In fiscal year 20152015 , Wal-Mart Stores (WMT) had revenue of $ 485.65$485.65 b
ID: 2815089 • Letter: I
Question
In fiscal year
20152015 ,
Wal-Mart Stores (WMT) had revenue of
$ 485.65$485.65
billion, gross profit of
$ 120.57$120.57
billion, and net income of
$ 16.36$16.36
billion. Costco Wholesale Corporation (COST) had revenue of
$ 116.2$116.2
billion, gross profit of
$ 15.13$15.13
billion, and net income of
$ 2.38$2.38
billion.
a. Compare the gross margins for Walmart and Costco.
b. Compare the net profit margins for Walmart and Costco.
c. Which firm was more profitable in
20152015 ?
a. Compare the gross margins for Walmart and Costco.
The gross margin for Walmart is
nothing %.
(Round to two decimal places.)
Explanation / Answer
Answer a.
Walmart Stores:
Gross Margin = Gross Profit / Revenue
Gross Margin = $120.57 billion / $485.65 billion
Gross Margin = 24.83%
Costco Wholesale Corporation:
Gross Margin = Gross Profit / Revenue
Gross Margin = $15.13 billion / $116.2 billion
Gross Margin = 13.02%
Answer b.
Walmart Stores:
Net Profit Margin = Net Income / Revenue
Net Profit Margin = $16.36 billion / $485.65 billion
Net Profit Margin = 3.37%
Costco Wholesale Corporation:
Net Profit Margin = Net Income / Revenue
Net Profit Margin = $2.38 billion / $116.2 billion
Net Profit Margin = 2.05%
Answer c.
Gross Margin and Net Profit Margin of Walmart are higher those that of Costco. So, Walmart is more profitable.