Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Wal-Mart (WMT) is the largest retailer in the United States. Amazon and Wal-Mart compete in similar markets; however, Wal-Mart sells through both traditional retail stores and the Internet, while Amazon sells only through the Internet. Earnings and common stock outstanding information was obtained from recent financial statements for both companies as follows (in millions): Amazon Wal-Mart Net income $2,371 $14,694 Average number of common shares outstanding 474 3,207 a. Determine the earnings per share for each company. Neither company had preferred stock outstanding. Round your answers to two decimal places. Amazon $ Wal-Mart $ b. Which company appears more profitable from an earnings-per-share perspective? c. The market price of Amazon common stock was $750 per share at a time when Wal-Mart’s was $69 per share. How would you explain this difference in market price given the earnings per share computed in (a) for both companies?

Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Wal-Mart (WMT) is the largest retailer in the United States. Amazon and Wal-Mart compete in similar markets; however, Wal-Mart sells through both traditional retail stores and the Internet, while Amazon sells only through the Internet. Earnings and common stock outstanding information was obtained from recent financial statements for both companies as follows (in millions): Amazon Wal-Mart Net income $2,371 $14,694 Average number of common shares outstanding 474 3,207 a. Determine the earnings per share for each company. Neither company had preferred stock outstanding. Round your answers to two decimal places. Amazon $ Wal-Mart $ b. Which company appears more profitable from an earnings-per-share perspective? c. The market price of Amazon common stock was $750 per share at a time when Wal-Mart’s was $69 per share. How would you explain this difference in market price given the earnings per share computed in (a) for both companies?

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter1: Introduction To Accounting And Business

Section: Chapter Questions

Problem 1MAD

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Amazon.com, inc. is one of the largest Internet retailers in the world. Wal-Mart is the largest retailer in the United States. Amazon and Wal-Mart compete in similar markets; however, Wal-Mart sells through both traditional retail stores and the Internet, while Amazon sells only through the Internet. Earnings and Common Stock Outstanding information was obtained from recent financial statements for both companies as follows (in million): Amazon . Wal-Mart Net Income $2,371 $14,694 Average Number of Common Shares Outstanding. . $ 474 $ 3,207 Required: a. Determine the Earnings Per Share for each company. Neither company had Preferred Stock Outstanding. Round to the nearest cent. b. Which company appears more profitable from an Earnings-Per-Share perspective. c. The market price of Amazon Common Stock was $750 per share at a time when Wal-Mart's was $69 per share. How would you explain this difference in Market Price given the Earnings-Per-Share computed in (a) for both companies?
For fiscal year 2018, Walmart Inc. (WMT) had total revenues of $500.34 billion, net income of $9.86 billion, total assets of $204.52 billion, and total shareholders' equity of $77.87 billion. a. Calculate Walmart's ROE directly, and using the DuPont Identity. b. Comparing with the data for Costco, use the DuPont Identity to understand the difference between the two firms' ROES. Data table For fiscal year 2018, Costco Wholesale Corporation (COST) had a net profit margin of 2.08%, asset turnover of 3.55, and a book equity multiplier of 3.37. Costco's ROE (DuPont) is 24.88%.
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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…
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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 $72,618 Cost of sales 360,984 365,086 51,997 51,278 *Described as net sales by Wal-Mart. Calculate the gross profit ratios for Wal-Mart and Target for 2016 and 2015. Enter the amounts as a percent, rounded to one decimal place.
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Comparing Income Statements and Balance Sheets of CompetitorsFollowing are selected income statement and balance sheet data from two retailers: Abercrombie & Fitch (clothing retailer in the high-end market) and TJX Companies (clothing retailer in the value-priced market). (a) Express each income statement amount as a percentage of sales. Round your answers to one decimal place (ex: 0.2345 = 23.5%). Income Statement ($ millions) ANF TJX Sales $4,680 $21,058 Cost of goods sold 1,599 Answer 16,021 Answer Gross profit 3,081 Answer 5,037 Answer Total expenses 2,435 Answer 4,003 Answer Net income $ 646 Answer $ 1,034 Answer (b) Express each balance sheet amount as a percentage of total assets. Round your answers to one decimal place (ex: 0.2345 = 23.5%). Balance Sheet ($ millions) ANF TJX Current assets $1,010 Answer $3,929 Answer Long-term assets 1,627 Answer 2,608 Answer Total assets…
AGF Foods Company is a large, primarily domestic, consumer foods company involved in the manufacture, distribution, and sale of a variety of food products. Industry averages are derived from Troy's The Almanac of Business and Industrial Financial Ratios and Dun and Bradstreet's Industry Norms and Key Business Ratios. Following are the 2024 and 2023 comparative income statements and balance sheets for AGF. The market price of AGF's common stock is $47 at the end of 2024. (The financial data we use are from actual financial statements of a well-known corporation, but the company name used in our illustration is fictitious and the numbers and dates have been modified slightly to disguise the company's identity.) Profitability is the key to a company's long-run survival. Profitability measures focus on a company's ability to provide an adequate return relative to resources devoted to company operations. AGF FOODS COMPANY Years Ended December 31, 2024 and 2023 2024 Comparative Income…