ACC 556 Strayer Horizontal and Financial Ratio of Sandhill Corporation Questions

Question Description

Current Attempt in Progress

Selected hypothetical financial data of Target and Wal-Mart for 2022 are presented here (in millions).

	Target Corporation		Wal-Mart Stores, Inc.
	Income Statement Data for Year
Net sales		$65,000		$406,000
Cost of goods sold		46,000		306,000
Selling and administrative expenses		14,800		76,000
Interest expense		660		2,200
Other income (expense)		(70	)	(390	)
Income tax expense		1,300		6,500
Net income		$ 2,170		$ 14,910

	Balance Sheet Data (End of Year)
Current assets		$19,000		$49,000
Noncurrent assets		26,100		123,000
Total assets		$45,100		$172,000
Current liabilities		$12,000		$55,000
Long-term debt		17,400		43,000
Total stockholders equity		15,700		74,000
Total liabilities and stockholders equity		$45,100		$172,000

	Beginning-of-Year Balances
Total assets		$45,000		$162,000
Total stockholders equity		12,900		66,000
Current liabilities		10,300		57,000
Total liabilities		32,100		96,000

	Other Data
Average net accounts receivable		$8,000		$3,800
Average inventory		6,800		33,200
Net cash provided by operating activities		5,900		27,400
Capital expenditures		1,700		11,600
Dividends		510		4,200

For each company, compute the following ratios. (Round current ratio answers to 2 decimal places, e.g. 15.50, debt to assets ratio and free cash flow answers to 0 decimal places, e.g. 5,275 and all answers to 1 decimal place, e.g. 1.8 or 1.83%.)

	Ratio	Target		Wal-Mart
(1)	Current ratio	enter the current ratio	:1		enter the current ratio	:1
(2)	Accounts receivable turnover	enter accounts receivable turnover in times	times		enter accounts receivable turnover in times	times
(3)	Average collection period	enter average collection period in days	days		enter average collection period in days	days
(4)	Inventory turnover	enter inventory turnover in times	times		enter inventory turnover in times	times
(5)	Days in inventory	enter days in inventory ratio	days		enter days in inventory ratio	days
(6)	Profit margin	enter percentages	%		enter percentages	%
(7)	Asset turnover	enter asset turnover in times	times		enter asset turnover in times	times
(8)	Return on assets	enter percentages	%		enter percentages	%
(9)	Return on common stockholders equity	enter percentages	%		enter percentages	%
(10)	Debt to assets ratio	enter percentages	%		enter percentages	%
(11)	Times interest earned	enter times interest earned	times		enter times interest earned	times
(12)	Free cash flow	$enter a dollar amount			$enter a dollar amount

Current Attempt in Progress

Here are the comparative income statements of Sandhill Corporation.

SANDHILL CORPORATION Comparative Income Statement For the Years Ended December 31

	2022	2021
Net sales	$628,300	$531,300
Cost of goods sold	456,400	409,900
Gross Profit	171,900	121,400
Operating expenses	71,400	41,100
Net income	$ 100,500	$ 80,300

(a)

Prepare a horizontal analysis of the income statement data for Sandhill Corporation, using 2021 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)

SANDHILL CORPORATION Comparative Income Statement choose the accounting period
			Increase or (Decrease) During 2022
	2022	2021	Amount	Percentage
Net sales	$628,300	$531,300	$enter a dollar amount	enter percentages rounded to 1 decimal place	%
Cost of goods sold	456,400	409,900	enter a dollar amount	enter percentages rounded to 1 decimal place	%
Gross Profit	171,900	121,400	enter a dollar amount	enter percentages rounded to 1 decimal place	%
Operating expenses	71,400	41,100	enter a dollar amount	enter percentages rounded to 1 decimal place	%
Net income	$ 100,500	$ 80,300	$enter a dollar amount	enter percentages rounded to 1 decimal place	%

(b)

Prepare a vertical analysis of the income statement data for Sandhill Corporation for both years. (Round percentages to 1 decimal place, e.g. 12.1%.)

SANDHILL CORPORATION Condensed Income Statements choose the accounting period
	2022	2021
	$	Percent		$		Percent
Net sales	$628,300	enter percentages rounded to 1 decimal place	%		$531,300		enter percentages rounded to 1 decimal place	%
Cost of goods sold	456,400	enter percentages rounded to 1 decimal place	%		409,900		enter percentages rounded to 1 decimal place	%
Gross Profit	171,900	enter percentages rounded to 1 decimal place	%		121,400		enter percentages rounded to 1 decimal place	%
Operating expenses	71,400	enter percentages rounded to 1 decimal place	%		41,100		enter percentages rounded to 1 decimal place	%
Net income	$ 100,500	enter percentages rounded to 1 decimal place	%		$ 80,300		enter percentages rounded to 1 decimal place	%

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