Measuring Ability to Pay Current Liabilities: Target and Walmart's current ratio have a .03 different meaning that both comapnies have a high chance of paying off their debts if they need arises.
Measuring Turnover: Walmart has the advantage for the inventory turnover and accounts receivable turnover ratios. Walmart turns over their inventory 10.1 times to Target's 6.1 times and Walmart turns over their accounts receivable 4 times to Target's 13.1 times.
Measuring Leverage- Overall Ability to Pay Debts: Target and Walmart have about the same debt to asset ratio with a difference; Walmart has a 63.6% and Target with 62% ratio. Far as the Inventory Turnover
Days' inventory outstanding (DIO)
Asset turnover
Rate of Return on Total Assets (ROA)
Debt Ratio
Times-Interest-Earned Ratio
Dividend Yield
Rate of Return on Common Stockholders' Equity (ROE)
Free cash flow
Price/Earnings Ratio (Multiple) (please see the instructions for the dates to use for this ratio)
Net cash provided by operating activities minus cash payments earmarked for investments in plant assets
2/1/14 EPS as of 2/1/2014
$6,249
$62.99 $0.83
=
=
=
=
$6,249
76
10.7 times $10,959
$10,959 =
$75.75 $4.84
=
16
The higher the current ratio, the more capable the company is of paying their debt.
Lets a company know how fast their products are going off the shelf. A higher turnover is good but a low turnover implies poor sales.
Shows how quickly a company can turn inventory into cash. Decrease is an improvement and increase is a deterioration.
A high rate is considered good, but a low ratio is terrible and a company needs to reexamine their credit policies.
It's best for a company to be able to collect outstanding receivables as quickly as they can. The faster they can turn sales into profit, the better.
Allows a company to pursue opportunities that enhance shareholder value.
Complete one paragraph profiling each company's business including
