for this assignment: please help me calculate the ratios in the first column of the outline chart. including in the calculation the numbers necessary to complete each factor in the formula and do the necessary calculation. dont complete observations space.

1. Five Common Areas of Analysis: A thorough financial ratio analysis will, at a minimum, include the following areas: A. Firm liquidity \{short term solvency\} B. Financial leverage g solvency (Long term solvency) C. Firm profitability D. Firm Asset Management E. Market value Measure General principles for financial analysis. 1. Consider three elements a. Viewpoint-what role am I analyzing for? b. Objective of the analysis - how does the information relate to my viewpoint? c. Potential standards of comparison- How do 1 determine if the specitis ratio is good or bad? b. Objective of the analysis - how does the information relate to my viewpoint? c. Potential standards of comparison - How do I determine if the specific ratio is good or bad? 2. Most ratios do not have an ideal number, as acceptable ratios will differ based on the viewpoint of the analyst and the standards of comparison. Acceptable ratios will differ in different industries. 3. Ratios are most useful as an indication of trend or to compare to a relevant company or industry benchmark and when used as part of analysis considering several ratios. A. Firm Liquidity Ratios (short term solvency): How liquid is the firm? Can it pay its approaching debt B. Leverage Ratios (Long Term Solvency): How is the firm financing its assets? Equity Multiplier =TotalEquityTotalAssets OR 1+ Debt to Equity Ratio Observations: C. Firm Asset Management (Efficiency): Use of assets to generate cash, Observations: D. Firm Profitability : Are the firm's managers generating adequate operating profits on the company's assets? Gross Profit Margin =SalesGrossProfit(BalesCostofSaies) E. Market Value Measures Price to Earnings Ratio =EarningspersharePricepershare 11. Internal and Sustainable Growth Due to some complexities in the equity structure of WalMart and Dollar General. we will use some simplified numbers from the thypothetical financial statements of 585 Air. Inc. for this section. The internal and sustainable growth formulas tell a firm how much it should expect ta grow revenue under two different assumptions. Dividend Payout Ratio = Cash Dividend/Net Income Retention Ratio = Addition to retained earnings/Net Income: (Plowback ratio) Internal Growth Rate =1(R0ARetentionRatio)R0ARetentionRatio= ROA=1,746,690/20,399,148=.086 Sustainable Growth Rate =1(RoERetentionRatio)RoERetentienRatio ROE=1,746,690/12,485,202=14% For the Sustainable Growth Rate, the firm assumes a constant debt/equity ratio. So SGR will grow because, as the firm grows earnings and retainsthem as equity, it must incur new debt to keep its debt/equity ratio the same. The new debt grows its revenue -generating assets. Internal Growth rate, assumes internal financing only, so debt will decline over time and assets are only Increased by net income. III. ROE-A Second Look: The DuPont Model: Brings ratio analysis together into a graphic representation Traditional ROE =totalcommonequitynetincome In terms of assets (multiply above by assets/assets), ROE = ROA x Equity Multiplier If we then look at it in terms of sales (multiply by sales/sales) Therefore, ROE = PM TATO Equity Multiplier DuPont ROE =salesnetincometotalassetssalestotalequitytotalassets The DuPont model enables us to break down ROE in to components. We can then identify the drivers of ROE, and thus [theoretically] improve the measure. ROE is a function of: 1. Profit margin. An increase in profit margin will increase the firm's ability to generate funds internally and thereby increase its sustainable growth. (Operating Efficiency) 2. Total asset turnover. An increase in the firm's total asset turnover increases the sales generated for each dollar in assets. This decreases the firm's need for new assets as sales grow and thereby increases the sustainable growth rate. (Asset Use Efficiency) 3. Equity Multiplier (Financial Leverage) a. Financial policy. An increase in the debt-equity ratio increases the firm's financial leverage. Because this makes additional debt financing available, it increases the sustainable growth rate. b. Dividend policy. A decrease in the percentage of net income paid out as dividends will increase the retention ratio. This increases internally generated equity and thus increases internal and sustainable growth. Walmart Inc. Cossolidated Statcments of Ineome Walmart Inc. Consolidated Balance Sheets Directions Use the financial statements for Walmart to calculate the ratios described in Part I A-D of your Ch. 3 Outline. Caculate your ratios in the first column of the outline chart. Include in your calculation the numbers necessary to complete each factor in the formula and do the necessary calculation. You do not need to somplete the observations space. You will upload a Word document or pdf of the completed pages in Canvas by the due date (before the first class on Ch. 3). If submitting a pdf, please scan the document into one pdf, using Adobe Scan or a similar app. (Please do not submit jpeg files.) Your submission will be gaded for completeness, not accuracy It is worth up to 25 points. Ch 03 Qutline student 5 r2023, docx Walmart 2022 financials.pdf 1. Five Common Areas of Analysis: A thorough financial ratio analysis will, at a minimum, include the following areas: A. Firm liquidity \{short term solvency\} B. Financial leverage g solvency (Long term solvency) C. Firm profitability D. Firm Asset Management E. Market value Measure General principles for financial analysis. 1. Consider three elements a. Viewpoint-what role am I analyzing for? b. Objective of the analysis - how does the information relate to my viewpoint? c. Potential standards of comparison- How do 1 determine if the specitis ratio is good or bad? b. Objective of the analysis - how does the information relate to my viewpoint? c. Potential standards of comparison - How do I determine if the specific ratio is good or bad? 2. Most ratios do not have an ideal number, as acceptable ratios will differ based on the viewpoint of the analyst and the standards of comparison. Acceptable ratios will differ in different industries. 3. Ratios are most useful as an indication of trend or to compare to a relevant company or industry benchmark and when used as part of analysis considering several ratios. A. Firm Liquidity Ratios (short term solvency): How liquid is the firm? Can it pay its approaching debt B. Leverage Ratios (Long Term Solvency): How is the firm financing its assets? Equity Multiplier =TotalEquityTotalAssets OR 1+ Debt to Equity Ratio Observations: C. Firm Asset Management (Efficiency): Use of assets to generate cash, Observations: D. Firm Profitability : Are the firm's managers generating adequate operating profits on the company's assets? Gross Profit Margin =SalesGrossProfit(BalesCostofSaies) E. Market Value Measures Price to Earnings Ratio =EarningspersharePricepershare 11. Internal and Sustainable Growth Due to some complexities in the equity structure of WalMart and Dollar General. we will use some simplified numbers from the thypothetical financial statements of 585 Air. Inc. for this section. The internal and sustainable growth formulas tell a firm how much it should expect ta grow revenue under two different assumptions. Dividend Payout Ratio = Cash Dividend/Net Income Retention Ratio = Addition to retained earnings/Net Income: (Plowback ratio) Internal Growth Rate =1(R0ARetentionRatio)R0ARetentionRatio= ROA=1,746,690/20,399,148=.086 Sustainable Growth Rate =1(RoERetentionRatio)RoERetentienRatio ROE=1,746,690/12,485,202=14% For the Sustainable Growth Rate, the firm assumes a constant debt/equity ratio. So SGR will grow because, as the firm grows earnings and retainsthem as equity, it must incur new debt to keep its debt/equity ratio the same. The new debt grows its revenue -generating assets. Internal Growth rate, assumes internal financing only, so debt will decline over time and assets are only Increased by net income. III. ROE-A Second Look: The DuPont Model: Brings ratio analysis together into a graphic representation Traditional ROE =totalcommonequitynetincome In terms of assets (multiply above by assets/assets), ROE = ROA x Equity Multiplier If we then look at it in terms of sales (multiply by sales/sales) Therefore, ROE = PM TATO Equity Multiplier DuPont ROE =salesnetincometotalassetssalestotalequitytotalassets The DuPont model enables us to break down ROE in to components. We can then identify the drivers of ROE, and thus [theoretically] improve the measure. ROE is a function of: 1. Profit margin. An increase in profit margin will increase the firm's ability to generate funds internally and thereby increase its sustainable growth. (Operating Efficiency) 2. Total asset turnover. An increase in the firm's total asset turnover increases the sales generated for each dollar in assets. This decreases the firm's need for new assets as sales grow and thereby increases the sustainable growth rate. (Asset Use Efficiency) 3. Equity Multiplier (Financial Leverage) a. Financial policy. An increase in the debt-equity ratio increases the firm's financial leverage. Because this makes additional debt financing available, it increases the sustainable growth rate. b. Dividend policy. A decrease in the percentage of net income paid out as dividends will increase the retention ratio. This increases internally generated equity and thus increases internal and sustainable growth. Walmart Inc. Cossolidated Statcments of Ineome Walmart Inc. Consolidated Balance Sheets Directions Use the financial statements for Walmart to calculate the ratios described in Part I A-D of your Ch. 3 Outline. Caculate your ratios in the first column of the outline chart. Include in your calculation the numbers necessary to complete each factor in the formula and do the necessary calculation. You do not need to somplete the observations space. You will upload a Word document or pdf of the completed pages in Canvas by the due date (before the first class on Ch. 3). If submitting a pdf, please scan the document into one pdf, using Adobe Scan or a similar app. (Please do not submit jpeg files.) Your submission will be gaded for completeness, not accuracy It is worth up to 25 points. Ch 03 Qutline student 5 r2023, docx Walmart 2022 financials.pdf