{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-10T01:51:50-04:00", "answer_date": "2024-06-10 01:51:50", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "2553415", "url": "\/study-help\/questions\/income-statements-for-walmart-inc-and-costco-wholesale-corporation-for-2553415", "question_creation_date_js": "2024-06-10T01:51:50-04:00", "question_creation_date": "Jun 10, 2024 01:51 AM", "meta_title": "[Solved] Income statements for Walmart Inc. and Co | SolutionInn", "meta_description": "Answer of - Income statements for Walmart Inc. and Costco Wholesale Corporation for the fiscal year 2022 are as follows: ($ millio | SolutionInn", "meta_keywords": "income,statements,walmart,inc,costco,wholesale,corporation,fiscal,year,2022,$,millions", "question_title_h1": "Income statements for Walmart Inc. and Costco Wholesale Corporation for the fiscal year 2022 are as follows: ($ millions) Walmart Inc. Costco Wholesale Corporation Net", "question_title": "Income statements for Walmart Inc. and Costco Wholesale Corporation for the fiscal", "question_title_for_js_snippet": "Income statements for Walmart Inc and Costco Wholesale Corporation for the fiscal year 2022 are as follows ($ millions) Walmart Inc Costco Wholesale Corporation Net sales $572,754 $195,929 Cost of sales 433,891 169,456 Gross profit 138,863 26,473 Operating expenses Selling, general, and administrative (SG A) 105,360 19,678 Depreciation and amortization 8,004 2,105 Operating income 25,499 4,690 Interest and other (income) expense 1,895 479 Interest and investment income (407) (165) Earnings before provision for income taxes 24,011 4,376 Provision for income taxes 6,020 1,094 Net earnings $17,991 $3,282 Required Compute the return on equity (ROE), return on assets (ROA), and return on financial leverage (ROFL) for each company in fiscal year 2022 Assume a tax rate of 25 Disaggregate the ROA into profit margin (PM) and asset turnover (AT) components Identify which factor drives the ROA for each company Assess the trend in SG A expenses over the past five years What does it indicate about each companys operational efficiency Evaluate the debt to equity ratio for Walmart Inc and Costco Wholesale Corporation What does it suggest about their financial leverage Compare the net profit margins of Walmart Inc and Costco Wholesale Corporation What insights can be drawn about their profitability ", "question_description": "Income statements for Walmart Inc. and Costco Wholesale Corporation for the fiscal year 2022 are as follows:

($ millions)<\/strong><\/p><\/td>

Walmart Inc.<\/strong><\/p><\/td>

Costco Wholesale Corporation<\/strong><\/p><\/td><\/tr><\/thead>

Net sales<\/p><\/td>

$572,754<\/p><\/td>

$195,929<\/p><\/td><\/tr>

Cost of sales<\/p><\/td>

433,891<\/p><\/td>

169,456<\/p><\/td><\/tr>

Gross profit<\/p><\/td>

138,863<\/p><\/td>

26,473<\/p><\/td><\/tr>

Operating expenses:<\/p><\/td>


<\/td>
<\/td><\/tr>

Selling, general, and administrative (SG&A)<\/p><\/td>

105,360<\/p><\/td>

19,678<\/p><\/td><\/tr>

Depreciation and amortization<\/p><\/td>

8,004<\/p><\/td>

2,105<\/p><\/td><\/tr>

Operating income<\/p><\/td>

25,499<\/p><\/td>

4,690<\/p><\/td><\/tr>

Interest and other (income) expense<\/p><\/td>

1,895<\/p><\/td>

479<\/p><\/td><\/tr>

Interest and investment income<\/p><\/td>

(407)<\/p><\/td>

(165)<\/p><\/td><\/tr>

Earnings before provision for income taxes<\/p><\/td>

24,011<\/p><\/td>

4,376<\/p><\/td><\/tr>

Provision for income taxes<\/p><\/td>

6,020<\/p><\/td>

1,094<\/p><\/td><\/tr>

Net earnings<\/p><\/td>

$17,991<\/p><\/td>

$3,282<\/p><\/td><\/tr><\/tbody><\/table>

Required:<\/strong><\/p>

  1. Compute the return on equity (ROE), return on assets (ROA), and return on financial leverage (ROFL) for each company in fiscal year 2022. Assume a tax rate of 25%.<\/li>
  2. Disaggregate the ROA into profit margin (PM) and asset turnover (AT) components. Identify which factor drives the ROA for each company.<\/li>
  3. Assess the trend in SG&A expenses over the past five years. What does it indicate about each company\u2019s operational efficiency?<\/li>
  4. Evaluate the debt-to-equity ratio for Walmart Inc. and Costco Wholesale Corporation. What does it suggest about their financial leverage?<\/li>
  5. Compare the net profit margins of Walmart Inc. and Costco Wholesale Corporation. What insights can be drawn about their profitability?<\/li><\/ol>

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