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Compute selected ratios,and compare liquidity, profitability, and solvency for 2 companies.

Selected financial data of target and walmart for 2001 are presented here in millions.
target walmart
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income statement data for year

net sales \$39,176 \$217,799
cost of goods sold \$27,246 \$171,562
expenses
Interest expense \$464 \$1,326
other income expense \$712 \$2,013
income tax expense \$842 \$3,897
_______________________
net income \$1,374 \$6,854

Balance Sheet date(end of yr)

Current assets \$9,648 \$28,246
Non current assets \$14,506 \$55,205
__________________________
total assets \$24,154 \$83,451

Current liabilities \$7,054 \$27,282
long term debt \$9,240 \$21,067
total stockholders equity \$7,860 \$35,102
_________________________
total liabilities&stockholders \$24,154 \$83,451
equity

Beginning of the year balances

Total assets \$19,490 \$78,130
total stockholders equity \$6,519 \$31,343
current liabilities \$6,301 \$28,949
___________________________
total liabilities \$12,971 \$46,787

Other Data
average net \$1,916 \$1,884
receivables
Average inventory \$4,349 \$22,028
Net cash provided
by operating activities \$1,992 \$10,260

Instructions:
a. for each company, compute the following ratios.
1. current
2. receivables turnover
3.average collection period
4. inventory turnover
5. days in inventory
6. profit margin
7. asset turnover
8. return on assets
9. return on common stockholders equity
10. debt to total assets
11. times interest earned
b. compare the liquidity, solvency, and profitability of the two companies.

Solution Summary

Using 2001 amounts, ratios are computed and comparisons discussed.

\$2.19