Reference no: EM132464087
Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions).
Target Corporation Wal-Mart Stores, Inc.
Income Statement Data for Year
Net sales $65,357 $408,214
Cost of goods sold 45,583 304,657
Selling and administrative expenses 15,101 79,607
Interest expense 7072,065
Other income (expense) (94) (411)
Income tax expense 1,384 7,139
Net income $ 2,488 $ 14,335
Balance Sheet Data (End of Year)
Current assets $18,424 $48,331
Noncurrent assets 26,109 122,375
Total assets $44,533 $170,706
Current liabilities $11,327 $55,561
Long-term debt 17,859 44,089
Total stockholders' equity 15,347 71,056
Total liabilities and stockholders' equit y$44,533 $170,706
Beginning-of-Year Balances
Total assets $44,106 $163,429
Total stockholders' equity 13,712 65,682
Current liabilities 10,512 55,390
Total liabilities 30,394 97,747
Other Data Average net accounts receivable $7,525 $4,025
Average inventory 6,942 33,836
Net cash provided by operating activities 5,881 26,249
Capital expenditures 1,729 12,184
Dividends 4964,217
Ratio Target Wal-Mart
(1)Current ratio1.63:10.87:1
(2)Accounts receivable turnover8.6times101.4times
(3)Average collection period42.0days3.6days
(4)Inventory turnover6.6times9.0times(
5)Days in inventory55.3days40.6days
(6)Profit margin3.8%3.5%
(7)Asset turnover1.5times2.4times
(8)Return on assets5.6%8.6%
(9)Return on common stockholders' equity17.1%21.0%
(10)Debt to assets ratio66%58%
(11)Times interest earned6.5times11.4times
(12)Free cash flow$3,656$9,848
Question 1: Compare the liquidity, solvency, and profitability of the two companies.