Wal-Mart Using Wal-Mart’s 2006 Form 10-K contained in Appendix A, answer the following questions:

1. Compute the following ratios for Wal-Mart for 2005 and compare those results to the 2006 results—debt ratio, current ratio, return on sales, asset turnover, and return on equity.

For which of these ratios did Wal-Mart improve from 2005 to 2006?

2 Wal-Mart’s fiscal 2006 inventory represents what percentage of sales? What percentage of total assets does this line item represent? Why do you think Wal-Mart has so much money tied up in inventory?