WalMart

Return on Equity Net Income/Shareholder's Equity 19%

Profit Margin Net Income/Sales 3%
Asset Turnover Sales/Total Assets 2.61
Leverage Total Assets/Shareholder's Equity 2.38

Return on Assets Adjusted Net Income/Total Assets 9.03%

Profit Margin Adjusted Net Income/Sales 3.46%
Asset Turnover Sales/Total Assets 2.61

Margin Analysis
Gross Margin Gross Profit/Sales 21%
Operating Margin Operating Income/Sales 6%
Interest Rate Interest Cost/Total Debt 7%
Tax Rate Tax Expense/Profit Before Tax 35%

Efficiency
Receivable Days 365/Sales/Receivables 3.35
Payable Days 365/Inventory Purchases/Payables 33.00
Inventory Days 365/Cost of Goods Sold/Inventory 48.11
Operating Cycle Days (Receivables+ Inventory- Payable) days 18.46
(Current Assets -Current
Working Capital-to-Assets 0.01
Liabilities)/Total Assets

Liqudity Ratios
Current Ratio 1.04
Quick Ratio 0.15

Solvency Ratio

Debt-to-Equity Ratio 0.53

EBIT / (Interest payments + Current portion
Fixed charge coverage 3.24
of debt)
Interest coverage ratio EBIT / Interest expense 9
Tiffany’s
17% Dupont Analysi
11% Tiffany has the larger profit margin. WalMart
0.99 Walmart has the larger asset turnover Tiffany’s
1.57
Although Walmart and Tiffany c
different marketing/merchandis
end up with approximately the
different combinations of profit
turnover. Both approaches real
uses of a company’s assets
11.38%
11.55% Dupont ROA identity could be t
99%

Walmart’s focus on efficient ass

59%
19%
11%
40%

22.39
94.78
336.70
264.30
0.38

2.80
0.80

0.17

4.08

15

Walmart
Solvency Ratio
2002 2001
Debt/Asset Total debt/Total Assets 0.22 0.2
Debt/Equity Total debt/Total Equity 0.53 0.5

Interest Coverage Ratio EBIT / Interest expense 9.11 8.36

 EBIT / (Interest payments + Current
Fixed Charge Coverage 3.24 1.99
portion of debt)

Walmart
Liqudity Ratio
2002 2001
Current Ratio Current Assets/Current Liabilities 1.04 0.92
Quick Ratio Quick Assets/Current Liabilities 0.15 0.13
 Net Profit MargAsset TurnoROA
3.46% 2.61 9%
11.55% 0.99 11%

hough Walmart and Tiffany clearly have

fferent marketing/merchandising strategies, they
d up with approximately the same ROA. but
fferent combinations of profit margin and asset
nover. Both approaches really reflect different
es of a company’s assets

pont ROA identity could be thought of as reflecting alternatives focusing on the income statement (profit margin) versus on the balance sh

almart’s focus on efficient asset use

Tiffany
2002 2001
0.11 0.15
0.17 0.26

15.66 20.6
4.08 5.86

Tiffany
2002 2001
2.80 2.98
0.80 0.89
versus on the balance sheet (volume).
 Solvancy Ratio
Tiffany
2002 2001
Debt/Asset
Debt/Equity
Interest Coverage Ratio
Fixed Charge Coverage
Solvancy Ratio
WalMart
2002 2001