Selected financial data of two competitors, Target and Wal-Mart, are presented here. (All dollars are in millions.)
|
Target
|
Wal-Mart
|
|
1/31/09)
|
(1/31/09)
|
|
Income Statement Data for Year
|
|
Net sales
|
$64,948
|
$401,244
|
|
Cost of goods sold
|
44,157
|
306,158
|
|
Selling and administrative expenses
|
16,389
|
76,651
|
|
Interest expense
|
894
|
2,103
|
|
Other income
|
28
|
4,213
|
|
Income taxes
|
1,322
|
7,145
|
|
Net income
|
$ 2,214
|
$ 13,400
|
|
Target
|
Wal-Mart
|
|
Balance Sheet Data (End of Year)
|
|
Current assets
|
$17,488
|
$ 48,949
|
|
Noncurrent assets
|
26,618
|
114,480
|
|
Total assets
|
$44,106
|
$163,429
|
|
Current liabilities
|
$10,512
|
$ 55,390
|
|
Long-term debt
|
19,882
|
42,754
|
|
Total stockholders" equity
|
13,712
|
65,285
|
|
Total liabilities and stockholders" equity
|
$44,106
|
$163,429
|
|
Cash from operating activities
|
$4,430
|
$23,147
|
|
Cash paid for capital expenditures
|
3,547
|
11,499
|
|
Dividends declared and paid on common stock
|
465
|
3,746
|
|
Average shares outstanding (millions)
|
774
|
3,951
|
Instructions
For each company, compute these values and ratios.
(a) Working capital.
(b) Current ratio.
(c) Debt to total assets ratio.
(d) Free cash flow.
(e) Earnings per share.
(f) Compare the liquidity and solvency of the two companies.