Wal-Mart In the 2006 Annual Report for Wal-Mart (provided in Appendix A), you will find Segment Information in Note 11 in the Notes to the Financial Statements.

1. As you can see, Wal-Mart has four different segments: Wal-Mart Stores; SAM’S CLUB;
International; and Other (that is, all other segments combined). How do you think Wal-
Mart primarily evaluates these segments—as cost centers, as profit centers, or as investment centers?
2. Compute the profit margin ratio for the four segments for 2004, 2005, and 2006. Which segment is the most profitable? Which is growing the fastest in terms of revenues?

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Notes to Financial Statements continued (in millions) Segment Information Year Ended January 31 Wal-Mart Stores SAM'S CLUB International Other Consolidated 2004 Revenue $170,270 $33,804 $46,762 $1,641 $252,477 Operating profit (loss) 12,916 1,126 2,370 (1,387) 15,025 2005 Revenue $187,511 $36,332 $55,358 $1,757 $280,958 Operating profit (loss) 14,163 1,280 2,988 (1,340) 17,091 2006 Revenue $204,534 $38,955 $61,676 $2,545 $307,710 Operating profit (loss) 15,324 1,385 3,330 (1,509) 18,530