Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Making Business Decisions: Analyzing Wal-Mart's Gross Profit Ratio
You are considering an investment in the common stock of Wal-Mart. The following information is from the consolidated statements of income of Wal-Mart Stores, Inc. and Subsidiaries for the years ended January 31, 2016, and 2015 and the consolidated statements of operations for its competitor Target Corporation for the years ended January 30, 2016, and January 31, 2015 (included in the companies’ Form 10-Ks, amounts in millions of dollars):
Wal-Mart
Target
(in millions)
Year EndedJanuary 31, 2016
Year EndedJanuary 31, 2015
Year EndedJanuary 30, 2016
Year EndedJanuary 31, 2015
Sales*
$478,614
$482,229
$73,785
$72,618
Cost of sales
360,984
365,086
51,997
51,278
*Described as net sales by Wal-Mart.
Required:
1. Calculate the gross profit ratios for Wal-Mart and Target for 2016 and 2015. Enter the amounts as a percent, rounded to one decimal place.
Wal-Mart's 2016 gross…
Making Business Decisions: Analyzing Wal-Mart's Gross Profit Ratio
You are considering an investment in the common stock of Wal-Mart. The following information is from the consolidated statements of income of Wal-Mart Stores, Inc. and Subsidiaries for the years ended January 31, 2016 and 2015 and the consolidated statements of operations for its competitor Target Corporation for the years ended January 30, 2016, and January 31, 2015 (included in the companies’ Form 10-Ks, amounts in millions of dollars):
Wal-Mart
Target
(in millions)
Year EndedJanuary 31, 2016
Year EndedJanuary 31, 2015
Year EndedJanuary 30, 2016
Year EndedJanuary 31, 2015
Sales*
$478,614
$482,229
$73,785
$72,618
Cost of sales
360,984
365,086
51,997
51,278
*Described as net sales by Wal-Mart.
Calculate the gross profit ratios for Wal-Mart and Target for 2016 and 2015. Enter the amounts as a percent, rounded to one decimal place.
The financial statements for Tyler Toys, Inc. are shown in the popup window:
LOADING...
.
Calculate the profit margin, return on assets, and return on equity for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders?
Tyler Toys, Inc.
Income Statement for Years Ending December 31, 2013 and 2014
2014
2013
Revenue
$14,147,690
$13,566,481
Cost of goods sold
$-8,447,054
$-8,131,319
Selling, general, and administrative expenses
$-998,405
$-981,658
Depreciation
$-1,498,619
$-1,472,478
EBIT
$3,203,612
$2,981,026
Interest expense
$-376,184
$-355,975
Taxes
$-1,074,423
$-997,519
Net income
$1,753,005
$1,627,532
Right-click on the table and select Copy to Clipboard and then right-click the
highlighted texts in the popup dialogue box and select Copy in order to paste its…
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