Problem 3: (10 points)

Refer to the consolidated income statement, balance sheet, and statement of cash flows of Wal-Mart in Appendix.

Required:

1.Compute Wal-Mart's current ratio and quick ratio for 2016 and 2017.Comment on any observed trends.

2.Compute total liabilities-to-equity ratios and total debt-to-equity ratios for 2016 and 2017.Comment on any trends you observe.

3.Compute time interest earned ratio, cash from operations to total debt ratio, and free operating cash flow to total debt ratios for 2016 and 2017.Comment on any trends you observe.

4.What is your overall assessment of the company's credit risk?Explain.

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