Please check and make sure all of these are correct. Only need 2015 Current rati
ID: 2652768 • Letter: P
Question
Please check and make sure all of these are correct. Only need 2015
Current ratio= CA/CL
2015: 63278000/65272000 = 0.97
Total debt ratio= TD/TA=(TA-TE)/TA;
2015: (203706000-85937000)/203706000 = 0.57
TIE=EBIT/Interest;
2015: 27147000/2461000 = 11.03
Cash coverage ratio=(EBIT+ Depreciation)/Interest
2015: (27147000+5,390,000)/2,461,000 = 13.22 times
Receivable turnover=sales/AR
2015: 482229000/6778000 = 71.14
Days sales in receivables=365/receivable turnover
2015: 365/74.14=4.92 days
PM=NI/sales
2015: 16363000/482229000 = 0.03
TAT=sales/TA
2015: 482229000/203706000 = 2.36
ROA=NI/TA
2015: 16363000/203706000 = 0.08
ROE=NI/OE
2015: 16363000/71394000=0.2292
Wal-Mart Stores, Inc. (NYS: WMT) Balance Sheet Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 01/31/2015 01/31/2014 01/31/2013 Currency USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Cash & cash equivalents 9135000 7281000 7781000 Receivables, net 6778000 6677000 6768000 Inventories 45141000 44858000 43803000 Prepaid expenses & other current assets 2224000 1909000 1588000 Current assets of discontinued operations - 460000 - Total current assets 63278000 61185000 59940000 Land 26261000 26184000 25612000 Buildings & improvements 97496000 95488000 90686000 Fixtures & equipment 45044000 42971000 40903000 Transportation equipment 2807000 2785000 2796000 Construction in progress 5787000 5661000 5828000 Property & equipment, at cost 177395000 173089000 165825000 Less: accumulated depreciation 63115000 57725000 51896000 Property & equipment, net 114280000 115364000 113929000 Property under capital leases 5239000 5589000 5899000 Less: accumulated amortization 2864000 3046000 3147000 Property under capital leases, net 2375000 2543000 2752000 Goodwill 18102000 19510000 20497000 Other assets & deferred charges 5671000 6149000 5987000 Total assets 203706000 204751000 203105000 Short-term borrowings 1592000 7670000 6805000 Accounts payable 38410000 37415000 38080000 Accrued wages & benefits 4954000 4652000 5059000 Self-insurance 3306000 3477000 3373000 Accrued taxes 2592000 2554000 2851000 Other accrued liabilities 8300000 8110000 7525000 Accrued liabilities 19152000 18793000 18808000 Accrued income taxes 1021000 966000 2211000 Long-term debt due within one year 4810000 4103000 5587000 Obligations under capital leases due within one year 287000 309000 327000 Current liabilities of discontinued operation - 89000 - Total current liabilities 65272000 69345000 71818000 Unsecured debt 45443000 45073000 42882000 Other debt 453000 801000 1099000 Total long-term debt 45896000 45874000 43981000 Less: current portion 4810000 4103000 5587000 Long-term debt 41086000 41771000 38394000 Long-term obligations under capital leases 2606000 2788000 3023000 Deferred income taxes & other liabilities 8805000 8017000 7613000 Redeemable noncontrolling interest - 1491000 519000 Common stock 323000 323000 332000 Capital in excess of par value 2462000 2362000 3620000 Retained earnings (accumulated deficit) 85777000 76566000 72978000 Currency translation & other -6355000 -2722000 47000 Derivative instruments -134000 336000 129000 Minimum pension liability -679000 -610000 -763000 Accumulated other comprehensive income (loss) -7168000 -2996000 -587000 Total Walmart shareholders' equity 81394000 76255000 76343000 Noncontrolling interests - 5084000 5395000 Nonredeemable noncontrolling interest 4543000 - - Total equity 85937000 81339000 81738000Explanation / Answer
Please find the comments below on the answers provided by you:
a) Current ratio is correct as the formula for current ratio is Total current assets/Total current liabilities
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b) The formula for total debt ratio is Total debt/Total assets which indicates the portion of debt used to finance company's assets. While the common way to find total debt is to sum up all the value of liabilities excluding stockholder's equity, the method used by you is also correct as the value of total assets should be equal to the value of total debt + stockholder's equity.
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c) Times interest earned ratio is the ratio of operating income (EBIT) and interest. The formula is Operating income or EBIT/Interest Expense. The approach used is ,therefore, correct.
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d) Cash coverage is calculated with the use of (EBIT + Non Cash Expenses)/Interest Expense formula. By looking at the financial statements, we can identify 2 types of non cash expenses. One is depreciation on property plant and equipment and amortization on property under capital leases. Both these expenses should be taken into considertion while calculating cash coverage ratio. The correct equation should, therefore, be:
Cash Coverage Ratio = (27147000 + 5,390,000 + 182,000)/2,461,000 = 13.30 times
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e) Accounts receivables turnover ratio is calculated as Net credit sales/(Average accounts receivables) where average accounts receivables is (Opening balance of accounts receivables + Closing balance of accounts receivables)/2. Since, we have been provided with the both details, we will average receivables.
Accounts Receivables Turnover Ratio = 482,229,000/(6,778,000 + 6,677,000)/2 = 71.68 times
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f) Days receivables in turnover is the ratio of 365 days and accounts receivables turnover ratio. Since, the figure for accounts receivables turnover ratio has changed, days receivables in turnover will also change as follows:
Days Receivables in Turnover = 365/71.68 = 5.09 days
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f) The formula for profit margin is Net income/Sales*100. Therefore, the approach used is correct. It will, however, be expressed in percentage terms.
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g) The formula for total assets turnover is Sales/Average total assets where Average total assets = (Opening total assets + Closing total assets)/2. The return on assets would, therefore, be:
Total Asset Turnover = 482,229,000/(204,751,000 +203,706,000)/2 = 2.36 times
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h) The formula for return on assets is Net income/Average total assets where Average total assets = (Opening total assets + Closing total assets)/2. The return on assets would, therefore, be:
Return on Assets = 16,363,000/(204,751,000 +203,706,000)/2 = 8.01%
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i) The formula for return on equity is Net income/Average stockholder's equity where Average stockholder's equity = (Opening stockholder's equity + Closing stockholder's equity)/2. The return on equity would, therefore, be:
Return on Equity = 16,363,000/(76,255,000 + 81,394,000)/2 = 20.75%