Question

The following table gives abbreviated balance sheets and income statements for Walmart. At the end of fiscal 2017, Walmart had 2,970 million shares outstanding with a share price of $110. The company's weighted average cost of capital was about 5%. Assume a tax rate of 35%. Start of Year $ 6,887 43,066 1,961 $ 57, 769 Balance Sheet (figures in $ millions) End of Year Assets Current assets: Cash and marketable securities $ 6,776 Accounts receivable 5,634 Inventories 43,803 Other current assets 3,531 Total current assets $ 59, 744 Fixed assets: Net fixed assets $114,838 Other long-term assets 30,060 Total assets $ 204,642 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 46,112 Other current liabilities 32,449 Total current liabilities $ 78,561 Long-term debt 36,845 Other long-term liabilities 11,327 Total liabilities $126,733 Total shareholders' equity 77,909 Total liabilities and shareholders' equity $ 204,642 $ 114, 198 26,978 $198,945 $ 41,453 25,515 $ 66,968 42,038 12, 101 $121, 107 7,838 $198,945

Answer 1

Computation of Economic value added a Net operating Profit after tones (WNI) 13,958:05 b. Less: Cost of Capital (W.N T) 6304.05 C. Economic value added 6954 Working Notes WNI Net Operating profit after taxes - Particulars Q. Operating Income before tax and Inlegt 20,397 b. Less : Tan @ 35%. 7138-95 C. ΛΙo PAI 13,258.05 W.N.I Capital Employed Particulars a Total Shareholder's Equity b. Add - Long term debt C Add- other long term Liabilitig d. Capital Employed 77,909 36,845 11,327 126,081 W.N. III Cost of Capital = Capital Employed & weighted. Average Cost of Capital = 126081 X 51: 6304.05

bl. Return on Capital Return on Capital - Net Income - Dividendyloo Debt + Equity 13599 - 6144 X 100 126081 tuss x100 196,081 - 5.912.12 · (01) 5-911/