

| Account                          | Target Corporation | Wal-Mart Stores, Inc. |
|----------------------------------|-------------------:|----------------------:|
| **Total assets**                 |        $43,000     |          $162,000     |
| **Total stockholders’ equity**   |         14,400     |
Transcribed Image Text:### Hypothetical Financial Data for Target and Wal-Mart Stores in 2022 The table below presents selected hypothetical financial data for Target Corporation and Wal-Mart Stores, Inc. for the year 2022. All figures are in millions of dollars. #### Income Statement Data for Year | Account | Target Corporation | Wal-Mart Stores, Inc. | |----------------------------------|-------------------:|----------------------:| | **Net sales** | $66,100 | $411,000 | | **Cost of goods sold** | 44,000 | 302,000 | | **Selling and administrative expenses** | 15,400 | 81,000 | | **Interest expense** | 660 | 2,100 | | **Other income (expense)** | (70) | (420) | | **Income tax expense** | 1,400 | 7,300 | | **Net income** | **$4,570** | **$18,180** | #### Balance Sheet Data (End of Year) | Account | Target Corporation | Wal-Mart Stores, Inc. | |----------------------------------|-------------------:|----------------------:| | **Current assets** | $17,000 | $49,000 | | **Noncurrent assets** | 26,800 | 120,000 | | **Total assets** | **$43,800** | **$169,000** | | **Current liabilities** | $12,000 | $54,000 | | **Long-term debt** | 17,600 | 45,000 | | **Total stockholders’ equity** | 14,200 | 70,000 | | **Total liabilities and stockholders’ equity** | **$43,800** | **$169,000** | #### Beginning-of-Year Balances | Account | Target Corporation | Wal-Mart Stores, Inc. | |----------------------------------|-------------------:|----------------------:| | **Total assets** | $43,000 | $162,000 | | **Total stockholders’ equity** | 14,400 |
### Financial Ratio Calculation for Target and Wal-Mart

#### Other Data

| Data | Target | Wal-Mart |
|------|--------|----------|
| Average net accounts receivable | $7,900 | $4,200 |
| Average inventory | 7,200 | 33,700 |
| Net cash provided by operating activities | 5,800 | 26,200 |
| Capital expenditures | 1,700 | 12,400 |
| Dividends | 460 | 3,600 |

#### Instructions for Ratio Calculation
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 other answers to 1 decimal place (e.g., 1.8 or 1.83%).

#### Ratios to be Computed

| Ratio | Target | Wal-Mart |
|-------|--------|----------|
| **(1) Current ratio** | \_\_\_\_\_\_ : 1 | \_\_\_\_\_\_ : 1 |
| **(2) Accounts receivable turnover** | \_\_\_\_\_\_ times | \_\_\_\_\_\_ times |
| **(3) Average collection period** | \_\_\_\_\_\_ days | \_\_\_\_\_\_ days |
| **(4) Inventory turnover** | \_\_\_\_\_\_ times | \_\_\_\_\_\_ times |
| **(5) Days in inventory** | \_\_\_\_\_\_ days | \_\_\_\_\_\_ days |
| **(6) Profit margin** | \_\_\_\_\_\_ % | \_\_\_\_\_\_ % |
| **(7) Asset turnover** | \_\_\_\_\_\_ times | \_\_\_\_\_\_ times |
| **(8) Return on assets** | \_\_\_\_\_\_ % | \_\_\_\_\_\_ % |
| **(9) Return on common stockholders’ equity** | \_\_\_\_\_\_ % | \_\_\_\_\_\_ % |
| **(10) Debt to assets ratio** | \_\_\_\_\_\_ % | \_\_\_\_\_\_ % |
| **(11) Times interest
Transcribed Image Text:### Financial Ratio Calculation for Target and Wal-Mart #### Other Data | Data | Target | Wal-Mart | |------|--------|----------| | Average net accounts receivable | $7,900 | $4,200 | | Average inventory | 7,200 | 33,700 | | Net cash provided by operating activities | 5,800 | 26,200 | | Capital expenditures | 1,700 | 12,400 | | Dividends | 460 | 3,600 | #### Instructions for Ratio Calculation 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 other answers to 1 decimal place (e.g., 1.8 or 1.83%). #### Ratios to be Computed | Ratio | Target | Wal-Mart | |-------|--------|----------| | **(1) Current ratio** | \_\_\_\_\_\_ : 1 | \_\_\_\_\_\_ : 1 | | **(2) Accounts receivable turnover** | \_\_\_\_\_\_ times | \_\_\_\_\_\_ times | | **(3) Average collection period** | \_\_\_\_\_\_ days | \_\_\_\_\_\_ days | | **(4) Inventory turnover** | \_\_\_\_\_\_ times | \_\_\_\_\_\_ times | | **(5) Days in inventory** | \_\_\_\_\_\_ days | \_\_\_\_\_\_ days | | **(6) Profit margin** | \_\_\_\_\_\_ % | \_\_\_\_\_\_ % | | **(7) Asset turnover** | \_\_\_\_\_\_ times | \_\_\_\_\_\_ times | | **(8) Return on assets** | \_\_\_\_\_\_ % | \_\_\_\_\_\_ % | | **(9) Return on common stockholders’ equity** | \_\_\_\_\_\_ % | \_\_\_\_\_\_ % | | **(10) Debt to assets ratio** | \_\_\_\_\_\_ % | \_\_\_\_\_\_ % | | **(11) Times interest
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