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Analysis of Target and Wal-Mart: compute and compare ratios

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Assignment 5

Selected financial data of Target and Wal-Mart for 2005 are presented here (in millions)

Target Wal-Mart
Corporation Stores, Inc.
Income Statement Data for Year

Net Sales $45,682 $285,222
Cost of goods sold 31,445 219,793
Selling and administrative expenses 10,480 51,354
Interest expense 570 986
Other income (expense) 1,157 2,767
Income tax expense 1,146 5,589
Net income $ 3,198 $ 10,267

Balance Sheet Data (End of Year)

Current assets $ 13,922 $ 38,491
Noncurrent assets 18,371 81,732
Total assets $ 32,293 $ 120,223

Current liabilities $ 8,220 $ 42,888
Long-term debt 11,044 27,939
Total stockholders' equity 13,029 49,396
Total liabilities and stockholders' equity $ 32,293 $ 120,223

Beginning-of-Year Balances

Total assets $31,416 $ 105,405
Total stockholders' equity 11,132 43,623
Current liabilities 8,314 40,364
Total liabilities 20,284 61,782

Other Data

Average net receivables $ 4,845 $ 1,485
Average inventory 4,958 28,030
Net cash provided by operating activities 3,821 15,044

Instructions:
1.- For each company, compute the following ratios:

a. Current.
b. Receivables turnover.
c. Average collection period.
d. Inventory turnover.
e. Days in inventory.
f. Profit margin.
g. Asset turnover
h. Return on assets.
i. Return on common stockholders' equity
j. Debt to total assets.
k. Times interest earned.

2.- Compare the liquidity, solvency and profitability of the two companies.

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