Comprehensive analysis of Wal-Mart and Target, compute the four ratios; current ratio, quick ratio, liabilities to...

90.2K

Verified Solution

Question

Accounting

Comprehensive analysis of Wal-Mart and Target, compute the fourratios; current ratio, quick ratio, liabilities to equity, timesearned.
Current Ratio                                2018       2017
Walmart                                       0.75:1    0.86:1
Target                                          0.95:1    0.94:1
Quick Ratio                                 2018       2017
Walmart                                      0.20:1    0.21:1
Target                                         0.29:1    0.28:1
Total liabilities toequity           2018         2017
Walmart    1.62times 1.55times
Target 2.33times 2.41times
Times interestearned                     2018             2017
Walmart                                    7.490.5times   9.659.5times
Target                                        6.475.5times 4.949.5times
-          Whichcompany is more liquid? More solvent?
-          Compare theliabilities to equity ratio, do they differ from the each other andthe industry? why?
-          Do theratios change over time? Why?

Answer & Explanation Solved by verified expert

3.9 Ratings (701 Votes)

Answer 1 More Liquid More Solvent Current Ratio Current ratio explains how many times company carry its current assets Liquid as well as Illiquid as compared to current liabilities It measures a companys ability to pay its short term and long term obligations Current ratio is calculated dividing current assets by current liabilities Higher the current ratio better for company In both the years Target Company is having higher current ratio as compared to Walmart Company Hence Target Company is more solvent as compared to Walmart Company Lets Analyze Quick ratio as well Quick ratio gives a more comprehensive view of companys See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Comprehensive analysis of Wal-Mart and Target, compute the fourratios; current ratio, quick ratio, liabilities to equity, timesearned.Current Ratio 2018 2017Walmart 0.75:1 0.86:1Target 0.95:1 0.94:1Quick Ratio 2018 2017Walmart 0.20:1 0.21:1Target 0.29:1 0.28:1Total liabilities toequity 2018 2017Walmart 1.62times 1.55timesTarget 2.33times 2.41times Times interestearned 2018 2017Walmart 7.490.5times 9.659.5timesTarget 6.475.5times 4.949.5times- Whichcompany is more liquid? More solvent?- Compare theliabilities to equity ratio, do they differ from the each other andthe industry? why?- Do theratios change over time? Why?