ACC 280 / XACC 280
Axia College of University of Phoenix (UoP)
Principles of Accounting
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.
ACC 280 / XACC 280 Solution
Help in ACC 280
Help in XACC 280
Problem 15-5 (P15-5) 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
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
(a) For each company, compute the following ratios.
(1) Current. (7) Asset turnover.
(2) Receivables turnover. (8) Return on assets.
(3) Average collection period. (9) Return on common stockholders’ equity.
(4) Inventory turnover. (10) Debt to total assets.
(5) Days in inventory. (11) Times interest earned.
(6) Profit margin.
(b) Compare the liquidity, solvency, and profitability of the two companies.
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