PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
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Chapter 28, Problem 3PS
Performance measures* Table 28.8 gives abbreviated balance sheets and income statements for Walmart. At the end of fiscal 2017, Walmart had 2,960 million shares outstanding with a share price of $106. The company’s weighted-average cost of capital was about 5%. Assume the marginal corporate tax rate was 35%. Calculate:
- a. Market value added.
- b. Market-to-book ratio.
- c. Economic value added.
- d. Return on start-of-the-year capital.
TABLE 28.8 Balance sheets and income statement for Walmart, fiscal 2017 and 2016 (figures in $ millions)
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Students have asked these similar questions
Below are the ratio results for Abcom for the year 2022.
Performance
Operating margin -18.66%
Asset turnover 0.16
Return on Capital Employed -7.64%
Working capital
Inventory days 88.88 days
Debtor days 46.18 days
Trade creditor days 68.11 days
Liquidity
Current ratio 0.30
Acid test 0.25
Solvency
Interest cover -2.56
Shareholder's view
Return on equity 7.16%
Required;
Analyse and interpret the meaning of these results.
Analyze the following ratios (Good/Not good, Undervalued/Overvalued, or just OK) based on the given industry averages.
Ratios
Annual Data
Industry Average
Interpretation
Current
5.7
4
Days Sales Outstanding
37 days
42 days
Total Debt to Total Capital
47.80%
32.60%
Times-Interest Earned
2.2
6
Profit Margin
6.10%
6.00%
Return on Invested Capital
10.03%
10.00%
Enterprise Value to EBITDA
0.87
1.12
Provide a decision for each analysis.
Calculate profitability measures The following information was available for the year ended December 31, 2016:Sales $ 400,000Net income 60,000Average total assets 1,000,000Average total stockholders' equity 600,000Dividends per share 2.40Earnings per share 6.00Market price per share at year-end 96.00Required:Calculate margin, turnover, and ROI for the year ended December 31, 2016.Calculate ROE for the year ended December 31, 2016.Calculate the price/earnings ratio for 2016.Calculate the dividend payout ratio for 2016.Calculate the dividend yield for 2016.
Chapter 28 Solutions
PRIN.OF CORPORATE FINANCE
Ch. 28 - Prob. 1PSCh. 28 - Performance measures Keller Cosmetics maintains an...Ch. 28 - Performance measures Table 28.8 gives abbreviated...Ch. 28 - Performance measures Describe some alternative...Ch. 28 - Financial ratios Look again at Table 28.8, which...Ch. 28 - Prob. 6PSCh. 28 - Financial ratios True or false? a. A companys...Ch. 28 - Financial ratios Sara Togas sells all its output...Ch. 28 - Financial ratios As you can see, someone has...Ch. 28 - Prob. 10PS
Ch. 28 - Prob. 11PSCh. 28 - Prob. 12PSCh. 28 - Prob. 13PSCh. 28 - Prob. 14PSCh. 28 - Prob. 15PSCh. 28 - Prob. 16PSCh. 28 - Prob. 17PSCh. 28 - Prob. 18PSCh. 28 - Prob. 19PSCh. 28 - Prob. 20PSCh. 28 - Prob. 21PSCh. 28 - Prob. 22PSCh. 28 - Prob. 23PSCh. 28 - Prob. 25PSCh. 28 - Prob. 26PSCh. 28 - Prob. 27PS
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