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Assess Wal-Mart, Stores Inc. concerning liquidity, solvency,profitability, and stock performance as of January 31, 2015. Foreach area, you should calculate the ratios we discussed in classand provide an analysis of the ratios calculated. I includehistorical stock price information and outstanding common shareinformation below.

Fiscal Year Ended

1/31/2015

1/31/2014

1/31/2013

1/31/2012

Adjusted Closing Price

$83.94

$71.97

$65.79

$56.32

Common Shares Outstanding (millions)

3,228

3,233

3,314

3,418

WAL MART STORES INC
10-K
Statement of CashFlows
(Amounts in millions)
Fiscal Year Ended January 31, 2015 2014 2013 2012
Cash flows from operating activities:
Consolidated net income $17,099 $16,695 $17,756 $16,387
(Income) Loss from discontinuedoperations, net of tax (285) (144) (52) 21
Income from continuing operations 16,814 16,551 17,704 16,408
Adjustments to reconcileincome from continuing operations to net cash provided by operatingactivities
Depreciation and amortization 9,173 8,870 8,478 8,106
Deferred income taxes (503) (279) (133) 1,050
Other operating activities 785 938 602 468
Changes in certain assets and liabilities,net of effects of acquisitions:
Increase in accounts receivable (569) (566) (614) (796)
Increase in inventories (1,229) (1,667) (2,759) (3,727)
Increase in accounts payable 2,678 531 1,061 2,687
Increase in accrued liabilities 1,249 103 271 30
(Decrease) Increase in accrued incometaxes 166 (1,224) 981 29
Net cash provided by operatingactivities 28,564 23,257 25,591 24,255
Cash flows from investing activities:
Payments for property and equipment (12,174) (13,115) (12,898) (13,510)
Proceeds from disposal of property andequipment 570 727 532 580
Proceeds from disposal of certainoperations 671 0 0 0
Other investing activities (192) (138) (271) (3,679)
Net cash used in investingactivities (11,125) (12,526) (12,637) (16,609)
Cash flows from financing activities:
Net change in short-term borrowings (6,288) 911 2,754 3,019
Proceeds from issuance of long-termdebt 5,174 7,072 211 5,050
Payment of long-term debt (3,904) (4,968) (1,478) (4,584)
Dividends paid (6,185) (6,139) (5,361) (5,048)
Purchase of Company stock (1,015) (6,683) (7,600) (6,298)
Dividends paid to noncontrollinginterest (600) (426) (282) (526)
Purchase of noncontrolling interest (1,844) (296) (132) 0
Other financing activities (409) (260) (58) (71)
Net cash used in financingactivities (15,071) (10,789) (11,946) (8,458)
Effect of exchange rates on cash (514) (442) 223 (33)
Net (decrease) increase in cash and cashequivalents 1,854 (500) 1,231 (845)
Cash and cash equivalents at beginning ofyear 7,281 7,781 6,550 7,395
Cash and cash equivalents at endof year $9,135 $7,281 $7,781 $6,550
Supplemental disclosure of cash flowinformation
Income tax paid 8,169 8,641 7,304 5,889
Interest paid 2,433 2,362 2,262 2,346

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Information:

WAL MART STORESINC
10-K
Income Statement
(Amounts in millions except per sharedata)
Fiscal Year Ended January 31, 2015 2014 2013 2012
Revenues:
Net sales $482,229 $473,076 ####### $443,416
Membership and other income 3,422 3,218 3,047 3,093
485,651 476,294 468,651 446,509
Costs and expenses:
Cost of sales 365,086 358,069 352,297 334,993
Operating, selling, general andadministrative expenses 93,418 91,353 88,629 85,025
Operating income 27,147 26,872 27,725 26,491
Interest:
Debt 2,161 2,072 1,977 2,034
Capital leases 300 263 272 286
Interest expense 2,461 2,335 2,249 2,320
Interest income (113) (119) (186) (161)
Interest, net 2,348 2,216 2,063 2,159
Income from continuing operations beforeincome taxes 24,799 24,656 25,662 24,332
Provision for income taxes:
Current 8,504 8,619 7,976 6,722
Deferred (519) (514) (18) 1,202
Total provision for income taxes 7,985 8,105 7,958 7,924
Income from continuing operations 16,814 16,551 17,704 16,408
Income (Loss) from discontinuedoperations, net of tax 285 144 52 (21)
Consolidated net income 17,099 16,695 17,756 16,387
Consolidated net income attributable tononcontrolling interest (736) (673) (757) (688)
Consolidated net incomeattributable to Walmart $16,363 $16,022 $16,999 $15,699
Net income per common share:
Basic income per common share fromcontinuing operations to Walmart $5.01 $4.87 $5.03 $4.55
Basic income (loss) per common share fromdiscontinued operations $0.06 $0.03 $0.01 ($0.01)
Basic net income per common shareattributable to Walmart $5.07 $4.90 $5.04 $4.54
Diluted income per common share fromcontinuing operations to Walmart $4.99 $4.85 $5.01 $4.53
Diluted income (loss) per common sharefrom discontinued operations $0.06 $0.03 $0.01 ($0.01)
Diluted net income per common share $5.05 $4.88 $5.02 $4.52
Weighted-average number of commonshares:
Basic 3,230 3,269 3,374 3,460
Diluted 3,243 3,283 3,389 3,474
Dividends declared per common share $1.92 $1.88 $1.59 $1.46
WAL MART STORESINC
10-K
Balance Sheet
(Amounts in millions except per sharedata)
January 31, 2015 2014 2013 2012
ASSETS
Current assets:
Cash and cash equivalents $9,135 $7,281 $7,781 $6,550
Receivables 6,778 6,677 6,768 5,937
Inventories 45,141 44,858 43,803 40,714
Prepaid expenses and other 2,224 1,909 1,551 1,685
Current assets of discontinuedoperations 0 460 37 89
Total current assets $63,278 $61,185 $59,940 $54,975
Property and equipment, at cost 177,395 173,089 165,825 155,002
Less accumulated depreciation (63,115) (57,725) (51,896) (45,399)
Property and equipment, net 114,280 115,364 113,929 109,603
Property under capital lease 5,239 5,589 5,899 5,936
Less accumulated amortization (2,864) (3,046) (3,147) (3,215)
Property under capital lease, net 2,375 2,543 2,752 2,721
Goodwill 18,102 19,510 20,497 20,651
Other assets and deferred charges 5,671 6,149 5,987 5,456
Total assets $203,706 $204,751 $203,105 $193,406
LIABILITIES ANDSHAREHOLDERS EQUITY
Current liabilities:
Short-term borrowings $1,592 $7,670 $6,805 $4,047
Accounts payable 38,410 37,415 38,080 36,608
Accrued liabilities 19,152 18,793 18,808 18,154
Accrued income taxes 1,021 966 2,211 1,164
Long-term debt due within one year 4,810 4,103 5,587 1,975
Obligations under capital leases duewithin one year 287 309 327 326
Current liabilities of discontinuedoperations 0 89 0 26
Total currentliabilities 65,272 69,345 71,818 62,300
Long-term debt 41,086 41,771 38,394 44,070
Long-term obligations under capitalleases 2,606 2,788 3,023 3,009
Deferred income taxes and other 8,805 8,017 7,613 7,862
Redeemable non-controlling interest 0 1,491 519 404
Commitments and contingencies 0 0 0 0
Shareholders equity:
Common stock 323 323 332 342
Capital in excess of par value 2,462 2,362 3,620 3,692
Retained earnings 85,777 76,566 72,978 68,691
Accumulated other comprehensive income(loss) (7,168) (2,996) (587) (1,410)
Total Walmart shareholders' equity 81,394 76,255 76,343 71,315
Noncontrolling interest 4,543 5,084 5,395 4,446
Total equity 85,937 81,339 81,738 75,761
Total liabilities and shareholdersequity $203,706 $204,751 $203,105 $193,406
WAL MART STORESINC
10-K
Statement of CashFlows
(Amounts in millions)
Fiscal Year Ended January 31, 2015 2014 2013 2012
Cash flows from operating activities:
Consolidated net income $17,099 $16,695 $17,756 $16,387
(Income) Loss from discontinuedoperations, net of tax (285) (144) (52) 21
Income from continuing operations 16,814 16,551 17,704 16,408
Adjustments to reconcileincome from continuing operations to net cash provided by operatingactivities
Depreciation and amortization 9,173 8,870 8,478 8,106
Deferred income taxes (503) (279) (133) 1,050
Other operating activities 785 938 602 468
Changes in certain assets and liabilities,net of effects of acquisitions:
Increase in accounts receivable (569) (566) (614) (796)
Increase in inventories (1,229) (1,667) (2,759) (3,727)
Increase in accounts payable 2,678 531 1,061 2,687
Increase in accrued liabilities 1,249 103 271 30
(Decrease) Increase in accrued incometaxes 166 (1,224) 981 29
Net cash provided by operatingactivities 28,564 23,257 25,591 24,255
Cash flows from investing activities:
Payments for property and equipment (12,174) (13,115) (12,898) (13,510)
Proceeds from disposal of property andequipment 570 727 532 580
Proceeds from disposal of certainoperations 671 0 0 0
Other investing activities (192) (138) (271) (3,679)
Net cash used in investingactivities (11,125) (12,526) (12,637) (16,609)
Cash flows from financing activities:
Net change in short-term borrowings (6,288) 911 2,754 3,019
Proceeds from issuance of long-termdebt 5,174 7,072 211 5,050
Payment of long-term debt (3,904) (4,968) (1,478) (4,584)
Dividends paid (6,185) (6,139) (5,361) (5,048)
Purchase of Company stock (1,015) (6,683) (7,600) (6,298)
Dividends paid to noncontrollinginterest (600) (426) (282) (526)
Purchase of noncontrolling interest (1,844) (296) (132) 0
Other financing activities (409) (260) (58) (71)
Net cash used in financingactivities (15,071) (10,789) (11,946) (8,458)
Effect of exchange rates on cash (514) (442) 223 (33)
Net (decrease) increase in cash and cashequivalents 1,854 (500) 1,231 (845)
Cash and cash equivalents at beginning ofyear 7,281 7,781 6,550 7,395
Cash and cash equivalents at endof year $9,135 $7,281 $7,781 $6,550
Supplemental disclosure of cash flowinformation
Income tax paid 8,169 8,641 7,304 5,889
Interest paid 2,433 2,362 2,262 2,346

Questions:

DuPont Model – Analysis of ROA

Calculations:

< >: Return on sales x asset turnover

Fiscal Year Ended

2/1/2015

2/2/2014

2/3/2013

1/29/2012

Return on assets (calculated)

8.39%

8.15%

8.74%

8.47%

Return on sales

5.63%

?

?

?

Asset turnover

2.38%

2.33%

2.31

2.31

Product

13.40%

?

?

?

Profitability Performance

Calculations:

Asset turnover: total net revenues / averagetotal assets = 485,661 / 203,706 = 2.38

Return on sales: adjusted net income / totalnet revenues = Step by step for 2015 =

Gross margin %: (total revenue – cost of sales)/ total revenue = (485,651 – 365,086) / 485,651 = 0.2483 =24.83%

Return on assets: adjusted net income / averagetotal assets = 17,099 / 203,706 = 8.39%

Return on equity: net earnings / averageequity = Step by step for 2015 ?

Average interest rate: interest expense /average total liabilities = 2,461 / 65,272 = 0.0377 =3.77%

Average total assets: (total assets 2015 +total assets 2014)/2 = (203,706 + 204,751) / 2 =204,228.50

Income tax rate: Provision for income taxes /earnings before income taxes = Step by step for 2015?

Net of tax interest expense: income tax rate xinterest expense = Step by step for 2015 ?

Adjusted net income: net earning + net of taxinterest expense = Step by step for 2015?

Average equity: (total shareholders’ equity2015 + total shareholders’ equity 2014)/2 = Step by stepfor 201

Average total liabilities: (total liabilities2015 + total liabilities 2014)/2 = Step by step for 2015?

Profitability Ratios

Fiscal Year Ended

2/1/2015

2/2/2014

2/3/2013

1/29/2012

Asset turnover

2.38

2.33

2.31

2.31

Return on sales

5.63%

?

?

?

Gross margin %

24.83%

24.82%

24.83%

24.98%

Return on assets

8.39%

8.15%

8.74%

8.47%

Return on equity

21.01%

?

?

?

Average interest rate

3.77%

3.37

3.13%

3.72%

Average total assets

204,228.50

203,928

198,255.50

2011 data needed

Income tax rate

32.20%

?

?

?

Net of tax interest expense

2,348

2,216

2,063

2,159

Adjusted net income

16,363

?

?

?

Average equity

78,824.50

?

?

?

Average total liabilities

120,590.50

?

?

?

Perform a vertical and horizontal analysis of Wal-Mart Stores,Inc.’s income statements and balance sheets as of January 31, 2015.In performing this analysis, consider any notable trends or changesthat you observe that may provide useful information concerning itsfinancial condition. Also use as many years’ worth of statements asyou feel necessary.

WAL MART STORESINC
10-K
Statement of CashFlows
(Amounts in millions)
Fiscal Year Ended January 31, 2015 2014 2013 2012
Cash flows from operating activities:
Consolidated net income $17,099 $16,695 $17,756 $16,387
(Income) Loss from discontinuedoperations, net of tax (285) (144) (52) 21
Income from continuing operations 16,814 16,551 17,704 16,408
Adjustments to reconcileincome from continuing operations to net cash provided by operatingactivities
Depreciation and amortization 9,173 8,870 8,478 8,106
Deferred income taxes (503) (279) (133) 1,050
Other operating activities 785 938 602 468
Changes in certain assets and liabilities,net of effects of acquisitions:
Increase in accounts receivable (569) (566) (614) (796)
Increase in inventories (1,229) (1,667) (2,759) (3,727)
Increase in accounts payable 2,678 531 1,061 2,687
Increase in accrued liabilities 1,249 103 271 30
(Decrease) Increase in accrued incometaxes 166 (1,224) 981 29
Net cash provided by operatingactivities 28,564 23,257 25,591 24,255
Cash flows from investing activities:
Payments for property and equipment (12,174) (13,115) (12,898) (13,510)
Proceeds from disposal of property andequipment 570 727 532 580
Proceeds from disposal of certainoperations 671 0 0 0
Other investing activities (192) (138) (271) (3,679)
Net cash used in investingactivities (11,125) (12,526) (12,637) (16,609)
Cash flows from financing activities:
Net change in short-term borrowings (6,288) 911 2,754 3,019
Proceeds from issuance of long-termdebt 5,174 7,072 211 5,050
Payment of long-term debt (3,904) (4,968) (1,478) (4,584)
Dividends paid (6,185) (6,139) (5,361) (5,048)
Purchase of Company stock (1,015) (6,683) (7,600) (6,298)
Dividends paid to noncontrollinginterest (600) (426) (282) (526)
Purchase of noncontrolling interest (1,844) (296) (132) 0
Other financing activities (409) (260) (58) (71)
Net cash used in financingactivities (15,071) (10,789) (11,946) (8,458)
Effect of exchange rates on cash (514) (442) 223 (33)
Net (decrease) increase in cash and cashequivalents 1,854 (500) 1,231 (845)
Cash and cash equivalents at beginning ofyear 7,281 7,781 6,550 7,395
Cash and cash equivalents at endof year $9,135 $7,281 $7,781 $6,550
Supplemental disclosure of cash flowinformation
Income tax paid 8,169 8,641 7,304 5,889
Interest paid 2,433 2,362 2,262 2,346

Stock Performance

Calculations:

Book value per common share: book value ofequity / common shares outstanding = Step by st for2015 =

Earnings per share (Basic) according to Income Statementis $5.07

Earnings per share (Diluted) according to IncomeStatement is $5.05

P/E Ratio: adjusted closing price / earningsper share (diluted) = Step by step for 2015=

Dividend yield: dividend per share / adjustedclosing price = Step by step for 2015=

Dividend payout: dividend per share / earningsper share (diluted) = Step by step for 2015=

Adjusted basic EPS: adjusted net income /Weighted average shares outstanding: basic

Adjusted diluted EPS: adjusted net income /Weighted average shares outstanding: diluted

Adjusted P/E ratio: adjusted closing price /adjusted diluted EPS

Adjusted dividend payout: Dividends per share /adjusted diluted EPS

Fiscal Year Ended

2/1/2015

2/2/2014

2/3/2013

1/29/2012

Book value per common share

?

?

?

?

Earnings per share (basic)

?

?

?

?

Earnings per share (diluted)

?

?

?

?

P/E Ratio

?

?

?

?

Dividend yield

?

?

?

?

Dividend payout

?

?

?

?

Adjusted Basic EPS

?

?

?

?

Adjusted Diluted EPS

?

?

?

?

Adjusted P/E Ratio

?

?

?

?

Adjusted dividend payout

?

?

?

?

Book value of equity

?

?

?

?

Common shares outstanding

?

?

?

?

Adjusted closing price

?

?

?

?

Dividends per share

?

?

?

?

Information:

WAL MART STORESINC
10-K
Statement of CashFlows
(Amounts in millions)
Fiscal Year Ended January 31, 2015 2014 2013 2012
Cash flows from operating activities:
Consolidated net income $17,099 $16,695 $17,756 $16,387
(Income) Loss from discontinuedoperations, net of tax (285) (144) (52) 21
Income from continuing operations 16,814 16,551 17,704 16,408
Adjustments to reconcileincome from continuing operations to net cash provided by operatingactivities
Depreciation and amortization 9,173 8,870 8,478 8,106
Deferred income taxes (503) (279) (133) 1,050
Other operating activities 785 938 602 468
Changes in certain assets and liabilities,net of effects of acquisitions:
Increase in accounts receivable (569) (566) (614) (796)
Increase in inventories (1,229) (1,667) (2,759) (3,727)
Increase in accounts payable 2,678 531 1,061 2,687
Increase in accrued liabilities 1,249 103 271 30
(Decrease) Increase in accrued incometaxes 166 (1,224) 981 29
Net cash provided by operatingactivities 28,564 23,257 25,591 24,255
Cash flows from investing activities:
Payments for property and equipment (12,174) (13,115) (12,898) (13,510)
Proceeds from disposal of property andequipment 570 727 532 580
Proceeds from disposal of certainoperations 671 0 0 0
Other investing activities (192) (138) (271) (3,679)
Net cash used in investingactivities (11,125) (12,526) (12,637) (16,609)
Cash flows from financing activities:
Net change in short-term borrowings (6,288) 911 2,754 3,019
Proceeds from issuance of long-termdebt 5,174 7,072 211 5,050
Payment of long-term debt (3,904) (4,968) (1,478) (4,584)
Dividends paid (6,185) (6,139) (5,361) (5,048)
Purchase of Company stock (1,015) (6,683) (7,600) (6,298)
Dividends paid to noncontrollinginterest (600) (426) (282) (526)
Purchase of noncontrolling interest (1,844) (296) (132) 0
Other financing activities (409) (260) (58) (71)
Net cash used in financingactivities (15,071) (10,789) (11,946) (8,458)
Effect of exchange rates on cash (514) (442) 223 (33)
Net (decrease) increase in cash and cashequivalents 1,854 (500) 1,231 (845)
Cash and cash equivalents at beginning ofyear 7,281 7,781 6,550 7,395
Cash and cash equivalents at endof year $9,135 $7,281 $7,781 $6,550
Supplemental disclosure of cash flowinformation
Income tax paid 8,169 8,641 7,304 5,889
Interest paid 2,433 2,362 2,262 2,346
WAL MART STORESINC
10-K
Balance Sheet
(Amounts in millions except per sharedata)
January 31, 2015 2014 2013 2012
ASSETS
Current assets:
Cash and cash equivalents $9,135 $7,281 $7,781 $6,550
Receivables 6,778 6,677 6,768 5,937
Inventories 45,141 44,858 43,803 40,714
Prepaid expenses and other 2,224 1,909 1,551 1,685
Current assets of discontinuedoperations 0 460 37 89
Total current assets $63,278 $61,185 $59,940 $54,975
Property and equipment, at cost 177,395 173,089 165,825 155,002
Less accumulated depreciation (63,115) (57,725) (51,896) (45,399)
Property and equipment, net 114,280 115,364 113,929 109,603
Property under capital lease 5,239 5,589 5,899 5,936
Less accumulated amortization (2,864) (3,046) (3,147) (3,215)
Property under capital lease, net 2,375 2,543 2,752 2,721
Goodwill 18,102 19,510 20,497 20,651
Other assets and deferred charges 5,671 6,149 5,987 5,456
Total assets $203,706 $204,751 $203,105 $193,406
LIABILITIES ANDSHAREHOLDERS EQUITY
Current liabilities:
Short-term borrowings $1,592 $7,670 $6,805 $4,047
Accounts payable 38,410 37,415 38,080 36,608
Accrued liabilities 19,152 18,793 18,808 18,154
Accrued income taxes 1,021 966 2,211 1,164
Long-term debt due within one year 4,810 4,103 5,587 1,975
Obligations under capital leases duewithin one year 287 309 327 326
Current liabilities of discontinuedoperations 0 89 0 26
Total currentliabilities 65,272 69,345 71,818 62,300
Long-term debt 41,086 41,771 38,394 44,070
Long-term obligations under capitalleases 2,606 2,788 3,023 3,009
Deferred income taxes and other 8,805 8,017 7,613 7,862
Redeemable non-controlling interest 0 1,491 519 404
Commitments and contingencies 0 0 0 0
Shareholders equity:
Common stock 323 323 332 342
Capital in excess of par value 2,462 2,362 3,620 3,692
Retained earnings 85,777 76,566 72,978 68,691
Accumulated other comprehensive income(loss) (7,168) (2,996) (587) (1,410)
Total Walmart shareholders' equity 81,394 76,255 76,343 71,315
Noncontrolling interest 4,543 5,084 5,395 4,446
Total equity 85,937 81,339 81,738 75,761
Total liabilities and shareholdersequity $203,706 $204,751 $203,105 $193,406
WAL MART STORESINC
10-K
Income Statement
(Amounts in millions except per sharedata)
Fiscal Year Ended January 31, 2015 2014 2013 2012
Revenues:
Net sales $482,229 $473,076 ####### $443,416
Membership and other income 3,422 3,218 3,047 3,093
485,651 476,294 468,651 446,509
Costs and expenses:
Cost of sales 365,086 358,069 352,297 334,993
Operating, selling, general andadministrative expenses 93,418 91,353 88,629 85,025
Operating income 27,147 26,872 27,725 26,491
Interest:
Debt 2,161 2,072 1,977 2,034
Capital leases 300 263 272 286
Interest expense 2,461 2,335 2,249 2,320
Interest income (113) (119) (186) (161)
Interest, net 2,348 2,216 2,063 2,159
Income from continuing operations beforeincome taxes 24,799 24,656 25,662 24,332
Provision for income taxes:
Current 8,504 8,619 7,976 6,722
Deferred (519) (514) (18) 1,202
Total provision for income taxes 7,985 8,105 7,958 7,924
Income from continuing operations 16,814 16,551 17,704 16,408
Income (Loss) from discontinuedoperations, net of tax 285 144 52 (21)
Consolidated net income 17,099 16,695 17,756 16,387
Consolidated net income attributable tononcontrolling interest (736) (673) (757) (688)
Consolidated net incomeattributable to Walmart $16,363 $16,022 $16,999 $15,699
Net income per common share:
Basic income per common share fromcontinuing operations to Walmart $5.01 $4.87 $5.03 $4.55
Basic income (loss) per common share fromdiscontinued operations $0.06 $0.03 $0.01 ($0.01)
Basic net income per common shareattributable to Walmart $5.07 $4.90 $5.04 $4.54
Diluted income per common share fromcontinuing operations to Walmart $4.99 $4.85 $5.01 $4.53
Diluted income (loss) per common sharefrom discontinued operations $0.06 $0.03 $0.01 ($0.01)
Diluted net income per common share $5.05 $4.88 $5.02 $4.52
Weighted-average number of commonshares:
Basic 3,230 3,269 3,374 3,460
Diluted 3,243 3,283 3,389 3,474
Dividends declared per common share $1.92 $1.88 $1.59 $1.46

Fiscal Year Ended

1/31/2015

1/31/2014

1/31/2013

1/31/2012

Adjusted Closing Price

$83.94

$71.97

$65.79

$56.32

Common Shares Outstanding (millions)

3,228

3,233

3,314

3,418

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