1. Prepare a written analysis of the financial ratios of the company Walmart.. This must include trend analysis (historical and projected) and comparative analysis (cross-sectional or industry). The analysis needs to examine strengths and weaknesses revealed by the data. Remember, in a written ratio analysis the actual ratio data need to be included in the written analysis in addition to presentation in any accompanying tables or figures (graphs).

2. What are the most important things that you learned from the study of this week?s readings and assignments? Remember to always include appropriate references.

I have attached two examples and the eval. Please follow the examples.

1 Prepare a written analysis of the financial ratios resulting from the Week 2 Financial Forecast (using eVal or the Prof. Stevens Excel Financial Forecasting Model) of the selected company. This must include trend analysis (historical and projected) and comparative analysis (cross-sectional or industry). The analysis needs to examine strengths and weaknesses revealed by the data. Remember, in a written ratio analysis the actual ratio data need to be included in the written analysis in addition to presentation in any accompanying tables or figures (graphs). There are many classifications of ratios, but they mainly fall into the following five categories: profitability, liquidity, debt management, asset management and market value. The utilization of ratios during a financial analysis is necessary in order for investors to make educated decisions about a company's current performance, and to wisely predict \"future earnings, risk and growth\" (Petroff, 2000). Ratios must be \"compared over time and with benchmarks of similar companies in the same industry, and preferably with companies of similar size\" in order to achieve a successful analysis (Petroff, 2000). McDonald's is one of Starbucks' main competitors in the beverage industry thanks to their healthy offering of coffees and teas at a sharp price point. Below, table 1 outlines the current (2013-2015) and forecasted (2016-2018) ratios for Starbucks, and table 2 outlines those of McDonald's, according to an Excel eVal analysis completed. Table 1: Starbucks Ratio's (eVal) Table 2: McDonald's Ratio's (eVal) \"A profitability ratio provides information on the amount of income [generated] from each dollar of sales\" (Drake, n.d.). From 2013 to 2015, Starbucks has seen a substantial increase as it relates to ROA, increasing from .001 in 2013 to .363 in 2015.This increase shows that the company is maximizing its fixed assets by generating more income from them than before. The company is forecasted to maintain the positive trend with a consistent ratio of .36. McDonald's ROA is achieving the opposite trend, and is seeing a decline year over year, as well as a forecasted decline. The company began with an ROA of .201 in 2013, and is forecasted to decline to .156 by 2018. On a more positive note, both companies have seen, and are forecasted to see an increase in ROE. Return on equity shows how effective a company is at utilizing shareholder's equity to generate returns. McDonalds is forecasted to almost double, from .357 in 2013 to .609 in 2018. Starbucks is only due to see an increase of .07 from 2013 to 2018. \"A liquidity ratio provides information on a company's ability to meet its short-term, immediate obligations\" (Drake, n.d.). The quick ratio measures the total current assets, less inventory, compared with current liabilities to give investors an idea as to whether or not the company can satisfy its current liabilities with its current most liquid assets (Drake, n.d.). The higher a quick ratio, the better, and in this category McDonald's outperforms Starbucks. McDonalds has become more liquid, moving from a quick ratio of 1.29 in 2013 to a 3.05 in 2015, and is forecasted to maintain a 3.05 consistently over the next 3 years. Starbucks has seen a slight increase but overall maintains a quick ratio of .64. Another liquidity relationship, the current ratio, measures current assets to current liabilities, and again Starbucks underperforms against rival McDonald's. McDonald's more than doubles its current ratio from 2013 to 2015 from 1.593 to 3.268 respectively. Starbucks again, maintains a consistent current ratio averaging 1.191. McDonald's may have a need to become more liquid as it has seen declining sales over the past few years, and is aiming to close a few locations to combat the trend. Starbucks has seen success with its current business model, and still has opportunity in the market for expansion. A debt management or \"financial leverage ratio, provides information on the degree of a company's fixed financing obligations and its ability to satisfy these financing obligations\" (Drake, n.d.). Total debt-to-equity ratios identify assets paid for through both long-term and short-term debt. As Starbuck's looks to expand stores both domestically and internationally, the company must take on more debt. The company has seen a small and healthy increase from .29 to .40 from 2013 to 2015 respectively unlike its competitor McDonalds who has seen a larger portion of debt compared to equity with a ratio of .883 in 2013, reaching 3.4 in 2015. In such a short amount of time the company has increased its debt-to-equity, which could be a negative sign for investors that the company is improperly managing its debt. Asset management ratios let investors know how well a company is utilizing its assets to generate income for the organization. Comparing sales to total assets, the total asset turnover for Starbucks is 1.5 in 2013 and increases to 1.65 in 2015, showing a pattern of consistency through many of the company's ratios. Starbucks outperforms its competitor in this ratio, who sees a decline from .95 to .86 over 3 years-time. As it relates to the turnover of its inventory, Starbucks outperforms with a ratio of 6.5 in 2015 compared to McDonalds at a 148. Starbucks is able to turn its product and inventory much quicker, probability resulting in cash-on-hand faster as well. McDonald's is forecasted to continue its negative increase, while Starbucks is forecasted to see a stark change to 1.65 in 2018. The positive change for Starbucks may be a result of a just-in-time inventory system that allows inventory to arrive and be stocked just in time for it to be purchased. Market value ratios are important to investors, as they provide insight to how much an investor can expect to earn off investing in the company, and how well the company utilizers shareholder investment to maximize shareholder profit. McDonald's and Starbucks see opposite trends again in this last category. McDonalds earnings per share has been decreasing and is forecasted to decrease through 2018. The company had earnings per share of $5.55 in 2013, but is only anticipated to pay $4.44 in 2018, almost a 20% decrease. On the other hand, Starbucks does not have as high earnings per share, but sees a steady and strong increase through 2018. The company begins with an EPS of $1.35 in 2013 and is forecasted at $2.82 in 2018. Overall, Starbucks outperforms McDonald's in many ratio categories. Starbucks sees a trend of consistent and safe ratios while McDonald's has some extreme changes year-over-year, such as its liquidity ratios more than doubling from 2014 to 2015. Starbucks also does a really strong job at maximizing its assets compared to its rival, with a forecasted inventory turnover ratio of only 1.620 in 2018 compared to that of McDonald's at a forecasted 155. 2. What are the most important things that you learned from the study of this week's readings and assignments? Remember to always include appropriate references. The article, Crunching the Numbers, by John Daly gave a great overview of the most important ratios to look at when assuming the role of an investor and looking to value a company, and made sure to note that although the ratios are easily and readily available, the trick is in the interpretation of said ratios (2004). Most importantly, I learned some of the necessary and required questions that I should ask if and when I should become a member of management or the board at a firm. Robert Bostrom states that \"implementation of a proactive, preventative approach to risk management and compliance at both the Board and management level is critical (2004). It was important to note that within Bostroms article, he poses the question asking if the firm employs a Chief Ethics Officer which I hadn't considered a requirement before. I also learned the problems with viewing only certain ratios by themselves instead of together as one picture. The Morgan Stanley publication detailed all the problems that arise with various ratios from profit margin to market share. References: Bostrom, R. (2004, August). Compliance, risk management and internal controls\" a checklist for corporate counsel - part II. The Metropolitan Corporate Counsel. Retrieved from: https://learn.umuc.edu/d2l/le/199936/discussions/posts/28120213 /ViewAttachment?fileId=7890196. Constable, S. (2015). What is the interest coverage ratio. Wall Street Journal. Retrieved Online from: http://www.wsj.com/articles/what-is-the-interestcoverage-ratio-1447038108. Daly, J. (2004, February). Crunching the numbers: value investors have used the same ratios for decades. Report on Business Magazine. Retrieved from: https://learn.umuc.edu/d2l/le/199936/discussions/threads/892151 6/View. Drake, P. (n.d.). Financial ratio analysis. James Madison University. Retrieved online from: http://educ.jmu.edu/~drakepp/principles/module2/fin_rat.pdf. Petrfoff, J. (2000). Financial analysis. Professional Education Testing and Certification Organization International. Retrieved online from: http://www.peoi.org/Courses/Coursesen/finanal/FN501EN.html. A sample ratio analysis is attached (it is just a sample, you may develop your own presentation). It uses the format of presenting the data in a table and then discussing the ratios in the written analysis. It is always necessary to include the actual ratio data in the written analysis even if they are presented in an accompanying table. SAMPLE 1. Prepare a written analysis of the financial ratios resulting from the Week 2 eVal Financial Forecast of the selected company. This must include trend analysis (historical and projected) and comparative analysis (cross-sectional or industry). The analysis needs to examine strengths and weaknesses revealed by the data. Remember, in a written ratio analysis the actual ratio data need to be included in the written analysis in addition to presentation in any accompanying tables or figures (graphs). The following Financial Ratio Analysis is based on the data provided below in Graph 1 - Financial Ratios KO and Graph 2 - Financial Ratio PEP. The data has been retrieved from the eVal Model attached to this post and from Yahoo! Finance, NASDAQ and Reuters for PepsiCo (PEP). Graph 1 - Financial Ratios KO Ratio 2012 2013 2014 2015 2016 2017 Profitability ROA % (Net) ROE % (Net) 14.2 28.0 12.5 26.0 9.8 22.4 9.6 23.3 9.7 23.4 9.7 23.5 Solvency Quick Ratio Current Ratio 0.766 1.090 0.904 1.126 0.808 1.019 0.808 1.019 0.808 1.019 0.808 1.019 Debt Total Debt to Equity 0.995 1.118 1.378 1.378 1.378 1.4 Asset Management Inventory Turnover Total Asset Turnover 5.23 0.761 5.02 0.687 5.13 0.644 5.13 0.631 5.13 0.633 5.13 0.634 Market Value P/E EPS Dividend Payout Ratio 16.81 1.97 0.51 20.43 1.9 0.57 25.38 1.6 0.75 21.75 1.62 0.75 22.42 1.63 0.75 21.11 1.64 0.75 Graph 2 - Financial Ratios PEP Ratio 2012 2013 2014 2015 2016 2017 Profitability ROA % (Net) ROE % (Net) 13.9 28.6 14.1 28.8 14.3 31.0 15.7 37.7 15.7 37.8 15.8 37.8 Solvency Quick Ratio Current Ratio 0.799 1.095 0.932 1.245 0.850 1.142 0.850 1.142 0.850 1.142 0.850 1.142 Debt Total Debt to Equity 1.265 1.214 1.644 1.644 1.644 1.644 Asset Management Inventory Turnover Total Asset Turnover 8.08 1.331 8.47 1.268 9.09 1.327 9.09 1.440 9.09 1.442 9.09 1.444 Market Value P/E EPS Dividend Payout Ratio 16.04 3.92 0.54 18.14 4.32 0.51 23.66 4.27 0.59 21.78 3.67 0.59 21.32 4.68 0.59 19.56 5.05 0.59 Profitability Ratios The two profitability ratios analyzed are the ROE (Return on Equity) and the ROA (Return on Assets). Over the three most recent years (2012-2014) the ROA of KO decreased by 4.4 percent point, while PEP was able to increase its ROA by 0.4 percent point over the same time period. The forecast for the next three years indicates ROA for KO of 9.6-9.7% and 15.715.8%. This indicates that KO is not using its assets as efficiently as PEP to generate profits. KO's ROE decreased from 28% in 2012 to 22.4% in 2014, this is a 5.6 percent point decrease within the three most recent years, the forecast for KO's ROE according to eVal is a slight increase to 23.5% by 2017. PEP's ROE increased from 28.6% in 2012 to 31% in 2014 - a 2.4 percent point increase. The forecasted ROE for PEP increases by over 6 percent points to 37.8% in 2017. Again, the ROE indicated that PEP has been able to use shareholder equity more efficiently than KO. KO was faced with reduced sales combined with slightly increased inventory over the past few years in its carbonated drink sector (which makes up over 70% of KO's profits) and has not been able to turn its assets or shareholder equity into profits as efficiently as PEP, that has a more diversified product portfolio and while suffering reduced sales in its carbonated drink sector due to more health-conscious customers as well, could balance out the decrease by continued growth in other sectors (Quaker, Tropicana,..). While KO is still profitable, increased interest expenses and other factors like increased inventory while having reduced sales affected the company's profitability. Solvency Ratios To measure KO's solvency/ liquidity the current ratio and quick ratio will be analyzed. KO's current ratio has only slightly changed in the three most recent years and is predicted to stay at 1.019 in the next three years. The current ratio indicates the company is just able to cover its current liabilities with current assets. PEP has been able to improve its current ratio to 1.142 in 2014 from 1.095 in 2012. However, this is very similar to KO and thus seems to be the industry standard of current assets to current liabilities. Both companies are able to pay shortterm obligations. The quick ratio is a refinement to the current ratio as it only compares the most liquid assets with current liabilities. KO's quick ratio increased from 2012 to 2013 by 0.138 from 0.766 to 0.904. However, from 2013 to 2014 the quick ratio decreased to 0.81 and is expected to stay around 0.81 in the coming three years. Pep's quick ratio has very similar values for the time period analyzed. After an initial increase from 0.799 to 0.932 it decreased to 0.85 where it is estimated to stay in the next three years as well. Comparing the two direct competitor's quick ratios with each other it seems KO has been able to improve its liquidity with the industry. A quick ratio below 1 indicates the company has less very liquid current assets than current liabilities, which seems to be normal in the industry, however. Considering, KO is in the food industry and inventories cannot be too large due to possible decline in product quality this seems to be acceptable. Debt Ratio KO's Debt to Equity Ratio has increased by 27.8% from 2012 to 2014. This shows the significant increase in short- and long-term debt over the three most recent years. KO has a very high credit rating of AA by S&P and thus a very low cost of debt financing, thus the company has financed projects more with debt in the three most recent years than equity. PEP has also significantly increased its Debt to Equity ratio by 23%. PEP had a debt to equity ratio of 1.265 in 2012 and 1.644 in 2014. Compared to KO's 1.378 in 2014 and projected 1.4 by 2017, KO is less leveraged than its direct competitor PEP. Asset Management Ratios Both KO's asset turnover and inventory turnover have decreased from 2012 to 2014. The Total Asset Turnover was reduced to 0.644 from 0.761, from 2012 to 2014 and the Inventory Turnover was reduced by 1.9% from 5.23 to 5.13 from 2012 to 2014. Both asset management ratios indicate that KO has not been able to turn its assets or inventory into profits as efficiently as it used to. Future predictions indicate similar results for the next three years. PEP's Total Asset Ratio and Inventory Turnover Ratio have actually increased from 2012 to 2014. PEP's asset turnover moved from 1.33 in 2012 to 1.32 in 2014 and is predicted to further increase to 1.44 by 2017. The competition's inventory turnover improved by 11% from 2012 to 2014 (2012: 8.08, 2014: 9.09). This shows PEP has been able to turn its assets and inventory more efficiently into profits than KO. This difference could be explained by the product portfolio PEP holds compared to KO. Since KO relies heavily on sales of carbonated drinks currently, the drop in sales affected the company's financial ratios more than its competitor's that has a more diversified product offering and thus did not feel the reduced soda sales as drastically. Market Value Ratios The P/E (Price to earnings), EPS (earnings per share) and dividend payout ratios will be analyzed in this part. KO's investors faced a P/E of 25.38 in 2014, an increase of 33.77% from 2012's 16.81 P/E ratio. This means an investor in common stock paid 25.38 dollars per one dollar of earnings in 2014. The P/E ratio is predicted to decrease to 21.11 by 2017. EPS is used as an indicator of a company's profitability as it measures the amount of earnings paid out to each common stock share. KO's EPS have decreased from 1.97 in 2012 to 1.6 in 2014, over the next three years the EPS is predicted to slightly increase by 0.4 by 2017. The Dividend Payout Ratio shows the relation between how much of the earnings were paid out to shareholders as a percentage. The dividend payout ratio indicates how much money the company returns to its shareholders. KO's dividend payout ratio increased from 0.51% in 2012 to 0.75% in 2014. The company has been able to increase the percentage of earnings paid out to shareholders and is predicted to continue to keep the 0.75% payout ratio over the next three years. PEP's P/E increased from 16.04 in 2012 to 23.66 in 2014, thus by 32%, this means in 2014 investors paid 23.66 dollars for every dollar of earnings, 32% more than two years prior. The P/E for PEP is predicted to decrease over the next three years to 19.56 by 2017. The competitor's EPS increased from 3.92 in 2012 to 4.27 In 2014 and are predicted to slowly grow to 5.05 by 2017. PEP was able to increase its earnings per share while KO's slightly decreased over the three most recent years. PEP's dividend payout ratio is very similar to KO's and was at 0.59% in 2014 and is predicted to stay that way in the next three years. Both companies are profitable and pay out dividends to their shareholders, however, PEP has a higher EPS and also less equity and thus is more efficient than KO at using its capital to generate income (Investopedia, 2003). Other Valuation Ratios The Financial Ratios analyzed so far all have certain problems that can lead to wrong valuations of a company if solely based on those financial ratios. Thus, two other valuation ratios will be introduced briefly: Altman Z (predicts performance by predicting a company's likelihood for bankruptcy) and EVA/MVA (analyze managers' performance and whether the manager is creating shareholder value). Altman Z Altman'sZScore Company CocaColaCompany(KO) Constants 1.2 ####### ####### Total Working Capital (Current Assets Total Assets ####### ####### Retained Earnings Total Assets 1.4 ####### ####### EBIT Total Assets 3.3 ####### ####### Market Value of Equity Book Value of Debt (LT + ST) 0.6 ####### ####### Sales Total Assets 1.0 5.59 =ZScore Above 2.675 signals solvency Below 2.675 signals insolvency 4,366.0 $43.61 Above 2.99 clearly shows non-bankrupt sector Below 1.81 clearly bankrupt Number of Weighted Average Shares Outstanding Market Price of Stock The Altman Z score of 5.59 for KO clearly indicates that the company is in the non-bankrupt sector and will continue to perform well in the next years. If KO is able to implement new strategies (healthier products) the company will be able to increase its Z Score even further by increasing sales again. version 4.00 2012, Russell Lundholm and Richard Sloan. STEPS: 1) enter financial data on the Financial Statements Sheet, 2) examine the Ratio Analysis and Cash Flow Analysis, 3) enter forecasts on the Forecasting Assumptions Sheet to create future Financial Statement predictions, 4) enter cost of capital assumptions on the Valuation Parameters Sheet to determine the company's value, 5) evaluate the details of the resulting valuation for either the Residual Income of Discounted Cash Flow models. Other Useful Links: Where to buy the latest 'Equity Valuation and Analysis' textbook Check here for updated versions of eVal Supplements to the textbook cases version 4.00 tement predictions, he company's value, ounted Cash Flow models. Financial Statements Company Name and Ticker Common Shares Outstanding Estimated Price/Share=-$16.81 Fiscal Year End (YYYY-MM-DD) ($000s) Data can be entered manually in financial statements or as a block cut-andpaste from the Case Data Sheet to the Raw Data Input section below. Jump to Raw Data Input Wal-Mart Stores Inc. WMT Link to Form 10-Ks 3,207,000 (in 000s at most recent fiscal year end) Actual 2012/10/31 Actual 2013/10/31 Actual 2014/10/31 Actual 2015/10/31 Actual 2016/01/31 Forecast 2017/01/31 Forecast 2018/01/31 Forecast 2019/01/31 Forecast 2020/01/31 Forecast 2021/01/31 Forecast 2022/01/31 Forecast 2023/01/31 Forecast 2024/01/31 Forecast 2025/01/31 Forecast 2026/01/31 Forecast 2027/01/31 Forecast 2028/01/31 Income Statement Sales (Net) Cost of Goods Sold Gross Profit R&D Expense SG&A Expense EBITDA Depreciation & Amortization EBIT Net Interest Expense Non-Operating Income (Loss) EBT Income Taxes Other Income (Loss) Net Income Before Ext. Items Ext. Items & Disc. Ops. Minority Interest in Earnings Preferred Dividends Net Income (available to common) 443,854,000 (335,127,000) 108,727,000 0 (85,265,000) 23,462,000 (8,130,000) 15,332,000 (2,160,000) (2,782,000) 10,390,000 (7,944,000) 0 2,446,000 0 (688,000) 0 1,758,000 466,114,000 (352,488,000) 113,626,000 0 (88,873,000) 24,753,000 (8,501,000) 16,252,000 (2,064,000) 1,012,000 15,200,000 (7,981,000) 0 7,219,000 0 (757,000) 0 6,462,000 473,076,000 (358,069,000) 115,007,000 0 (91,353,000) 23,654,000 (8,870,000) 14,784,000 (2,216,000) (2,786,000) 9,782,000 (8,105,000) 0 1,677,000 0 (673,000) 0 1,004,000 482,229,000 (365,086,000) 117,143,000 0 (93,418,000) 23,725,000 (9,173,000) 14,552,000 (2,348,000) (4,718,000) 7,486,000 (7,985,000) 0 (499,000) 0 (736,000) 0 (1,235,000) 478,614,000 (360,984,000) 117,630,000 0 (97,041,000) 20,589,000 (9,454,000) 11,135,000 (2,467,000) (4,970,000) 3,698,000 (6,558,000) 0 (2,860,000) 0 (386,000) 0 (3,246,000) 476,657,583 (359,508,416) 117,149,167 0 (96,644,328) 20,504,839 (9,233,937) 11,270,902 (2,415,938) (4,949,684) 3,905,280 (6,925,588) 0 (3,020,308) 0 (407,636) 0 (3,427,945) 476,333,978 (359,264,344) 117,069,634 0 (96,578,716) 20,490,918 (9,211,897) 11,279,021 (2,410,172) (4,946,324) 3,922,525 (6,956,171) 0 (3,033,646) 0 (409,436) 0 (3,443,082) 477,634,305 (360,245,087) 117,389,218 0 (96,842,363) 20,546,856 (9,221,339) 11,325,517 (2,412,642) (4,959,827) 3,953,048 (7,010,300) 0 (3,057,252) 0 (412,622) 0 (3,469,874) 480,566,325 (362,456,498) 118,109,827 0 (97,436,842) 20,672,985 (9,262,250) 11,410,735 (2,423,346) (4,990,273) 3,997,116 (7,088,450) 0 (3,091,334) 0 (417,222) 0 (3,508,556) 485,154,483 (365,917,014) 119,237,469 0 (98,367,110) 20,870,358 (9,334,942) 11,535,416 (2,442,365) (5,037,917) 4,055,134 (7,191,339) 0 (3,136,204) 0 (423,278) 0 (3,559,482) 491,440,224 (370,657,895) 120,782,329 0 (99,641,571) 21,140,758 (9,440,052) 11,700,706 (2,469,865) (5,103,189) 4,127,651 (7,319,939) 0 (3,192,288) 0 (430,847) 0 (3,623,135) 499,482,610 (376,723,686) 122,758,923 0 (101,272,198) 21,486,725 (9,578,552) 11,908,173 (2,506,102) (5,186,703) 4,215,368 (7,475,496) 0 (3,260,128) 0 (440,003) 0 (3,700,131) 509,359,228 (384,172,907) 125,186,321 0 (103,274,724) 21,911,597 (9,751,763) 12,159,835 (2,551,420) (5,289,263) 4,319,151 (7,659,544) 0 (3,340,393) 0 (450,836) 0 (3,791,229) 521,167,431 (393,078,982) 128,088,449 0 (105,668,887) 22,419,562 (9,961,374) 12,458,188 (2,606,263) (5,411,881) 4,440,044 (7,873,934) 0 (3,433,890) 0 (463,455) 0 (3,897,345) 535,025,916 (403,531,437) 131,494,479 0 (108,478,753) 23,015,726 (10,209,476) 12,806,250 (2,671,175) (5,555,790) 4,579,285 (8,120,862) 0 (3,541,578) 0 (477,989) 0 (4,019,567) 551,076,693 (415,637,380) 135,439,313 0 (111,733,116) 23,706,198 (10,498,588) 13,207,610 (2,746,817) (5,722,464) 4,738,329 (8,402,910) 0 (3,664,581) 0 (494,590) 0 (4,159,171) 567,608,994 (428,106,501) 139,502,493 0 (115,085,109) 24,417,383 (10,813,546) 13,603,838 (2,829,222) (5,894,137) 4,880,479 (8,654,997) 0 (3,774,518) 0 (509,428) 0 (4,283,946) 6,550,000 5,937,000 40,714,000 1,774,000 54,975,000 109,603,000 0 20,651,000 5,456,000 190,685,000 7,781,000 6,768,000 43,803,000 1,588,000 59,940,000 113,929,000 0 20,497,000 5,987,000 200,353,000 7,281,000 6,677,000 44,858,000 2,369,000 61,185,000 115,364,000 0 19,510,000 6,149,000 202,208,000 9,135,000 6,778,000 45,141,000 2,224,000 63,278,000 114,280,000 0 18,102,000 5,455,000 201,115,000 8,705,000 5,624,000 44,469,000 1,441,000 60,239,000 110,171,000 0 16,695,000 6,131,000 193,236,000 8,669,417 5,601,011 44,287,225 1,435,110 59,992,763 109,720,657 0 16,626,756 6,105,938 192,446,115 8,663,531 5,597,208 44,257,159 1,434,135 59,952,033 109,646,167 0 16,615,468 6,101,793 192,315,462 8,687,181 5,612,488 44,377,975 1,438,050 60,115,694 109,945,486 0 16,660,826 6,118,450 192,840,457 8,740,509 5,646,941 44,650,395 1,446,878 60,484,722 110,620,401 0 16,763,101 6,156,009 194,024,233 8,823,958 5,700,855 45,076,690 1,460,692 61,062,194 111,676,538 0 16,923,145 6,214,783 195,876,660 8,938,283 5,774,716 45,660,711 1,479,617 61,853,326 113,123,438 0 17,142,404 6,295,303 198,414,470 9,084,557 5,869,219 46,407,945 1,503,831 62,865,551 114,974,695 0 17,422,938 6,398,325 201,661,509 9,264,192 5,985,275 47,325,602 1,533,567 64,108,636 117,248,170 0 17,767,454 6,524,843 205,649,103 9,478,959 6,124,028 48,422,726 1,569,119 65,594,832 119,966,271 0 18,179,348 6,676,105 210,416,556 9,731,016 6,286,874 49,710,346 1,610,844 67,339,079 123,156,323 0 18,662,759 6,853,631 216,011,792 10,022,947 6,475,480 51,201,656 1,659,169 69,359,252 126,851,012 0 19,222,642 7,059,240 222,492,146 10,323,635 6,669,744 52,737,706 1,708,944 71,440,029 130,656,543 0 19,799,321 7,271,017 229,166,910 4,047,000 6,805,000 7,670,000 1,592,000 2,708,000 54,788,000 56,888,000 56,208,000 57,562,000 58,094,000 1,164,000 2,211,000 966,000 1,021,000 521,000 2,301,000 5,914,000 4,501,000 5,078,000 3,296,000 62,300,000 71,818,000 69,345,000 65,253,000 64,619,000 44,070,000 38,394,000 41,771,000 40,889,000 38,214,000 3,009,000 3,023,000 2,788,000 2,606,000 5,816,000 7,862,000 7,613,000 8,017,000 8,805,000 7,321,000 117,241,000 120,848,000 121,921,000 117,553,000 115,970,000 4,446,000 5,395,000 5,084,000 4,543,000 3,065,000 0 0 0 0 0 4,034,000 3,952,000 2,685,000 2,785,000 2,122,000 68,691,000 72,978,000 76,566,000 85,777,000 90,021,000 72,725,000 76,930,000 79,251,000 88,562,000 92,143,000 194,412,000 203,173,000 206,256,000 210,658,000 211,178,000 Error! A =L+E? Error! A =L+E? Error! A =L+E? Error! A =L+E? Error! A =L+E? 2,696,931 57,856,531 518,870 3,282,527 64,354,859 38,057,794 5,792,226 7,291,074 115,495,953 3,052,471 0 (12,695,365) 86,593,055 73,897,691 192,446,115 2,695,100 57,817,252 518,518 3,280,299 64,311,168 38,031,956 5,788,294 7,286,124 115,417,542 3,050,399 0 (9,302,452) 83,149,974 73,847,521 192,315,462 2,702,457 57,975,085 519,934 3,289,253 64,486,729 38,135,778 5,804,095 7,306,014 115,732,616 3,058,726 0 (5,630,985) 79,680,099 74,049,115 192,840,457 2,719,046 58,330,973 523,125 3,309,445 64,882,589 38,369,880 5,839,724 7,350,863 116,443,056 3,077,503 0 (1,667,868) 76,171,543 74,503,675 194,024,233 2,745,006 58,887,882 528,120 3,341,041 65,502,049 38,736,212 5,895,478 7,421,045 117,554,784 3,106,885 0 2,602,930 72,612,061 75,214,991 195,876,660 2,780,571 59,650,843 534,962 3,384,328 66,350,704 39,238,085 5,971,861 7,517,193 119,077,843 3,147,138 0 7,200,563 68,988,926 76,189,489 198,414,470 2,826,075 60,627,025 543,717 3,439,713 67,436,529 39,880,213 6,069,590 7,640,211 121,026,544 3,198,641 0 12,147,530 65,288,795 77,436,325 201,661,509 2,881,957 61,825,845 554,468 3,507,729 68,769,998 40,668,793 6,189,608 7,791,287 123,419,686 3,261,890 0 17,469,962 61,497,566 78,967,527 205,649,103 2,948,767 63,259,121 567,322 3,589,046 70,364,256 41,611,596 6,333,099 7,971,908 126,280,859 3,337,508 0 23,197,969 57,600,221 80,798,189 210,416,556 3,027,179 64,941,259 582,408 3,684,484 72,235,329 42,718,099 6,501,504 8,183,891 129,638,823 3,426,257 0 29,366,059 53,580,654 82,946,713 216,011,792 3,117,994 66,889,496 599,880 3,795,018 74,402,389 43,999,642 6,696,549 8,429,408 133,527,987 3,529,044 0 36,013,631 49,421,483 85,435,114 222,492,146 3,211,534 68,896,181 617,876 3,908,869 76,634,460 45,319,631 6,897,445 8,682,290 137,533,827 3,634,916 0 42,860,631 45,137,536 87,998,168 229,166,910 Balance Sheet Operating Cash and Market. Sec. Receivables Inventories Other Current Assets Total Current Assets PP&E (Net) Investments Intangibles Other Assets Total Assets Current Debt Accounts Payable Income Taxes Payable Other Current Liabilities Total Current Liabilities Long-Term Debt Other Liabilities Deferred Taxes Total Liabilities Minority Interest Preferred Stock Paid in Common Capital (Net) Retained Earnings Total Common Equity Total Liabilities and Equity Statement of Retained Earnings Beg. Retained Earnings +Net Income -Common Dividends +/-Clean Surplus Plug (Ignore) =End. Retained Earnings 0 68,691,000 6,462,000 0 (2,175,000) 72,978,000 72,978,000 1,004,000 0 2,584,000 76,566,000 76,566,000 (1,235,000) 0 10,446,000 85,777,000 85,777,000 (3,246,000) 0 7,490,000 90,021,000 90,021,000 (3,427,945) 0 0 86,593,055 86,593,055 (3,443,082) 0 0 83,149,974 83,149,974 (3,469,874) 0 0 79,680,099 79,680,099 (3,508,556) 0 0 76,171,543 76,171,543 (3,559,482) 0 0 72,612,061 72,612,061 (3,623,135) 0 0 68,988,926 68,988,926 (3,700,131) 0 0 65,288,795 65,288,795 (3,791,229) 0 0 61,497,566 61,497,566 (3,897,345) 0 0 57,600,221 57,600,221 (4,019,567) 0 0 53,580,654 53,580,654 (4,159,171) 0 0 49,421,483 49,421,483 (4,283,946) 0 0 45,137,536 2,954,504 (1,196,504) 1,758,000 0.7646 125,288,000 52,563,000 72,725,000 8,199,264 (1,737,264) 6,462,000 0.5251 127,524,000 50,594,000 76,930,000 2,056,905 (1,052,905) 1,004,000 0.8286 133,776,000 54,525,000 79,251,000 (655,512) (579,488) (1,235,000) 1.0667 135,586,000 47,024,000 88,562,000 (4,767,956) 1,521,956 (3,246,000) 1.7734 136,130,000 43,987,000 92,143,000 (4,888,773) 1,460,829 (3,427,945) 1.7734 117,704,886 43,807,196 73,897,691 (4,897,651) 1,454,569 (3,443,082) 1.7734 117,624,976 43,777,455 73,847,521 (4,923,168) 1,453,293 (3,469,874) 1.7734 117,946,076 43,896,961 74,049,115 (4,965,528) 1,456,972 (3,508,556) 1.7734 118,670,103 44,166,428 74,503,675 (5,025,107) 1,465,625 (3,559,482) 1.7734 119,803,094 44,588,103 75,214,991 (5,102,460) 1,479,324 (3,623,135) 1.7734 121,355,283 45,165,794 76,189,489 (5,198,325) 1,498,194 (3,700,131) 1.7734 123,341,253 45,904,929 77,436,325 (5,313,638) 1,522,409 (3,791,229) 1.7734 125,780,166 46,812,639 78,967,527 (5,449,550) 1,552,205 (3,897,345) 1.7734 128,696,061 47,897,871 80,798,189 (5,607,440) 1,587,874 (4,019,567) 1.7734 132,118,248 49,171,535 82,946,713 (5,788,945) 1,629,774 (4,159,171) 1.7734 136,081,795 50,646,681 85,435,114 (5,962,613) 1,678,667 (4,283,946) 1.7734 140,164,249 52,166,081 87,998,168 2015/10/31 482,229,000 (365,086,000) 0 (93,418,000) (9,173,000) (2,348,000) (4,718,000) (7,985,000) (736,000) 0 0 0 9,135,000 6,778,000 45,141,000 2,224,000 114,280,000 0 18,102,000 5,455,000 1,592,000 57,562,000 1,021,000 5,078,000 40,889,000 2,606,000 8,805,000 4,543,000 0 2,785,000 85,777,000 0 2016/01/31 478,614,000 (360,984,000) 0 (97,041,000) (9,454,000) (2,467,000) (4,970,000) (6,558,000) (386,000) 0 0 0 8,705,000 5,624,000 44,469,000 1,441,000 110,171,000 0 16,695,000 6,131,000 2,708,000 58,094,000 521,000 3,296,000 38,214,000 5,816,000 7,321,000 3,065,000 0 2,122,000 90,021,000 0 Values for Dupont Analysis and Valuation Net Operating Income Net Financial Expense Net Income Effective Tax Rate Net Operating Assets Net Financial Obligations Total Common Equity Raw Data Inputs cut-and-paste raw data block from DataMaker file here Company Name and Ticker Common Shares Outstanding Fiscal Year End (YYYY-MM-DD) Sales (Net) Cost of Goods Sold R&D Expense SG&A Expense Depreciation & Amortization Interest Expense Non-Operating Income (Loss) Income Taxes Minority Interest in Earnings Other Income (Loss) Ext. Items & Disc. Ops. Preferred Dividends Operating Cash and Market. Sec. Receivables Inventories Other Current Assets PP&E (Net) Investments Intangibles Other Assets Current Debt Accounts Payable Income Taxes Payable Other Current Liabilities Long-Term Debt Other Liabilities Deferred Taxes Minority Interest Preferred Stock Paid in Common Capital (Net) Retained Earnings Common Dividends Wal-Mart Stores Inc. 3,207,000 2012/10/31 443,854,000 (335,127,000) 0 (85,265,000) (8,130,000) (2,160,000) (2,782,000) (7,944,000) (688,000) 0 0 0 6,550,000 5,937,000 40,714,000 1,774,000 109,603,000 0 20,651,000 5,456,000 4,047,000 54,788,000 1,164,000 2,301,000 44,070,000 3,009,000 7,862,000 4,446,000 0 4,034,000 68,691,000 0 WMT 2013/10/31 466,114,000 (352,488,000) 0 (88,873,000) (8,501,000) (2,064,000) 1,012,000 (7,981,000) (757,000) 0 0 0 7,781,000 6,768,000 43,803,000 1,588,000 113,929,000 0 20,497,000 5,987,000 6,805,000 56,888,000 2,211,000 5,914,000 38,394,000 3,023,000 7,613,000 5,395,000 0 3,952,000 72,978,000 0 2014/10/31 473,076,000 (358,069,000) 0 (91,353,000) (8,870,000) (2,216,000) (2,786,000) (8,105,000) (673,000) 0 0 0 7,281,000 6,677,000 44,858,000 2,369,000 115,364,000 0 19,510,000 6,149,000 7,670,000 56,208,000 966,000 4,501,000 41,771,000 2,788,000 8,017,000 5,084,000 0 2,685,000 76,566,000 0 A Windows vs Macintosh issue can cause the fiscal year end dates to be off by roughly 4 years. If this occurs, select and copy the 1462 cell below, select the cells with the dates, choose Paste Special Values and select Subtract or Add. 1462 Ratio Analysis Company Name Wal-Mart Stores Inc. Fiscal Year End Date Actual Actual Actual Actual Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 2012/10/31 2013/10/31 2014/10/31 2015/10/31 2016/01/31 2017/01/31 2018/01/31 2019/01/31 2020/01/31 2021/01/31 2022/01/31 2023/01/31 2024/01/31 2025/01/31 2026/01/31 2027/01/31 2028/01/31 Annual Growth Rates Sales Assets Common Equity Earnings Free Cash Flow to Investors Sustainable Growth Rate 5.0% 5.1% 5.8% 267.6% 1.5% 0.9% 3.0% -84.5% -113.3% 1.3% 1.9% -0.5% 11.7% -223.0% #N/A -1.5% -0.7% -3.9% 4.0% #N/A -21.5% -3.6% -0.4% -0.4% -19.8% #N/A -141.7% -4.1% -0.1% -0.1% -0.1% #N/A #N/A -4.7% 0.3% 0.3% 0.3% #N/A #N/A -4.7% 0.6% 0.6% 0.6% #N/A #N/A -4.7% 1.0% 1.0% 1.0% #N/A #N/A -4.8% 1.3% 1.3% 1.3% #N/A #N/A -4.8% 1.6% 1.6% 1.6% #N/A #N/A -4.8% 2.0% 2.0% 2.0% #N/A #N/A -4.8% 2.3% 2.3% 2.3% #N/A #N/A -4.9% 2.7% 2.7% 2.7% #N/A #N/A -4.9% 3.0% 3.0% 3.0% #N/A #N/A -4.9% 3.0% 3.0% 3.0% #N/A #N/A -4.9% 0.086 0.080 0.065 0.013 0.019 0.016 (0.015) (0.018) (0.005) (0.036) (0.078) (0.035) (0.041) (0.087) (0.039) (0.047) (0.098) (0.042) (0.047) (0.099) (0.042) (0.047) (0.099) (0.042) (0.048) (0.100) (0.042) (0.048) (0.100) (0.042) (0.048) (0.100) (0.042) (0.048) (0.101) (0.043) (0.049) (0.101) (0.043) (0.049) (0.102) (0.043) (0.049) (0.102) (0.043) (0.049) (0.102) (0.043) 0.004 0.014 2.384 2.657 0.088 0.002 2.350 2.622 0.013 (0.003) 2.391 2.484 (0.015) (0.007) 2.427 2.334 (0.038) (0.007) 2.472 2.431 (0.043) (0.007) 2.476 2.604 (0.047) (0.007) 2.480 2.604 (0.047) (0.007) 2.484 2.604 (0.047) (0.007) 2.489 2.604 (0.048) (0.007) 2.493 2.604 (0.048) (0.007) 2.497 2.604 (0.048) (0.007) 2.501 2.604 (0.048) (0.007) 2.505 2.604 (0.049) (0.008) 2.509 2.604 (0.049) (0.008) 2.513 2.604 (0.049) (0.008) 2.513 2.604 (0.049) 0.007 0.018 3.687 0.065 0.034 0.031 0.689 0.086 0.004 3.621 0.016 0.020 (0.004) 0.673 0.013 (0.001) 3.581 (0.005) 0.011 (0.016) 0.605 (0.015) (0.010) 3.523 (0.035) (0.033) (0.002) 0.504 (0.036) (0.010) 3.756 (0.039) (0.033) (0.005) 0.529 (0.041) (0.010) 4.048 (0.042) (0.033) (0.008) 0.593 (0.047) (0.010) 4.055 (0.042) (0.033) (0.009) 0.593 (0.047) (0.010) 4.062 (0.042) (0.033) (0.009) 0.593 (0.047) (0.010) 4.069 (0.042) (0.033) (0.009) 0.593 (0.048) (0.010) 4.076 (0.042) (0.033) (0.009) 0.593 (0.048) (0.010) 4.082 (0.042) (0.033) (0.010) 0.593 (0.048) (0.010) 4.089 (0.043) (0.033) (0.010) 0.593 (0.048) (0.010) 4.096 (0.043) (0.033) (0.010) 0.593 (0.049) (0.010) 4.103 (0.043) (0.033) (0.010) 0.593 (0.049) (0.011) 4.109 (0.043) (0.033) (0.011) 0.593 (0.049) (0.011) 4.109 (0.043) (0.033) (0.011) 0.593 (0.049) 0.245 0.053 0.035 0.008 0.007 0.244 0.053 0.035 0.017 0.018 0.243 0.050 0.031 0.005 0.004 0.243 0.049 0.030 (0.002) (0.001) 0.246 0.043 0.023 (0.018) (0.010) 0.246 0.043 0.024 (0.018) (0.010) 0.246 0.043 0.024 (0.018) (0.010) 0.246 0.043 0.024 (0.018) (0.010) 0.246 0.043 0.024 (0.018) (0.010) 0.246 0.043 0.024 (0.018) (0.010) 0.246 0.043 0.024 (0.018) (0.010) 0.246 0.043 0.024 (0.018) (0.010) 0.246 0.043 0.024 (0.018) (0.010) 0.246 0.043 0.024 (0.018) (0.010) 0.246 0.043 0.024 (0.019) (0.010) 0.246 0.043 0.024 (0.019) (0.011) 0.246 0.043 0.024 (0.019) (0.011) 3.687 (111.631) 4.974 43.759 57.318 4.170 3.621 (170.079) 5.187 45.189 57.473 4.126 3.581 (1104.763) 5.092 44.989 56.828 4.200 3.523 (465.804) 4.729 45.303 58.580 4.265 3.756 (285.666) 4.298 45.056 58.891 4.335 4.048 (286.155) 4.290 44.979 58.765 4.343 4.055 (286.643) 4.283 44.903 58.641 4.350 4.062 (287.128) 4.276 44.827 58.517 4.358 4.069 (287.612) 4.269 44.751 58.395 4.365 4.076 (288.095) 4.262 44.676 58.273 4.372 4.082 (288.576) 4.254 44.602 58.152 4.380 4.089 (289.055) 4.247 44.528 58.032 4.387 4.096 (289.532) 4.240 44.454 57.913 4.394 4.103 (290.008) 4.233 44.381 57.795 4.401 4.109 (290.483) 4.227 44.309 57.678 4.408 4.109 (290.483) 4.227 44.309 57.678 4.408 0.662 0.588 0.332 0.397 0.624 0.226 0.119 0.480 0.202 0.240 0.444 0.200 0.220 0.552 0.151 0.150 0.552 0.151 0.151 0.552 0.152 0.153 0.552 0.153 0.154 0.552 0.153 0.156 0.552 0.154 0.157 0.552 0.154 0.158 0.552 0.155 0.160 0.552 0.156 0.161 0.552 0.156 0.163 0.552 0.157 0.164 0.552 0.157 0.164 0.882 0.200 7.098 10.862 0.835 0.203 7.874 11.993 0.882 0.201 6.671 10.674 0.970 0.244 6.198 10.104 0.932 0.222 4.514 8.346 0.932 0.222 4.665 8.487 0.932 0.222 4.680 8.502 0.932 0.222 4.694 8.516 0.932 0.222 4.709 8.531 0.932 0.222 4.723 8.545 0.932 0.222 4.737 8.559 0.932 0.222 4.752 8.574 0.932 0.222 4.766 8.588 0.932 0.222 4.780 8.602 0.932 0.222 4.794 8.616 0.932 0.222 4.808 8.630 0.932 0.222 4.808 8.630 2012 2013 2014 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Profitability Return on Equity Return on Equity (b4 non-recurring) Return on Net Operating Assets Basic Dupont Model Net Profit Margin x Total Asset Turnover x Total Leverage = Return on Equity Advanced Dupont Model Net Operating Margin x Net Operating Asset Turnover = Return on Net Operating Assets Net Borrowing Cost (NBC) Spread (RNOA - NBC) Financial Leverage (LEV) ROE = RNOA + LEV*Spread Margin Analysis Gross Margin EBITDA Margin EBIT Margin Net Operating Margin (b4 non-rec.) Net Operating Margin Turnover Analysis Net Operating Asset Turnover Net Working Capital Turnover Avge Days to Collect Receivables Avge Inventory Holding Period Avge Days to Pay Payables PP&E Turnover Analysis of Leverage - Long-Term Capital Structure Debt to Equity Ratio FFO to Total Debt CFO to Total Debt Analysis of Leverage - Short-Term Liquidity Current Ratio Quick Ratio EBIT Interest Coverage EBITDA Interest Coverage Fiscal Year Cash Flow Analysis ($000) Company Name Wal-Mart Stores Inc. Fiscal Year End Date Pro Forma Statement of Cash Flows Operating: Net Income +Depreciation & Amortization +Increase in Deferred Taxes +Increase in Other Liabilities +Minority Interest in Earnings +Preferred Dividends =Funds From Operations -Increase in Receivables -Increase in Inventory -Increase in Other Current Assets +Increase in Accounts Payable +Increase in Taxes Payable +Increase in Other Curr. Liabilities =Cash From Operations Investing: -Capital Expenditures -Increase in Investments -Purchases of Intangibles -Increase in Other Assets =Cash From Investing Financing: +Increase in Debt -Dividends Paid to Minority Interest -Dividends Paid on Preferred +Increase in Pref. Stock -Dividends Paid on Common +/-Net Issuance of Common Stock +/-Clean Surplus Plug (Ignore) =Cash From Financing Net Change in Cash + Beginning Cash Balance = Ending Cash Balance Actual 2013/10/31 Actual 2014/10/31 Actual 2015/10/31 Actual 2016/01/31 Forecast 2017/01/31 Forecast 2018/01/31 Forecast 2019/01/31 Forecast 2020/01/31 Forecast 2021/01/31 Forecast 2022/01/31 Forecast 2023/01/31 Forecast 2024/01/31 Forecast 2025/01/31 Forecast 2026/01/31 Forecast 2027/01/31 6,462,000 8,501,000 (249,000) 14,000 757,000 0 15,485,000 (831,000) (3,089,000) 186,000 2,100,000 1,047,000 3,613,000 18,511,000 1,004,000 8,870,000 404,000 (235,000) 673,000 0 10,716,000 91,000 (1,055,000) (781,000) (680,000) (1,245,000) (1,413,000) 5,633,000 (1,235,000) 9,173,000 788,000 (182,000) 736,000 0 9,280,000 (101,000) (283,000) 145,000 1,354,000 55,000 577,000 11,027,000 (3,246,000) 9,454,000 (1,484,000) 3,210,000 386,000 0 8,320,000 1,154,000 672,000 783,000 532,000 (500,000) (1,782,000) 9,179,000 (3,427,945) 9,233,937 (29,926) (23,774) 407,636 0 6,159,928 22,989 181,775 5,890 (237,469) (2,130) (13,473) 6,117,511 (3,443,082) 9,211,897 (4,950) (3,932) 409,436 0 6,169,369 3,803 30,067 974 (39,279) (352) (2,229) 6,162,353 (3,469,874) 9,221,339 19,890 15,801 412,622 0 6,199,778 (15,280) (120,816) (3,915) 157,833 1,415 8,955 6,227,971 (3,508,556) 9,262,250 44,849 35,629 417,222 0 6,251,394 (34,453) (272,420) (8,828) 355,888 3,192 20,192 6,314,964 (3,559,482) 9,334,942 70,182 55,754 423,278 0 6,324,673 (53,914) (426,295) (13,814) 556,909 4,994 31,597 6,424,151 (3,623,135) 9,440,052 96,148 76,383 430,847 0 6,420,295 (73,861) (584,021) (18,925) 762,961 6,842 43,287 6,556,579 (3,700,131) 9,578,552 123,018 97,729 440,003 0 6,539,172 (94,503) (747,234) (24,214) 976,182 8,755 55,384 6,713,542 (3,791,229) 9,751,763 151,075 120,018 450,836 0 6,682,463 (116,056) (917,657) (29,736) 1,198,821 10,751 68,016 6,896,602 (3,897,345) 9,961,374 180,621 143,490 463,455 0 6,851,596 (138,753) (1,097,124) (35,552) 1,433,276 12,854 81,318 7,107,614 (4,019,567) 10,209,476 211,983 168,405 477,989 0 7,048,286 (162,845) (1,287,620) (41,725) 1,682,138 15,086 95,437 7,348,757 (4,159,171) 10,498,588 245,517 195,045 494,590 0 7,274,569 (188,606) (1,491,310) (48,325) 1,948,238 17,472 110,535 7,622,571 (12,827,000) 0 154,000 (531,000) (13,204,000) (10,305,000) 0 987,000 (162,000) (9,480,000) (8,089,000) 0 1,408,000 694,000 (5,987,000) (5,345,000) 0 1,407,000 (676,000) (4,614,000) (8,783,594) 0 68,244 25,062 (8,690,289) (9,137,407) 0 11,288 4,145 (9,121,974) (9,520,658) 0 (45,358) (16,657) (9,582,673) (9,937,164) 0 (102,275) (37,559) (10,076,998) (10,391,079) 0 (160,044) (58,774) (10,609,897) (10,886,952) 0 (219,259) (80,520) (11,186,731) (11,429,809) 0 (280,534) (103,022) (11,813,366) (12,025,237) 0 (344,516) (126,519) (12,496,272) (12,679,476) 0 (411,893) (151,262) (13,242,631) (13,399,527) 0 (483,411) (177,526) (14,060,464) (14,193,278) 0 (559,883) (205,609) (14,958,769) (2,918,000) 192,000 0 0 0 (82,000) (2,175,000) (4,983,000) 4,242,000 (984,000) 0 0 0 (1,267,000) 2,584,000 4,575,000 (6,960,000) (1,277,000) 0 0 0 100,000 10,446,000 2,309,000 (1,559,000) (1,864,000) 0 0 0 (663,000) 7,490,000 3,404,000 (167,276) (420,165) 0 0 0 (14,817,365) 0 (15,404,805) (27,669) (411,508) 0 0 0 3,392,912 0 2,953,735 111,179 (404,295) 0 0 0 3,671,468 0 3,378,352 250,691 (398,446) 0 0 0 3,963,116 0 3,815,361 392,292 (393,896) 0 0 0 4,270,799 0 4,269,195 537,437 (390,594) 0 0 0 4,597,633 0 4,744,477 687,632 (388,501) 0 0 0 4,946,967 0 5,246,099 844,461 (387,587) 0 0 0 5,322,432 0 5,779,306 1,009,614 (387,836) 0 0 0 5,728,007 0 6,349,784 1,184,915 (389,241) 0 0 0 6,168,090 0 6,963,765 1,372,358 (391,803) 0 0 0 6,647,573 0 7,628,128 324,000 6,550,000 6,874,000 728,000 7,781,000 8,509,000 7,349,000 7,281,000 14,630,000 7,969,000 9,135,000 17,104,000 (17,977,583) 8,705,000 (9,272,583) (5,886) 8,669,417 8,663,531 23,650 8,663,531 8,687,181 53,327 8,687,181 8,740,509 83,449 8,740,509 8,823,958 114,325 8,823,958 8,938,283 146,274 8,938,283 9,084,557 179,635 9,084,557 9,264,192 214,767 9,264,192 9,478,959 252,057 9,478,959 9,731,016 291,930 9,731,016 10,022,947 Free Cash Flow to Common Equity Net Income - Increase in Common Equity +/-Clean Surplus Plug (Ignore) =Free Cash Flow to Common Equity 6,462,000 (4,205,000) (2,175,000) 82,000 1,004,000 (2,321,000) 2,584,000 1,267,000 (1,235,000) (9,311,000) 10,446,000 (100,000) (3,246,000) (3,581,000) 7,490,000 663,000 (3,427,945) 18,245,309 0 14,817,365 (3,443,082) 50,169 0 (3,392,912) (3,469,874) (201,594) 0 (3,671,468) (3,508,556) (454,560) 0 (3,963,116) (3,559,482) (711,316) 0 (4,270,799) (3,623,135) (974,498) 0 (4,597,633) (3,700,131) (1,246,836) 0 (4,946,967) (3,791,229) (1,531,203) 0 (5,322,432) (3,897,345) (1,830,662) 0 (5,728,007) (4,019,567) (2,148,523) 0 (6,168,090) (4,159,171) (2,488,401) 0 (6,647,573) Computation based on SCF: +Cash From Operations -Increase in Cash +Cash From Investing +Increase in Debt -Dividends Paid to Minority Interest -Dividends Paid on Preferred +Increase in Preferred Stock +/-Clean Surplus Plug (Ignore) =Free Cash Flow to Common Equity 18,511,000 (324,000) (13,204,000) (2,918,000) 192,000 0 0 (2,175,000) 82,000 5,633,000 (728,000) (9,480,000) 4,242,000 (984,000) 0 0 2,584,000 1,267,000 11,027,000 (7,349,000) (5,987,000) (6,960,000) (1,277,000) 0 0 10,446,000 (100,000) 9,179,000 (7,969,000) (4,614,000) (1,559,000) (1,864,000) 0 0 7,490,000 663,000 6,117,511 17,977,583 (8,690,289) (167,276) (420,165) 0 0 0 14,817,365 6,162,353 5,886 (9,121,974) (27,669) (411,508) 0 0 0 (3,392,912) 6,227,971 (23,650) (9,582,673) 111,179 (404,295) 0 0 0 (3,671,468) 6,314,964 (53,327) (10,076,998) 250,691 (398,446) 0 0 0 (3,963,116) 6,424,151 (83,449) (10,609,897) 392,292 (393,896) 0 0 0 (4,270,799) 6,556,579 (114,325) (11,186,731) 537,437 (390,594) 0 0 0 (4,597,633) 6,713,542 (146,274) (11,813,366) 687,632 (388,501) 0 0 0 (4,946,967) 6,896,602 (179,635) (12,496,272) 844,461 (387,587) 0 0 0 (5,322,432) 7,107,614 (214,767) (13,242,631) 1,009,614 (387,836) 0 0 0 (5,728,007) 7,348,757 (252,057) (14,060,464) 1,184,915 (389,241) 0 0 0 (6,168,090) 7,622,571 (291,930) (14,958,769) 1,372,358 (391,803) 0 0 0 (6,647,573) Financing Flows: +Dividends Paid -Net Issuance of Common Stock = Free Cash Flow to Common Equity 0 82,000 82,000 0 1,267,000 1,267,000 0 (100,000) (100,000) 0 663,000 663,000 0 14,817,365 14,817,365 0 (3,392,912) (3,392,912) 0 (3,671,468) (3,671,468) 0 (3,963,116) (3,963,116) 0 (4,270,799) (4,270,799) 0 (4,597,633) (4,597,633) 0 (4,946,967) (4,946,967) 0 (5,322,432) (5,322,432) 0 (5,728,007) (5,728,007) 0 (6,168,090) (6,168,090) 0 (6,647,573) (6,647,573) 8,199,264 (2,236,000) (2,175,000) 3,788,264 2,056,905 (6,252,000) 2,584,000 (1,611,095) -655,512 (1,810,000) 10,446,000 7,980,488 -4,767,956 (544,000) 7,490,000 2,178,044 -4,888,773 18,425,114 0 13,536,340 -4,897,651 79,910 0 (4,817,741) -4,923,168 (321,100) 0 (5,244,268) -4,965,528 (724,027) 0 (5,689,555) -5,025,107 (1,132,991) 0 (6,158,098) -5,102,460 (1,552,189) 0 (6,654,648) -5,198,325 (1,985,971) 0 (7,184,296) -5,313,638 (2,438,913) 0 (7,752,551) -5,449,550 (2,915,894) 0 (8,365,444) -5,607,440 (3,422,187) 0 (9,029,627) -5,788,945 (3,963,547) 0 (9,752,492) 18,511,000 (1,231,000) (13,204,000) 2,064,000 (1,083,736) (2,175,000) 2,881,264 5,633,000 500,000 (9,480,000) 2,216,000 (1,836,095) 2,584,000 (383,095) 11,027,000 (1,854,000) (5,987,000) 2,348,000 (2,504,512) 10,446,000 13,475,488 9,179,000 430,000 (4,614,000) 2,467,000 (4,374,956) 7,490,000 10,577,044 6,117,511 35,583 (8,690,289) 2,415,938 (4,284,403) 0 (4,405,660) 6,162,353 5,886 (9,121,974) 2,410,172 (4,274,177) 0 (4,817,741) 6,227,971 (23,650) (9,582,673) 2,412,642 (4,278,557) 0 (5,244,268) 6,314,964 (53,327) (10,076,998) 2,423,346 (4,297,540) 0 (5,689,555) 6,424,151 (83,449) (10,609,897) 2,442,365 (4,331,268) 0 (6,158,098) 6,556,579 (114,325) (11,186,731) 2,469,865 (4,380,037) 0 (6,654,648) 6,713,542 (146,274) (11,813,366) 2,506,102 (4,444,299) 0 (7,184,296) 6,896,602 (179,635) (12,496,272) 2,551,420 (4,524,666) 0 (7,752,551) 7,107,614 (214,767) (13,242,631) 2,606,263 (4,621,923) 0 (8,365,444) 7,348,757 (252,057) (14,060,464) 2,671,175 (4,737,038) 0 (9,029,627) 7,622,571 (291,930) (14,958,769) 2,746,817 (4,871,181) 0 (9,752,492) 0 2,064,000 (1,083,736) 0 (192,000) 82,000 2,918,000 0 3,788,264 0 2,216,000 (1,836,095) 0 984,000 1,267,000 (4,242,000) 0 (1,611,095) 0 2,348,000 (2,504,512) 0 1,277,000 (100,000) 6,960,000 0 7,980,488 0 2,467,000 (4,374,956) 0 1,864,000 663,000 1,559,000 0 2,178,044 0 2,415,938 (4,284,403) 0 420,165 14,817,365 167,276 0 13,536,340 0 2,410,172 (4,274,177) 0 411,508 (3,392,912) 27,669 0 (4,817,741) 0 2,412,642 (4,278,557) 0 404,295 (3,671,468) (111,179) 0 (5,244,268) 0 2,423,346 (4,297,540) 0 398,446 (3,963,116) (250,691) 0 (5,689,555) 0 2,442,365 (4,331,268) 0 393,896 (4,270,799) (392,292) 0 (6,158,098) 0 2,469,865 (4,380,037) 0 390,594 (4,597,633) (537,437) 0 (6,654,648) 0 2,506,102 (4,444,299) 0 388,501 (4,946,967) (687,632) 0 (7,184,296) 0 2,551,420 (4,524,666) 0 387,587 (5,322,432) (844,461) 0 (7,752,551) 0 2,606,263 (4,621,923) 0 387,836 (5,728,007) (1,009,614) 0 (8,365,444) 0 2,671,175 (4,737,038) 0 389,241 (6,168,090) (1,184,915) 0 (9,029,627) 0 2,746,817 (4,871,181) 0 391,803 (6,647,573) (1,372,358) 0 (9,752,492) 16,252,000 (9,064,736) (249,000) 6,938,264 8,501,000 1,012,000 0 0 16,451,264 1,795,000 (12,827,000) 0 154,000 (531,000) 14,000 (2,175,000) 2,881,264 14,784,000 (9,941,095) 404,000 5,246,905 8,870,000 (2,786,000) 0 0 11,330,905 (4,583,000) (10,305,000) 0 987,000 (162,000) (235,000) 2,584,000 (383,095) 14,552,000 (10,489,512) 788,000 4,850,488 9,173,000 (4,718,000) 0 0 9,305,488 (107,000) (8,089,000) 0 1,408,000 694,000 (182,000) 10,446,000 13,475,488 11,135,000 (10,932,956) (1,484,000) (1,281,956) 9,454,000 (4,970,000) 0 0 3,202,044 1,289,000 (5,345,000) 0 1,407,000 (676,000) 3,210,000 7,490,000 10,577,044 11,270,902 (11,209,991) (29,926) 30,985 9,233,937 (4,949,684) 0 0 4,315,238 (6,835) (8,783,594) 0 68,244 25,062 (23,774) 0 (4,405,660) 11,279,021 (11,230,348) (4,950) 43,723 9,211,897 (4,946,324) 0 0 4,309,296 (1,130) (9,137,407) 0 11,288 4,145 (3,932) 0 (4,817,741) 11,325,517 (11,288,858) 19,890 56,549 9,221,339 (4,959,827) 0 0 4,318,061 4,543 (9,520,658) 0 (45,358) (16,657) 15,801 0 (5,244,268) 11,410,735 (11,385,990) 44,849 69,594 9,262,250 (4,990,273) 0 0 4,341,571 10,243 (9,937,164) 0 (102,275) (37,559) 35,629 0 (5,689,555) 11,535,416 (11,522,606) 70,182 82,992 9,334,942 (5,037,917) 0 0 4,380,016 16,028 (10,391,079) 0 (160,044) (58,774) 55,754 0 (6,158,098) 11,700,706 (11,699,976) 96,148 96,878 9,440,052 (5,103,189) 0 0 4,433,741 21,959 (10,886,952) 0 (219,259) (80,520) 76,383 0 (6,654,648) 11,908,173 (11,919,795) 123,018 111,396 9,578,552 (5,186,703) 0 0 4,503,246 28,095 (11,429,809) 0 (280,534) (103,022) 97,729 0 (7,184,296) 12,159,835 (12,184,210) 151,075 126,700 9,751,763 (5,289,263) 0 0 4,589,199 34,503 (12,025,237) 0 (344,516) (126,519) 120,018 0 (7,752,551) 12,458,188 (12,495,856) 180,621 142,952 9,961,374 (5,411,881) 0 0 4,692,446 41,251 (12,679,476) 0 (411,893) (151,262) 143,490 0 (8,365,444) 12,806,250 (12,857,900) 211,983 160,332 10,209,476 (5,555,790) 0 0 4,814,019 48,414 (13,399,527) 0 (483,411) (177,526) 168,405 0 (9,029,627) 13,207,610 (13,274,091) 245,517 179,035 10,498,588 (5,722,464) 0 0 4,955,160 56,072 (14,193,278) 0 (559,883) (205,609) 195,045 0 (9,752,492) Free Cash Flow to all Investors Net Operating Income - Increase in Net Operating Assets +/-Clean Surplus Plug (Ignore) =Free Cash Flow to Investors Computation based on SCF: Cash From Operations -Increase in Operating Cash +Cash from Investing +Interest Expense -Tax Shield on Interest +/-Clean Surplus Plug (Ignore) =Free Cash Flow to Investors Financing Flows: +Dividends on Common Stock +Interest Expense -Tax Shield on Interest +Dividends on Preferred Stock +Dividends Paid to Minority Interest -Net Issuance of Common Stock -Net Issuance of Debt -Net Issuance of Preferred Stock =Free Cash Flow to Investors Traditional Computation of FCF: EBIT -Taxes on EBIT +Increase in Deferred Taxes = NOPLAT +Depreciation & Amortization +Non-Operating Income (Loss) +Other Income (Loss) +Ext. Items & Disc. Ops. =Gross Cash Flow -Increase in Working Capital -Capital Expenditures -Increase in Investments -Purchases of Intangibles -Increase in Other Assets +Increase in Other Liabilities +/-Clean Surplus Plug (Ignore) =Free Cash Flow to Investors Credit Analysis Company Name Wal-Mart Stores Inc. Fiscal Year End Date Actual Actual Actual Actual Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 2012/10/31 2013/10/31 2014/10/31 2015/10/31 2016/01/31 2017/01/31 2018/01/31 2019/01/31 2020/01/31 2021/01/31 2022/01/31 2023/01/31 2024/01/31 2025/01/31 2026/01/31 2027/01/31 2028/01/31 Analysis of Leverage - Long-Term Capital Structure Debt to Equity Ratio FFO to Total Debt CFO to Total Debt Analysis of Leverage - Short-Term Liquidity Current Ratio Quick Ratio EBIT Interest Coverage EBITDA Interest Coverage Analysis of Credit Risk Net Income to Total Assets implied default probability Total Liabilities to Total Assets implied default probability Quick Ratio implied default probability EBIT to Interest Expense implied default probability Inventory Holding Period implied default probability Annual Sales Growth implied default probability Average Implied Default Probability Fiscal Year 0.662 0.588 0.332 0.397 0.624 0.226 0.119 0.480 0.202 0.240 0.444 0.200 0.220 0.552 0.151 0.150 0.552 0.151 0.151 0.552 0.152 0.153 0.552 0.153 0.154 0.552 0.153 0.156 0.552 0.154 0.157 0.552 0.154 0.158 0.552 0.155 0.160 0.552 0.156 0.161 0.552 0.156 0.163 0.552 0.157 0.164 0.552 0.157 0.164 0.882 0.200 7.098 10.862 0.835 0.203 7.874 11.993 0.882 0.201 6.671 10.674 0.970 0.244 6.198 10.104 0.932 0.222 4.514 8.346 0.932 0.222 4.665 8.487 0.932 0.222 4.680 8.502 0.932 0.222 4.694 8.516 0.932 0.222 4.709 8.531 0.932 0.222 4.723 8.545 0.932 0.222 4.737 8.559 0.932 0.222 4.752 8.574 0.932 0.222 4.766 8.588 0.932 0.222 4.780 8.602 0.932 0.222 4.794 8.616 0.932 0.222 4.808 8.630 0.932 0.222 4.808 8.630 0.013 4.5% 0.615 4.5% 0.200 9.0% 7.10 1.8% 44.34 4.2% 0.0% 4.2% 4.7% 0.036 3.0% 0.603 4.5% 0.203 9.0% 7.87 1.8% 45.36 4.2% 5.0% 3.0% 4.3% 0.008 4.5% 0.603 4.5% 0.201 9.0% 6.67 1.8% 45.73 4.2% 1.5% 3.2% 4.5% -0.002 5.5% 0.585 4.5% 0.244 9.0% 6.20 1.8% 45.13 4.2% 1.9% 3.2% 4.7% -0.015 5.5% 0.600 4.5% 0.222 9.0% 4.51 2.1% 44.96 4.2% -0.7% 4.2% 4.9% -0.016 5.5% 0.600 4.5% 0.222 9.0% 4.67 2.1% 44.96 4.2% -0.4% 4.2% 4.9% -0.016 5.5% 0.600 4.5% 0.222 9.0% 4.68 2.1% 44.96 4.2% -0.1% 4.2% 4.9% -0.016 5.5% 0.600 4.5% 0.222 9.0% 4.69 2.1% 44.96 4.2% 0.3% 4.2% 4.9% -0.016 5.5% 0.600 4.5% 0.222 9.0% 4.71 2.1% 44.96 4.2% 0.6% 3.2% 4.8% -0.016 5.5% 0.600 4.5% 0.222 9.0% 4.72 2.1% 44.96 4.2% 1.0% 3.2% 4.8% -0.016 5.5% 0.600 4.5% 0.222 9.0% 4.74 2.1% 44.96 4.2% 1.3% 3.2% 4.8% -0.016 5.5% 0.600 4.5% 0.222 9.0% 4.75 2.1% 44.96 4.2% 1.6% 3.2% 4.8% -0.016 5.5% 0.600 4.5% 0.222 9.0% 4.77 2.1% 44.96 4.2% 2.0% 3.2% 4.8% -0.016 5.5% 0.600 4.5% 0.222 9.0% 4.78 2.1% 44.96 4.2% 2.3% 3.2% 4.8% -0.016 5.5% 0.600 4.5% 0.222 9.0% 4.79 2.1% 44.96 4.2% 2.7% 3.2% 4.8% -0.016 5.5% 0.600 4.5% 0.222 9.0% 4.81 2.1% 44.96 4.2% 3.0% 3.2% 4.8% -0.016 5.5% 0.600 4.5% 0.222 9.0% 4.81 2.1% 44.96 4.2% 3.0% 3.2% 4.8% 2012 2013 2014 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Lookup Table of default probabilit decile 1 min decile 2 min decile 3 min decile 4 min decile 5 min decile 6 min decile 7 min decile 8 min decile 9 min decile 10 NI to TA thresholds -0.448 -0.161 -0.049 0.001 0.022 0.038 0.056 0.079 0.118 NI to TA default rates 0.083 0.08 0.072 0.055 0.045 0.030 0.025 0.020 0.020 0.020 TL to TA thresholds 0.175 0.283 0.385 0.476 0.558 0.633 0.709 0.816 1.030 TL to TA default rates 0.02 0.022 0.025 0.030 0.035 0.045 0.055 0.070 0.090 0.100 Quick Ratio thresholds 0.382 0.522 0.809 0.994 1.200 1.470 1.890 2.530 4.550 Quick Ratio default rates 0.09 0.065 0.05 0.042 0.040 0.035 0.025 0.020 0.015 0.010 EBIT to Int thresholds -17.4 -3.6 -0.139 1.25 2.210 3.380 5.210 9.160 23.800 EBIT to Int default rates 0.075 0.09 0.085 0.070 0.050 0.030 0.021 0.018 0.015 0.010 Inv Holding thresholds 0.365 2.56 14.24 31.39 50 70.080 91.980 121.540 174.470 Inv Holding default rates 0.03 0.035 0.039 0.040 0.042 0.045 0.049 0.055 0.060 0.070 Sales Growth thresholds -0.203 -0.063 0.003 0.05 0.098 0.158 0.244 0.398 0.797 Sales Growth default rates 0.069 0.055 0.042 0.032 0.030 0.030 0.032 0.042 0.050 0.065 Forecasting Assumptions Company Name Wal-Mart Stores Inc. Estimated Price/Share=-$16.81 Fiscal Year End Date Actual Actual 2012/10/31 2013/10/31 Implied Return on Equity Income Statement Assumptions Sales Growth Cost of Goods Sold/Sales R&D/Sales SG&A/Sales Dep&Amort/Avge PP&E and Intang. Net Interest Expense/Avge Net Debt Non-Operating Income/Sales Effective Tax Rate Minority Interest/After Tax Income Other Income/Sales Ext. Items & Disc. Ops./Sales Pref. Dividends/Avge Pref. Stock Balance Sheet Assumptions Working Capital Assumptions Ending Operating Cash/Sales Ending Receivables/Sales Ending Inventories/COGS Ending Other Current Assets/Sales Ending Accounts Payable/COGS Ending Taxes Payable/Sales Ending Other Current Liabs/Sales Other Operating Asset Assumptions Ending Net PP&E/Sales Ending Investments/Sales Ending Intangibles/Sales Ending Other Assets/Sales Other Operating Liability Assumptions Other Liabilities/Sales Deferred Taxes/Sales Financing Assumptions Current Debt/Total Assets Long-Term Debt/Total Assets Minority Interest/Total Assets Preferred Stock/Total Assets Dividend Payout Ratio Actual Actual 2014/10/31 2015/10/31 Actual Forecast Forecast 2016/01/31 2017/01/31 2018/01/31 Forecast Forecast 2019/01/31 2020/01/31 Forecast Forecast 2021/01/31 2022/01/31 Forecast Forecast Forecast 2023/01/31 2024/01/31 2025/01/31 TERMINAL YEAR Forecast Forecast 2026/01/31 2027/01/31 0.086 0.013 (0.015) (0.036) (0.041) (0.047) (0.047) (0.047) (0.048) (0.048) (0.048) (0.048) (0.049) (0.049) (0.049) 5.0% 75.6% 0.0% 19.1% 6.4% 4.4% 0.2% 52.5% 10.5% 0.0% 0.0% 0.0% 1.5% 75.7% 0.0% 19.3% 6.6% 4.7% -0.6% 82.9% 40.1% 0.0% 0.0% 0.0% 1.9% 75.7% 0.0% 19.4% 6.9% 5.1% -1.0% 106.7% -147.5% 0.0% 0.0% 0.0% -0.7% 75.4% 0.0% 20.3% 7.3% 5.9% -1.0% 177.3% -13.5% 0.0% 0.0% 0.0% -0.4% 75.4% 0.0% 20.3% 7.3% 5.9% -1.0% 177.3% -13.5% 0.0% 0.0% 0.0% -0.1% 75.4% 0.0% 20.3% 7.3% 5.9% -1.0% 177.3% -13.5% 0.0% 0.0% 0.0% 0.3% 75.4% 0.0% 20.3% 7.3% 5.9% -1.0% 177.3% -13.5% 0.0% 0.0% 0.0% 0.6% 75.4% 0.0% 20.3% 7.3% 5.9% -1.0% 177.3% -13.5% 0.0% 0.0% 0.0% 1.0% 75.4% 0.0% 20.3% 7.3% 5.9% -1.0% 177.3% -13.5% 0.0% 0.0% 0.0% 1.3% 75.4% 0.0% 20.3% 7.3% 5.9% -1.0% 177.3% -13.5% 0.0% 0.0% 0.0% 1.6% 75.4% 0.0% 20.3% 7.3% 5.9% -1.0% 177.3% -13.5% 0.0% 0.0% 0.0% 2.0% 75.4% 0.0% 20.3% 7.3% 5.9% -1.0% 177.3% -13.5% 0.0% 0.0% 0.0% 2.3% 75.4% 0.0% 20.3% 7.3% 5.9% -1.0% 177.3% -13.5% 0.0% 0.0% 0.0% 2.7% 75.4% 0.0% 20.3% 7.3% 5.9% -1.0% 177.3% -13.5% 0.0% 0.0% 0.0% 3.0% 75.4% 0.0% 20.3% 7.3% 5.9% -1.0% 177.3% -13.5% 0.0% 0.0% 0.0% 1.5% 1.3% 12.1% 0.4% 16.3% 0.3% 0.5% 1.7% 1.5% 12.4% 0.3% 16.1% 0.5% 1.3% 1.5% 1.4% 12.5% 0.5% 15.7% 0.2% 1.0% 1.9% 1.4% 12.4% 0.5% 15.8% 0.2% 1.1% 1.8% 1.2% 12.3% 0.3% 16.1% 0.1% 0.7% 1.8% 1.2% 12.3% 0.3% 16.1% 0.1% 0.7% 1.8% 1.2% 12.3% 0.3% 16.1% 0.1% 0.7% 1.8% 1.2% 12.3% 0.3% 16.1% 0.1% 0.7% 1.8% 1.2% 12.3% 0.3% 16.1% 0.1% 0.7% 1.8% 1.2% 12.3% 0.3% 16.1% 0.1% 0.7% 1.8% 1.2% 12.3% 0.3% 16.1% 0.1% 0.7% 1.8% 1.2% 12.3% 0.3% 16.1% 0.1% 0.7% 1.8% 1.2% 12.3% 0.3% 16.1% 0.1% 0.7% 1.8% 1.2% 12.3% 0.3% 16.1% 0.1% 0.7% 1.8% 1.2% 12.3% 0.3% 16.1% 0.1% 0.7% 1.8% 1.2% 12.3% 0.3% 16.1% 0.1% 0.7% 24.7% 0.0% 4.7% 1.2% 24.4% 0.0% 4.4% 1.3% 24.4% 0.0% 4.1% 1.3% 23.7% 0.0% 3.8% 1.1% 23.0% 0.0% 3.5% 1.3% 23.0% 0.0% 3.5% 1.3% 23.0% 0.0% 3.5% 1.3% 23.0% 0.0% 3.5% 1.3% 23.0% 0.0% 3.5% 1.3% 23.0% 0.0% 3.5% 1.3% 23.0% 0.0% 3.5% 1.3% 23.0% 0.0% 3.5% 1.3% 23.0% 0.0% 3.5% 1.3% 23.0% 0.0% 3.5% 1.3% 23.0% 0.0% 3.5% 1.3% 23.0% 0.0% 3.5% 1.3% 0.7% 1.8% 0.6% 1.6% 0.6% 1.7% 0.5% 1.8% 1.2% 1.5% 1.2% 1.5% 1.2% 1.5% 1.2% 1.5% 1.2% 1.5% 1.2% 1.5% 1.2% 1.5% 1.2% 1.5% 1.2% 1.5% 1.2% 1.5% 1.2% 1.5% 1.2% 1.5% 2.1% 23.1% 2.3% 0.0% 0.0% 3.4% 19.2% 2.7% 0.0% 0.0% 3.8% 20.7% 2.5% 0.0% 0.0% 0.8% 20.3% 2.3% 0.0% 0.0% 1.4% 19.8% 1.6% 0.0% 0.0% 1.4% 19.8% 1.6% 0.0% 0.0% 1.4% 19.8% 1.6% 0.0% 0.0% 1.4% 19.8% 1.6% 0.0% 0.0% 1.4% 19.8% 1.6% 0.0% 0.0% 1.4% 19.8% 1.6% 0.0% 0.0% 1.4% 19.8% 1.6% 0.0% 0.0% 1.4% 19.8% 1.6% 0.0% 0.0% 1.4% 19.8% 1.6% 0.0% 0.0% 1.4% 19.8% 1.6% 0.0% 0.0% 1.4% 19.8% 1.6% 0.0% 0.0% 1.4% 19.8% 1.6% 0.0% 0.0% 75.5% 0.0% 19.2% -0.6% 76.5% 28.1% 0.0% 0.0% Valuation Parameters Estimated Price/Share=-$16.81 Company Name: Wal-Mart Stores Inc. Required Valuation Parameters (to compute value of common equity): Enter Cost of Equity Capital: Enter Value of Contingent Claims on Common Equity ($000): Enter Date of Valuation: Enter Dilution Factor for Splits Occurring Since Latest Fiscal Year End: Optional Valuation Parameters (to compute value to all investors): Enter Cost of Net Debt: Enter Cost of Preferred Stock: Enter Cost of Minority Interest: Adjust the Weighted Average Cost of Capital Input such that the two equity values below are approximately equal: 10.00% 0 2017/02/15 1.00 8.00% 9.00% 10.00% 9.3720% down Residual Income Valuation ($000) Company Name Most Recent Fiscal Year End Date of Valuation Cost of Common Equity Teriminal Growth Rate Wal-Mart Stores Inc. 1/31/2016 2/15/2017 10.00% 3.00% Fiscal Year of Forecast Valuation to Common Equity Net Income Common Equity at Beginning of Year Residual Income Present Value of Residual Income Present Value Beyond 10 Years Present Value of First 10 Years Common Equity as of 1/31/2016 Forecast Equity Value Before Time Adj. Forecasted Value as of Valuation Date Less Value of Contingent Equity Claims Value Attributable to Common Equity Common Shares Outstanding at BS Date Equivalent Shares at Valuation Date Forecast Price/Share Valuation to All Investors Cost of Debt Cost of Preferred Stock Cost of Minority Interest After Tax Weighted Average Cost of Capital Net Interest Expense to Net Debtholders Beginning Book Value of Debt Residual Interest Expense Present Value of Residual Interest Income Value of Debt Dividends to Preferred Stockholders Beginning Book Value of Preferred Stock Residual Income to Preferred Stock Present Value of Preferred Residual Income Value of Preferred Stock Minority Interest in Earnings Beginning Book Value of Minority Interest Residual Income to Minority Interest Present Value of MI Residual Income Value of Minority Interest Net Operating Income Beginning Net Operating Assets Residual Income to all Investors Present Value of Residual Investor Income Entity Value Less Value of Debt Less Value of Preferred Stock Less Value of Minority Interest Forecast Equity Value Before Time Adj. Forecasted Value as of Valuation Date Less Value of Contingent Equity Claims Value Attributable to Common Equity Common Shares Outstanding at BS Date Equivalent Shares at Valuation Date Forecast Price/Share 2017/01/31 2018/01/31 (3,427,945) 92,143,000 (12,642,245) (11,492,950) (68,592,791) (70,038,373) 2019/01/31 2020/01/31 2021/01/31 2022/01/31 2023/01/31 2024/01/31 2025/01/31 2026/01/31 2027/01/31 2028/01/31 (3,443,082) 73,897,691 (10,832,851) (8,952,769) (3,469,874) 73,847,521 (10,854,626) (8,155,241) (3,508,556) 74,049,115 (10,913,467) (7,454,045) (3,559,482) 74,503,675 (11,009,850) (6,836,251) (3,623,135) 75,214,991 (11,144,635) (6,290,856) (3,700,131) 76,189,489 (11,319,080) (5,808,478) (3,791,229) 77,436,325 (11,534,861) (5,381,098) (3,897,345) 78,967,527 (11,794,098) (5,001,849) (4,019,567) 80,798,189 (12,099,386) (4,664,837) (4,159,171) 82,946,713 (12,453,842) (4,364,996) (4,283,946) 85,435,114 (12,827,458) (4,087,223) 2,415,938 40,922,000 (857,822) (794,280) 26,722,097 2,410,172 40,754,724 (850,206) (728,915) 2,412,642 40,727,056 (845,523) (671,203) 2,423,346 40,838,235 (843,713) (620,154) 2,442,365 41,088,926 (844,749) (574,922) 2,469,865 41,481,218 (848,632) (534,782) 2,506,102 42,018,656 (855,390) (499,112) 2,551,420 42,706,288 (865,083) (467,377) 2,606,263 43,550,749 (877,797) (439,117) 2,671,175 44,560,363 (893,654) (413,93