Question

Financial Statements for Walmart Stores Inc. and Macy's Inc. 

Table 3-7 contains the financial results for Walmart and Macy's for 2012. Evaluate the financial performance of each company based on the various metrics discussed in Section 3.1, such as ROE, ROA, profit margin, asset turns, APT, C2C, ART, INVT, and PPET. Can you explain the differences you see in their performance based on their supply chain strategy and structure? Compare the metrics for each company with similar metrics for Amazon and Nordstrom from Table 3-1. Which metrics does each company perform better on? What supply chain drivers and metrics might explain this difference in performance? 

Answer 1

EVALUATING VARIOUS FINANCIAL PERFORMANCE OF A COMPANY 30-01-2013

1) RETURN ON EQUITY (ROE) : ($ MILLIONS )

WALMART ROE = NET INCOME / SHARE HOLDER EQUITY

= $17756 / 76343

= 0.232*100

=23.2%

MACY'S ROE = NET INCOME /SHARE HOLDER EQUITY

=1198 / 6051

= 0.1979

=19.7%

2) RETURN ON ASSETS

WALMART ROA = NET INCOME / AVERAGE TOTAL ASSETS

= $17756/ 203105=0.0875

=8.75%

MACY'S ROA = NET INCOME / TOTAL ASSETS

= $ 1198/20991

= 0.0570

=5.71%

3)NET PROFIT MARGIN :

WALMART NPM = NET INCOME / NET SALES

= $ 17756 /469162

= 0.0378

= 0.0378*100=3.78%

MACY'S NPM = NET INCOME / NET SALES

= $ 1198/27686

=0.0432

= 0.0432*100=4.32%

4) ASSET TURNOVER

WALMART A.TO = NET SALES/ AVERAGE TOTAL ASSETS

= $469162 / 203105

= 2.31

MACY'S A.TO =NET SALES / AVERAGE TOTAL ASSETS

=$ 27686/ 20991

= 1.3189