QUESTION 3 Using the Walmart annual report posted in Blackboard, calculate the f

Question

QUESTION 3 Using the Walmart annual report posted in Blackboard, calculate the following ratios as of Walmart's most recent fiscal year (year ending January 31.2014 Using "cost of sales", what was Walmart's inventory turnover. Provide your answer in the following format only xx.x What was Walmart's debt ratio? Provide your answer in the following format only xxx% What was Walmart's dividend payout ratio (use "Diluted net income per common share attributable to Walmart as the denominator in this equation)? Provide your answer in the following format only xxx%

Explanation / Answer

A) INVENTORY TURNOVER IS A RATIO WHICH SHOWS THE NUMBER OF TIMES THE INVENTORY OF THE COMPANY IS SOLD OUT.

INVENTORY TURNOVER = COST OF SALES / AVERAGE INVENTORY

AVERAGE INVENTORY= OPENING INVENTORY + CLOSING INVENTORY / 2

= 43803 + 44858 / 2

= 44331

INVENTORY TURNOVER = 358069 / 44331

= 8.07 TIMES

B) DEBT RATIO IS CALCULATED BY DIVIDING TOTAL DEBT BY TOTAL ASSET

CALCULATION OF TOTAL DEBT  

LONG TERM DEBT 41771

LONG TERM OBLIGATION UNDER CAPITAL LEASE 2788

DEFFERED INCOME TAX AND OTHER 8017

REDEEMABLE NONCONTROLING INTEREST 1491

TOTAL DEBT $ 54067

TOTAL ASSET IS GIVEN AS $ 204751

DEBT RATIO = 54067/204751

= 0.264 OR 26.4%

C) DIVIDEND PAYOUT RATIO

IT IS CALCULATED BY DIVIDING DIVIDEND PER SHARE BY EARNING PER SHARE.

DIVIDEND PAYOUT RATIO= 1.88 / 4.85

=0.387 OR 38.7%

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