For fiscal year 2015, Walmart Stores Inc. (WMT) had total revenues of $484.65 billion, net income of

Question:

For fiscal year 2015, Walmart Stores Inc. (WMT) had total revenues of $484.65 billion, net income of $16.36 billion, total assets of $203.49 billion, and total shareholder's equity of $81.39 billion.

a. Calculate Wal-Mart's ROE directly, and using the DuPont Identity.

b. Comparing with the data for Costco in problem 41, use the DuPont Identity to understand the difference between the two firms' ROEs?

DuPont Identity
The DuPont identity is an expression that shows a company's return on equity (ROE) can be represented as a product of three other ratios: the profit margin, the total asset turnover, and the equity multiplier. The formula for the DuPont identity...