Question

Table 3-7 contains the financial results for Walmart and Macy’s for 2012. Determine the ROE, ROA, profit margin, asset Turnover, ART, INVT, PPET, C2C for both Walmart and Macy's.

TABLE 3-7 Selected Financial Data for Walmart Stores Inc. and Macy's Inc. Year ended January 31, 2013 (5 millions) Walmart Macy's Net operating revenues 469,162 27,686 Cost of goods sold 352.488 16,538 Gross profit 116,674 11,148 Selling, general, and administrative expense 88,873 8,482 Operating income 27,801 2,661 Interest expense 2,251 425 Other income (loss)-net 187 (134) Income before income taxes 25,737 2,102 Income taxes 7.981 767 Net income 17,756 1,198 Assets Cash and cash equivalents 7,781 1,836 Net receivables 6,768 371 Inventories 43,803 5,308 Total current assets 59,940 7,876 Property, plant, and equipment 116,681 8,196 Goodwill 20,497 3,743 Other assets 5,987 615 Total assets 203,105 20.991 Liabilities and Stockholder Equity Accounts payable 59,099 Short-term debt 12,719 Total current liability 71,818 5.075 Long-term debt 41,417 6,806 Total liabilities 126,243 14.940 Stockholder equity 76,3436 ,051

Answer 1

Answer of Part a:

For Walmart:

Return on Equity = Net Income / Stockholder Equity *100
Return on Equity = $17,756 / $76,343 * 100
Return on Equity = 23.26%

For Macy’s:

Return on Equity = Net Income / Stockholder Equity *100
Return on Equity = $1,198 / $6,051 * 100
Return on Equity = 19.80%

Answer of Part b:

For Walmart:

Return on Assets = Net Income / Total Assets * 100
Return on Assets = $17,756 / $203,105 * 100
Return on Assets = 8.74%

For Macy’s:

Return on Assets = Net Income / Total Assets * 100
Return on Assets = $1,198 / $20,991 * 100
Return on Assets = 5.71%

Answer of Part C:

For Walmart:

Profit Margin = Net income / Sales *100
Profit Margin = $17,756 / $469,162 * 100
Profit Margin = 3.78%

For Macy’s:

Profit Margin = Net income / Sales *100
Profit Margin = $1,198 / $27,686 * 100
Profit Margin = 4.33%

Answer of Part d:

For Walmart:

Asset Turnover = Sales / Total Assets
Asset Turnover = $469,162 / $203,105
Asset Turnover = 2.31 times

Foe Macy’s:

Asset Turnover = Sales / Total Assets
Asset Turnover = $27,686 / $20,991
Asset Turnover = 1.32 times

Answer of Part e:

For Walmart:

Account Receivable Turnover = Sales / Net Receivable
Account Receivable Turnover = $469,162 / $6,768
Accounts Receivable Turnover = 69.32 times

For Macy’s:

Account Receivable Turnover = Sales / Net Receivable
Account Receivable Turnover = $27,686 / $371
Accounts Receivable Turnover = 74.63 times