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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 $66,800 $406,000
Cost of goods sold 45,000 305,000
Selling and administrative expenses 14,400 78,000
Interest expense 690 2,000
Other income (expense) (75 ) (420 )
Income tax expense 1,300 6,900
Net income $ 5,335 $ 13,680
Balance Sheet Data
(End of Year)
Current assets $19,000 $48,000
Noncurrent assets 27,300 121,000
Total assets $46,300 $169,000
Current liabilities $12,000 $55,000
Long-term debt 17,500 44,000
Total stockholders’ equity 16,800 70,000
Total liabilities and stockholders’ equity $46,300 $169,000
Beginning-of-Year Balances
Total assets $45,000 $164,000
Total stockholders’ equity 13,800 66,000
Current liabilities 10,800 57,000
Total liabilities 31,200 98,000
Other Data
Average net accounts receivable $8,000 $4,100
Average inventory 7,100 34,000
Net cash provided by operating activities 6,000 25,800
Capital expenditures 1,800 11,500
Dividends 450 3,700
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 $enter a dollar amount $enter a dollar amount
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Here are the comparative income statements of Sunland Corporation.
SUNLAND CORPORATION
Comparative Income Statement
For the Years Ended December 31
2022 2021
Net sales $632,600 $548,500
Cost of goods sold 447,800 405,900
Gross Profit 184,800 142,600
Operating expenses 76,500 42,900
Net income $ 108,300 $ 99,700
(a)
Prepare a horizontal analysis of the income statement data for Sunland Corporation, using 2021 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)
SUNLAND CORPORATION
Comparative Income Statement
choose the accounting period
Increase or (Decrease) During 2022
2022 2021 Amount Percentage
Net sales $632,600 $548,500 $enter a dollar amount enter percentages rounded to 1 decimal place %
Cost of goods sold 447,800 405,900 enter a dollar amount enter percentages rounded to 1 decimal place %
Gross Profit 184,800 142,600 enter a dollar amount enter percentages rounded to 1 decimal place %
Operating expenses 76,500 42,900 enter a dollar amount enter percentages rounded to 1 decimal place %
Net income $ 108,300 $ 99,700 $enter a dollar amount enter percentages rounded to 1 decimal place %
(b)
Prepare a vertical analysis of the income statement data for Sunland Corporation for both years. (Round percentages to 1 decimal place, e.g. 12.1%.)
SUNLAND CORPORATION
Condensed Income Statements
choose the accounting period
2022 2021
$ Percent $ Percent
Net sales $632,600 enter percentages rounded to 1 decimal place % $548,500 enter percentages rounded to 1 decimal place %
Cost of goods sold 447,800 enter percentages rounded to 1 decimal place % 405,900 enter percentages rounded to 1 decimal place %
Gross Profit 184,800 enter percentages rounded to 1 decimal place % 142,600 enter percentages rounded to 1 decimal place %
Operating expenses 76,500 enter percentages rounded to 1 decimal place % 42,900 enter percentages rounded to 1 decimal place %
Net income $ 108,300 enter percentages rounded to 1 decimal place % $ 99,700 enter percentages rounded to 1 decimal place %
