2013 2014 2015 Formula Current Ratio Quick Ratio Operating Cash Flow to Average Current Liabilities Days Accounts Receivable 1 Low ST liquidity risk high Low ST liquidity risk 0.4 Low ST liquidity risk Current Assets/ Current Liabilities (Cash+ShortTermInvestments+AccountsReceivable Current Liabilities Operating Cash Flow/0.5(Current Liabilities-2Year) 365/Accounts Receivable Turnover Ratio Accounts Receivable Turnover-Sales 0.5(Accounts Receivable-2Year) 565 Inventory lurnover Ratio Inventory Turnover Ratio Costs of Goods Sold'0.5(Inventory-2Year) 365/Accounts Payable Tumover Ratio Accounts Payable Turnover-Purchase 0.5(Accounts Payable-2Year) Purchase-Cost of Goods Sold+Ending Inventory-Beginning Inventory Days Accounts Receivable +Days Inventory - Days Accounts Payable Total Liability Total Assets Total Liability Shareholders'Equity Long-Tem Debt (Long-Tem Debt+Shareholders' Equity) Long-Term Debt Shareholders' Equity Operating Cash Flow Interest Interest (Statement of Cash Flow) Operating Cash Flow/0.5(Total Liabilities-2Year) Days Inventory Days Accounts Payable Net Days Working Capital Liabilities to Assets Ratio Liabilities to Shareholders' Equity Ratio Long-Term Debt to Long-Tem Capital Ratio Long-Term Debt to Shareholders' Equity Ratio nterest coverage ratio Operating Cash Flow to Average Total Liabilities LT solvency risk 0.2 Low LT solvency risk Altman's Z Score Working Capital Assets: 1.2x Retained Earnings/Assets: 1.4 x EBIT/Assets: 3.3 x Mkt. Value Equity Liablities: 0.6 x Sales, Assets: 1.0 Z-Score Probability of B [Working CapitalCurrent Assets- Current Liablity)Assets Retained Earnings/Assets EBIT-Earnings before Income Taxes+Interest]Assets Mkt. Value Equity-shares outstanding x price Sales(t TA(t) 0.000 84-134% After calculation, analyze the changes in (1) short-term solvency risk, (2) long-term solvency risk and (3) bankruptcy risk Note 1. Please read the context of question a. when calculate the days account receivable outstanding. The point is to use the only specialty revenues in your calculations! The formula here is the generaal one 2. For number of shares outstanding and price in 2012, please also read the context of question a. Required a. Compute the values of each of the ratios in Exhibit 5.26 for Walmart for 2015. Walmart had 3,162 million common shares outstanding at the end of fiscal 2015, and the market price per share was $66.36. For 2014, the comparable shares and price per share were 3,228 million and $84.98, and for 2013, they were 3,233 million and $74.68, respectively. For days accounts receivable outstanding, use total revenues in your calculations. b. Interpret the changes in Walmart's risk ratios during the three-year period, indicating any areas of concern. Exhibit 1.19 Wal-Mart Stores, Inc. Balance Sheets as of January 31 (amounts in millions; allow for rounding) (Integrative Case 1.1) 2014 2015 2016 Assets: Cash and cash equivalents Accounts and notes receivable--net Inventories Prepaid expenses and other current assets Current assets of discontinued segments 9,135 6,778 45,141 2,224 $8,705 5,624 44,469 1441 6,677 44,858 1,909 460 61,185 178,678 (60,771) 19,510 Current Assets Property, plant, and equipment-at cost Accumulated depreciation Goodwil Other assets 63,278 182,634 (65,979) 18,102 60,239 188,054 (71,538) 16,695 203,490 Total Assets Liabilities and Equities: Accounts payable Current accrued expenses Notes payable and short-term debt Current maturities of long-term debt Income taxes payable Current liabilities of discontinued operations 204,751 199,581 37415 18,793 7,670 38,410 19,152 1,592 5,078 1,021 19,607 2,708 3,296 966 89 69,345 44,559 8,017 1491 $123,412 2,685 76,566 (2,996) 76,255 5,084 81,339 $204,751 Current Liabilities Long-term debt obligations Deferred tax liabilities-noncurrent Redeemable noncontrolling interest 65,253 43,495 8,805 64,619 44,030 7,321 $117,553 2,785 85,777 7.168) 81,394 Total Liabilities 115,970 Common stock + Additional paid-in capital Retained earnings Accum. other comprehensive income (loss) 90,021 80,546 3,065 83,611 $199,581 Total Common Shareholders' Equity Noncontrolling interests Total Equity Total Liabilities and Equities 85,937 $203,490 Source: Wal-Mart Stores, Inc. Forms 10-K for the three fiscal years ended January 31, 2014, 2015, and 2016. Exhibit 1.20 Wal-Mart Stores, Inc. Income Statements for the Fiscal Years Ended January 31 (amounts in millions; allow for rounding) (Integrative Case 2014 2015 2016 $476,294 358,069 $118,225 91,353 $ 26,872 119 (2,335) 24,656 8,105 144 16,695 673) 16,022 (2,409) 13,613 $485,651 365,086 $120,565 93,418 27,147 113 (2,461) 24,799 7,985 285 17,099 (736) 16,363 (4,172) $12,191 $482,130 360,984 $121,146 97,041 24,105 Revenues Cost of goods sold Gross Profit Selling, general, and administrative expenses Operating Profit Interest income Interest expense 81 (2,548) 21,638 6,558 Income before Tax Income tax expense Income (Loss) from discontinued operations Net income attributable to noncontrolling interest:s Other comprehensive income items Net Income 15,080 (386) 14,694 (4,429) 10,265 Net Income Attributable to Common Shareholders Comprehensive Income Source: Wal-Mart Stores, Inc. Forms 10-K for the three fiscal years ended January 31, 2014, 2015, and 2016. Exhibit 1.21 Wal-Mart Stores, Inc. Statements of Cash Flows for the Three Fiscal Years Ended January 31 (amounts in millions; allow for rounding) (Integrative Case 1.1) 2014 2015 2016 Net Income Add back depreciation and amortization expenses Deferred income taxes (Increase) Decrease in accounts receivable (Increase) Decrease in inventories Increase (Decrease) in accounts payable Increase (Decrease) in income taxes payable Increase (Decrease) in other current liabilities (Income) Loss from discontinued segments Other operating cash flows 16,695 8,870 (279) (566) 1,667) 531 (1,224) 103 (144) 938 23,257 727 (13,115) 17,099 9,173 15,080 9454 (569) (1,229) 2,678 166 1,249 2,008 1,303 Net Cash Flow from Operating Activities Proceeds from sales of property, plant, and equipment Property, plant, and equipment acquirec Investments acquired Other investment transactions 785 28,564 570 (12,174) 27,389 635 (11,477) (138) (12,526) 911 2,104 (6,683) (6,139) (982) $(10,789) (442) $ (500) $7,781 479 $(11,125) (6,288) 1,270 (1,015) (6,185) (2853) (15,071) 167 (10,675) 1,235 (4,393) (4,112) (6,294) (2,558) (16,122) (1,022) $(430) $9,135 $ 8,705 Net Cash Flow from Investing Activities Increase (Decrease) in short-term borrowing Increase (Decrease) in long-term borrowing Share repurchases-treasury stock end payments Other financing activities Net Cash Flow from Financing Activities Effects of exchange rate changes on cash Net Change in Cash Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year $1,854 $7,281 $ 9,135 7,281 Source: Wal-Mart Stores, Inc. Forms 10-K for the three fiscal years ended January 31, 2014, 2015, and 2016. 2015 2014 2013 Current ratio Quick ratio Operating cash flow to current liabilities ratio Days accounts receivable outstanding Days inventory held Days accounts payable outstanding Net days of working capital financing needed Liabilities to assets ratio Liabilities to shareholders' equity ratio Long-term debt to long-term capital ratio Long-term debt to shareholders' equity ratio Interest coverage ratio Operating cash flow to total liabilities ratio Altman's Z-score Probability of bankruptcy 0.97 0.24 0.42 5.06 44.99 37.87 12.17 0.58 1.44 0.33 0.50 11.68 0.24 4.81 0.88 0.20 0.33 5.15 45.19 38.37 11.98 0.60 1.62 0.35 0.55 12.19 0.19 4.41 0.00% 0.00%