Financial Ratios of Walmart and Target

What is the primary concern of major suppliers when deciding to extend credit to a company?

Assessing the company's liquidity

What does the liquidity of a firm measure?

The firm's ability to pay its bills on time

What type of asset can be quickly converted into cash at the current market price?

Liquid asset

Which of the following is NOT a question that can be answered by using ratios?

What is the firm's market capitalization? Signup and view all the answers

What is the primary purpose of analyzing a company's key financial relationships?

To assess the company's liquidity and financial performance Signup and view all the answers

What is the primary purpose of liquidity analysis?

To assess a firm's ability to pay its short-term debts Signup and view all the answers

What is the formula to calculate the Current Ratio?

Current Assets / Current Liabilities Signup and view all the answers

According to Walmart's Income Statement, what is the Operating Income (Earnings Before Interest and Taxes) for the year ending January 31, 2018?

$20,437 Signup and view all the answers

What is the total value of Walmart's Current Assets as of January 31, 2018?

$59,664 Signup and view all the answers

What is the purpose of the Acid Test or Quick Ratio?

To assess a firm's liquidity Signup and view all the answers

What is Walmart's Total Debt as of January 31, 2018?

$80,203 Signup and view all the answers

What is Walmart's current ratio?

0.74 Signup and view all the answers

What is the main difference between the current ratio and the acid test or quick ratio?

The current ratio includes inventory, while the quick ratio excludes it Signup and view all the answers

What is the advantage of using the quick ratio over the current ratio?

It provides a more accurate picture of a company's liquidity Signup and view all the answers

What does the days in receivables or average collection period measure?

The number of days it takes to collect accounts receivable Signup and view all the answers

What is the accounts receivable turnover for Walmart?

35.65 times per year Signup and view all the answers

How does Walmart's liquidity compare to Target's?

Walmart is slightly less liquid than Target Signup and view all the answers