The fi nancial statements of Amazon.com, Inc. are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. LO6 Instructions

(a) Based on the information in these financial statements, compute the 2014 return on common stockholders’ equity, debt to assets ratio, and return on assets for each company.

(b) What conclusions concerning the companies’ profitability can be drawn from these ratios? Which company relies more on debt to boost its return to common shareholders?

(c) Compute the payout ratio for each company. Which pays out a higher percentage of its earnings?

INTERPRETING FINANCIAL STATEMENTS