B301 Sears vs Wal-Mart starting spreadsheet 1901

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Brigham Young University, Idaho *

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301

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Accounting

Date

Feb 20, 2024

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xlsx

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Uploaded by ConstableMetal15909 on coursehero.com

SEARS AND WALMART This exercise is about computing ratios and matching ratio values to a particular strategy of Sears and Wal-Ma STEP 1: Compute all the ratio values in the blue areas for both companies. STEP 2: Write in the green boxes in Column L, on the same row as each ratio, how the strategies of Sears and Exhibit 3 Sears, Roebuck and Co., 1997 Financial Statements FORECASTING RATIOS COGS, as a percent of sales 73.6% Selling, General Expense, as a percent of sales 20.2% Days of Inventory 68.8 Days of Receivables 178.3 Days of Payables (COGS Expense) 90.5 Percent Debt Financing 69.0% PERFORMANCE RATIOS Return on Equity 20.3% Return on Assets 3.1% Return on Sales 3.3% Statement of Income (millions, fiscal years ended December 31) 1997 Revenues Merchandise sales and services $ 36,371 Credit revenues $ 4,925 Total revenues $ 41,296 Costs and expenses Cost of sales, buying and occupancy $ 26,769 Selling and administrative $ 8,331 Provision for uncollectible accounts $ 1,532 Depreciation and amortization $ 786 Interest $ 1,409 Reaffirmation charge $ 475 Total costs and expenses $ 39,302

Operating income $ 1,994 Other income $ 106 Income before income taxes $ 2,100 Income taxes $ 912 Income from continuing operations $ 1,188 Discontinued operations $ - Net income $ 1,188 Balance Sheet (millions, fiscal year ended December 31) 1997 Assets Current assets Cash and cash equivalents $ 358 Retained interest in transferred credit card receivables $ 3,316 Credit card receivables $ 20,956 Less: Allowance for uncollectible accounts $ 1,113 $ 19,843 Other receivables $ 335 Merchandise inventories $ 5,044 Prepaid expenses and deferred charges $ 956 Deferred income taxes $ 830 Total current assets $ 30,682 Property and equipment Land $ 487 Buildings and improvements $ 5,420 Furniture, fixtures and equipment $ 4,919 Capitalized leases $ 498 $ 11,324 Less accumulated depreciation $ 4,910 Total property and equipment, net $ 6,414 Deferred income taxes $ 666 Other assets $ 938 Total assets $ 38,700 Liabilities Current liabilities Short-term borrowings $ 5,208 Current portion of LT debt and capitalized $ 2,561 Accounts payable and other liabilities $ 6,637 Unearned revenues $ 830

Other taxes $ 554 Total current liabilities $ 15,790 Long-term debt and capitalized lease obligations $ 13,071 Postretirement benefits $ 2,564 Minority interest and other liabilities $ 1,413 Total liabilities $ 32,838 Shareholders’ equity Common shares ($.75 par value, 1000 shares authorized 390.9 and 391.4 shares outstanding) $ 323 Capital in excess of par value $ 3,598 Retained income $ 4,158 Treasury stock-at cost $ (1,702) Minimum pension liability $ (217) Deferred ESOP expense $ (204) Cumulative translation adjustments $ (94) Total shareholders’ equity $ 5,862 Total liabilities and shareholders’ equity $ 38,700

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