Posted: July 19th, 2016
Required:
1. Calculate the gross profit ratios for Wal-Mart and Target for 2010 and 2009.
2. Which company appears to be performing better? What factors
might cause the difference in the gross profit ratios of the two
companies? What other information should you consider to
determine how these companies are performing in this regard?
1 Gross profit ratios (dollar amounts in millions):
Step 1:
Gross Profit Formula T
Gross Profit Ratio Formula
T
Step 2:
FY2010 FY2009
WALMART
Sales F F
Cost of Sales F F
Gross Profit C C
Gross Profit Ratio C C
FY2010 FY2009
TARGET
Sales F F
Cost of Sales F F
Gross Profit C C
Gross Profit Ratio C C
2 Rationale:
T
General Instructions
1. The following worksheet may be used to complete the exercise/problem.
You may need to refer to your textbook for additional information.
2. The blue cells are for data entry. Enter text in the T cells, figures in the F cells, calculation in C cells
P5-4A
The following condensed income statements and balance sheets are available for Planter Stores for a two-year period.
(All amounts are stated in thousands of dollars.)
Income Statements FY2012 FY2011
Revenues $ 35,982 $ 26,890
Cost of goods sold 12,594 9,912
Gross profit $ 23,388 $ 16,978
Operating expenses 13,488 10,578
Net income $ 9,900 $ 6,400
Balance Sheets December 31, 2012 December 31, 2011
Cash $ 9,400 $ 4,100
Inventory 4,500 5,400
Other current assets 1,600 1,250
Long-term assets, net 24,500 24,600
Total assets $ 40,000 $ 35,350
Current liabilities 9,380 10,600
Capital stock 18,000 18,000
Retained earnings 12,620 6,750
Total liabilities and stockholders’ equity
$ 40,000 $ 35,350
Before releasing the 2012 annual report, Planter’s controller learns that the inventory of one of the stores
(amounting to $500,000) was counted twice in the December 31, 2011, inventory. The inventory
was correctly counted in the December 31, 2012 inventory.
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