Comparing Cash Flows Across Retailers

Following are selected accounts from the income statement and the statement of cash ows for several retailers, for their scal years ended in 2016.

$ millions: Sales Net Income Operating Investing Financing

Macys . . . . . . . . . . . . . . . . . . . . . . $ 27,079 $ 1,072 $ 1,984 $ (1,092) $ (2,029)

Home Depot Inc.. . . . . . . . . . . . . . 88,519 7,009 9,373 (2,982) (5,898)

Staples Inc. . . . . . . . . . . . . . . . . . . 21,059 379 978 (374) (406)

Target Corp. . . . . . . . . . . . . . . . . . 73,785 3,363 5,844 508 (4,516)

Walmart Stores . . . . . . . . . . . . . . . 478,614 14,694 27,389 (10,675) (17,144)

A. Compute the ratio of net income to sales for each company. Rank the companies on the basis of this ratio. Do their respective business models give insight into these differences?

B. Compute net cash flows from operating activities as a percentage of sales. Rank the companies on the basis of this ratio. Does this ranking coincide with the ratio rankings from part a? Suggest one or more reasons for any differences observed.

C. Compute net cash flows from investing activities as a percentage of sales. Rank the companies on the basis of this ratio. Does this ranking coincide with the ratio rankings from part a? Suggest one or more reasons for any differences observed.