Corporate Finance: A Focused Approach (mindtap Course List)
7th Edition
ISBN: 9781337909747
Author: Michael C. Ehrhardt, Eugene F. Brigham
Publisher: South-Western College Pub
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Chapter 3, Problem 13P
a)
Summary Introduction
To determine: The indicated ratios of company L.
b)
Summary Introduction
To determine: The company L’s and industry’s DuPont equation.
c)
Summary Introduction
To determine: The strength and weakness of company L as projected by analysis.
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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%.
CAN SOMEONE HELP ME WITH THE RATIOS?
The comparative statements of Wahlberg Company are presented here.
Wahlberg CompanyIncome StatementFor the Years Ended December 31
2020
2019
Net sales
$1,813,600
$1,750,700
Cost of goods sold
1,007,100
978,000
Gross profit
806,500
772,700
Selling and administrative expenses
519,800
472,000
Income from operations
286,700
300,700
Other expenses and losses
Interest expense
17,100
14,200
Income before income taxes
269,600
286,500
Income tax expense
80,015
77,500
Net income
$ 189,585
$ 209,000
Wahlberg CompanyBalance SheetsDecember 31
Assets
2020
2019
Current assets
Cash
$60,600
$64,600
Debt investments (short-term)
69,100
50,300
Accounts receivable
117,500
102,800
Inventory
123,600
115,600…
CAN SOMEONE HELP ME WITH THE RATIOS?
The comparative statements of Wahlberg Company are presented here.
Wahlberg CompanyIncome StatementFor the Years Ended December 31
2020
2019
Net sales
$1,813,600
$1,750,700
Cost of goods sold
1,007,100
978,000
Gross profit
806,500
772,700
Selling and administrative expenses
519,800
472,000
Income from operations
286,700
300,700
Other expenses and losses
Interest expense
17,100
14,200
Income before income taxes
269,600
286,500
Income tax expense
80,015
77,500
Net income
$ 189,585
$ 209,000
Wahlberg CompanyBalance SheetsDecember 31
Assets
2020
2019
Current assets
Cash
$60,600
$64,600
Debt investments (short-term)
69,100
50,300
Accounts receivable
117,500
102,800
Inventory
123,600
115,600
Total…
Chapter 3 Solutions
Corporate Finance: A Focused Approach (mindtap Course List)
Ch. 3 - Prob. 1QCh. 3 - Prob. 2QCh. 3 - Over the past year, M. D. Ryngaert Co. has...Ch. 3 - Prob. 4QCh. 3 - Prob. 5QCh. 3 - Prob. 6QCh. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4P
Ch. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - Ace Industries has current assets equal to 3...Ch. 3 - Prob. 8PCh. 3 - Prob. 9PCh. 3 - Prob. 10PCh. 3 - Complete the balance sheet and sales information...Ch. 3 - The Kretovich Company had a quick ratio of 1.4, a...Ch. 3 - Prob. 13PCh. 3 - Prob. 14PCh. 3 - Prob. 1MCCh. 3 - Prob. 2MCCh. 3 - Prob. 3MCCh. 3 - Prob. 4MCCh. 3 - Prob. 5MCCh. 3 - Prob. 6MCCh. 3 - Prob. 7MCCh. 3 - Prob. 8MCCh. 3 - Prob. 9MCCh. 3 - Prob. 10MC
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