Ratios Case Study Example | Topics and Well Written Essays - 250 words

Ratios - Case knowledge ExampleFurther more, the times interest earned ratios computed above implies Wal-Mart has a better fiscal position of serving interest obligations compared to Target stool. The times interest earned ratios indicate the WAL-Mart has the content of servicing the interest outlay by 12 times using earnings before interest and taxes (EBIT) while Target has capacity of 8.7 times (Brigham & Houston, 2010). Consequently, the solvency financial position of Wal-Mart Corporation is better compared to that of Target Corporation.However, the profit margin ratios reflect the financial performance of Target is better compared to that of Wal-Mart Corporation. The profit margin ratios indicate the Target Corporation in 2014 was fit to furnish gross profit worth 0.29 cents of dollars for every one dollar of sales revenue generated. In contrast, the Wal-Mart was able to generate 0.24 cents of gross profit for every one dollar generated (Maynard, 2013). Thus, the Target C orporation was more profitable compared to the Wal-Mart Corporation. However, the efficiency of WAL-Mart management in utilizing the assets to generate sales revenue is higher compared to Target Corporation according to asset turnover ratio. The asset turnover ratios indicate Wal-Marts assets were able to generate $2.38 of sales revenue for every one dollar of asset utilized. In contrast, the Target Corporation was able to generate $1.75 of sales revenue for every one dollar of assets utilized (Brigham & Houston, 2010). Consequently, Wal-Mart Corporation is more efficient in utilizing assets compared to Target