P1-41. Computing Return on Equity and Return on Assets

The following table contains financial statement information for Walmart Inc

$ millions Total Assets Net Income Sales Equity

2018 $219,295 $6,670 $510,329 $72,496

2017 204,522 9,862 495,761 77,869

2016 198,825 13,643 481,317 77,798

Required

a.Compute return on equity (ROE) for the two recent years

b.Compute return on assets (ROA) for the two recent years

c.Compute profit margin (PM) for the two recent years

d.Compute asset turnover (AT) for the two recent years

e.Which of the following best explains the change in ROA during 2018?

The company's profitability weakened considerably

The company's asset productivity weakened considerably

The company had higher sales in 2018

The company had higher assets in 2018