Use the following data in addition to the financial statements provided: • Targe

Question

Use the following data in addition to the financial

statements provided:

• Target market price per share of $72.23 and Wal-Mart market price per

share of $69.12

• Target number of outstanding common shares is 561.7 in millions. (use

the number given)

• Wal-Mart number of outstanding common shares is 3073.19 in millions.

(use the number given)

Important:

The financial calculations should be completed for

2016 only

.

Annual reports provide several prior years information so investors and

creditors can spot trends from year to year. You will not use 2012, 2013, or

2014 information for any of your calculations. You need 2015 for all ratios

that require an average. For example:

(end of year 2015 + end of year 2016) / 2 = average

All ratios should include the numerator, denominator, and answer.

Wal-Mart Stores Inc WMT Income Statement Baiance Sheet Cash Flow Data Type Show Report Dates Osta Scroll ew Rounding Export Pacal yeer ands in anuary per share data 2015-01 203,706 Cash and cash equvale.. Prepald expenses Property, plant and aq… and Property, plant and eq.. Other current liabint… 65,272 Non-currant liabiieie... Total Ron-current llab.. 128,496 Stockholders equity Common stock Total stockholders'eq. Total llabiites and... 81,394 203,706

Explanation / Answer

Note : Some of the target company ratios have not been calculated due to unavailabilty of income statement of the same. So, the comparison of the same is not made.

Ratio Categories Target Walmart Profitability Profit Margin Net Income = 14,694 3% Revenue 4,82,130 Profitability Return on Total Assets Net Income = 14,694 7% Average Total Assets (41,404+40,262)/2 (203,706+199,581)/2 Profitability Return on Common Shareholder's equity Net Income = 14,694 18% Average Common Equity (13,997+12,957)/2 (81,394+80,546)/2 Profitability Earning per share of common stock Net Income - Preferred dividens = 14,694 5 No. Of shares of common stock outstanding 561.7 3073.19 Analyzing Stock PE ratio Price = 72.23 69.12 14 EPS 0 4.781350974 Liquidity Current Ratio Current Assets = 14,130 1.12 60,239 0.9 Current liabilities 12,622 64,619 Profitability Book value per share Total SHE = 12,957 23.1 80,546 26.2 No. Of shares of common stock outstanding 561.7 3073.19 Solvency Debt-to equity ratio Total Debt = (815+11,945) 0.98 (5,453+551+38,214+5,816) 0.6 Total Equity 12,957 80,546 Turnover efficiency Invnetory Turnover COGS = 3,60,984 8.06 Average Inventory (8,790+8,601)/2 (45,141+44,469)/2 Turnover efficiency AR Turnover Revenue = 4,82,130 77.8 Average Receivable (1,122+779)/2 (6,778+5,624)/2

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