Ratio of Target Corporation and Wal-Mart

Ratio of Target Corporation and Wal-Mart

Introduction

Target Corporation

The Target Corporation, initially the Dayton Dry Goods Company and later the Dayton Hudson Corporation, is an American retailing organization, established in 1902 and headquartered in Minneapolis, Minnesota. It is the second-biggest markdown retailer in the United States, Wal-Mart being the biggest. The organization is stacked up 36th on the Fortune 500 starting 2013 and is a part of the Standard & Poor's 500 list. Its bull's-eye trademark is authorized to Wesfarmers, managers of the divide Target Australia affix which is random to Target Corporation.

Wal-Mart

Wal-Mart Stores, Inc. is an American multinational retail enterprise that runs chains of vast markdown assorted shops and warehouse stores. The organization is the planet's second biggest open partnership, as per the Fortune Global 500 record in 2013, the grandest private superintendent on the planet with in excess of two million workers, and is the biggest retailer on the world. Wal-Mart remains a family-claimed business, as the organization is regulated by the Walton family, who own over 50 percent of Wal-Mart. It is likewise one of the world's most profitable organizations.

Ratio calculation

Liquidity

Wal-Mart (2013)

Current Ratio=Current Assets/Current Liability

Current Ratio=59,940/71,818

Quick Ratio= (Current Assets-inventory)/Current liability

Quick Ratio= (59,940-43,803)/71,818

Receivable Turnover ratio=Net credit sales/ Avg Accounts receivable

Receivables Turnover=469,162/6,352.9

Inventory turnover ratio=COGS/Avg Inventory

Inventory Turnover= 352,488/43,803

Target Corporation (2013)

Current Ratio=Current Assets/Current Liability

Current Ratio=16,388/14,031

Quick Ratio= (Current Assets-inventory)/Current liability

Quick Ratio= (16,388-7,903)/14,031

Receivable Turnover ratio=Net credit sales/ Avg Accounts receivable

Receivables Turnover=73,301/5,927

Inventory turnover ratio=COGS/Avg Inventory

Inventory Turnover= 51,035/7910.5

Liquidity Ratios (Jan 2013)

Wal-Mart

Target Corporation

Current ratio

0.83

1.17

Quick ratio

0.20

0.06

Receivables Turnover

73.85

12.36

Inventory turnover

8.04

6.45

Liquidity Ratios (Jan 2012)

Wal-Mart

Target Corporation

Current ratio

0.88

1.15

Quick ratio

0.20

0.47

Receivables Turnover

81.07

11.57

Inventory turnover

8.70

6.23

Liquidity Ratios (Jan 2011)

Wal-Mart

Target Corporation

Current ratio

0.89

1.71

Quick ratio

0.21

0.78

Receivables Turnover

91.38

10.27

Inventory turnover

9.08

6.31

The liquidity measures the ability of company to meet its short term debt. The liquidity of Wal-Mart is decreasing as the current ratio is decreasing from 0.89 in 2011 to 0.83 in 2013. The turnover of inventory is also reducing indicating the negative trend towards liquidity of Wal-Mart. On the other hand Target Corporation shows a higher liquidity ratio as compared to Wal-Mart. This shows that the ability to pay back the debt is higher in Target Corporation. Similarly inventory turnover increased from 6.31 in 2011 to 6.45 in 2013 as it can be analyzed through the ratios calculated for a period of three years.

Profitability

Wal-Mart (2013)

Asset Turnover=Net Sales/Average Total Assets

Asset turnover=469,162/203,105

Profit Margin=Net Profit After tax/ Revenues

Profit Margin=17,756/469,162

ROA=Net Income/Total Assets

ROA=16,999/203,105

ROE= Net Income/Shareholder's Equity

ROE=16,999/76,343

Target Corporation (2013)

Asset Turnover=Net Sales/Average Total Assets

Asset turnover=73,301/48,163

Profit Margin=Net Profit After tax/ Revenues

Profit Margin=2,999/73,301

ROA=Net Income/Total Assets

ROA=2,999/48,163

ROE= Net Income/Shareholder's Equity

ROE=2,999/16,558

Profitability ...