The financial statements of Amazon.com, Inc. are presented in Appendix D. Click here to view Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. Click here to view Appendix E. (a) Based on the information contained in these financial statements (For Amazon use values for December 31, 2016 and for Wal-Mart use values for January 31, 2017.), determine the following values for each company. (Round all percentages to 1 decimal place, e.g. 17.5%.) (1) Profit margin for 2016. (For Amazon, use "Total net sales.") (Show decrease with either a negative sign, e.g.-15.2% or in parentheses, e.g. (15.2)%.) Profit margin Amazon.com % Wal-Mart Stores (2) Gross profit for 2016. (Enter amounts in millions.) Amazon.com Gross profit $ Wal-Mart Stores $ (3) Gross profit rate for 2016. % Gross profit rate Amazon.com % Wal-Mart Stores % (4) Operating income for 2016. (Enter amounts in millions.) Amazon.com Wal-Mart Stores Operating income (000's) $ $ (5) Percentage change in operating income from 2015 to 2016. (Show decrease with either a negative sign, e.g.-15.2% or in parentheses, e.g. (15.2)%.) Amazon.com Percent change in operating income % Wal-Mart Stores % AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD OPERATING ACTIVITIES: Net income (loss) Adjustments to reconcile net income (loss) to net cash from operating activities: Year Ended December 31, 2014 2015 2016 S 8,658 $ 14,557 S 15,890 (241) 596 2.371 Depreciation of property and equipment, including internal-use software and website development, and other amortization, including capitalized content costs 4,746 6,281 8,116 Stock-based compensation 1,497 2,119 2,975 Other operating expense, net 129 155 160 Other expense (income), net 59 250 (20) Deferred income taxes (316) 81 (246) Excess tax benefits from stock-based compensation (6) (119) (829) Changes in operating assets and liabilities: Inventories Accounts receivable, net and other Accounts payable Accrued expenses and other (1,193) (2,187) (1,426) (1,039) (1,755) (3,367) 1,759 4,294 5,030 706 913 1,724 Additions to unearned revenue Amortization of previously unearned revenue Net cash provided by (used in) operating activities INVESTING ACTIVITIES: 4,433 7,401 11,931 (3,692) (6,109) (9,976) 6,842 11,920 16,443 Purchases of property and equipment, including internal-use software and website development, net Acquisitions, net of cash acquired, and other Sales and maturities of marketable securities (4,893) (4,589) (6,737) (979) (795) (116) 3,349 3,025 4,733 Purchases of marketable securities (2,542) (4,091) (7,756) Net cash provided by (used in) investing activities FINANCING ACTIVITIES: Excess tax benefits from stock-based compensation Proceeds from long-term debt and other (5,065) (6,450) (9,876) 6 119 829 6,359 353 621 Repayments of long-term debt and other Principal repayments of capital lease obligations Principal repayments of finance lease obligations Net cash provided by (used in) financing activities Foreign currency effect on cash and cash equivalents Net increase (decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS, END OF PERIOD (513) (1,652) (354) (1,285) (2,462) (3,860) (135) (121) (147) 4,432 (3,763) (2,911) (310) (374) (212) 5,899 1,333 3,444 $ 14,557 $ 15,890 S 19,334 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest on long-term debt S 91 S 325 $ 290 Cash paid for interest on capital and finance lease obligations Cash paid for income taxes, net of refunds 86 153 206 177 273 412 Property and equipment acquired under capital leases 4,008 4,717 5,704 Property and equipment acquired under build-to-suit leases 920 544 1,209 See accompanying notes to consolidated financial statements. AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) Net product sales Net service sales Total net sales Operating expenses: Cost of sales Fulfillment Marketing Technology and content General and administrative Year Ended December 31, 2014 2015 2016 $ 70,080 $ 79,268 $ 94,665 18,908 27,738 41,322 88,988 107,006 135,987 62,752 71,651 88,265 10,766 13,410 17,619 4,332 5,254 7,233 9,275 12,540 16,085 1,552 1,747 2,432 Other operating expense, net 133 171 167 Total operating expenses 88,810 104,773 Operating income 178 2,233 131,801 4,186 Interest income 39 50 100 Interest expense (210) (459) (484) Other income (expense), net Total non-operating income (expense) Income (loss) before income taxes Provision for income taxes (118) (256) 90 (289) (665) (294) (111) 1,568 3,892 (167) (950) (1,425) Equity-method investment activity, net of tax 37 (22) (96) Net income (loss) $ (241) $ 596 $ 2,371 Basic earnings per share $ (0.52) $ 1.28 $ 5.01 Diluted earnings per share $ (0.52) $ 1.25 $ 4.90 Weighted-average shares used in computation of earnings per share: Basic Diluted 462 467 474 462 477 484 See accompanying notes to consolidated financial statements. AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in millions) Year Ended December 31, 2014 2015 2016 $ (241) $ 596 $ 2,371 Net income (loss) Other comprehensive income (loss): Foreign currency translation adjustments, net of tax of $(3), $10, and $(49) Net change in unrealized gains (losses) on available-for-sale securities: Unrealized gains (losses), net of tax of $1, $(5), and $(12) Reclassification adjustment for losses (gains) included in "Other income (expense), net," net of tax of $(1), $0, and $0 (325) (210) (279) 2 (7) (3) 5 8 Net unrealized gains (losses) on available-for-sale securities Total other comprehensive income (loss) (1) (2) 17 (326) (212) (262) Comprehensive income (loss) $ (567) $ 384 $ 2,109 See accompanying notes to consolidated financial statements. AMAZON.COM, INC. CONSOLIDATED BALANCE SHEETS (in millions, except per share data) ASSETS December 31, 2015 2016 Current assets: Cash and cash equivalents Marketable securities Inventories Accounts receivable, net and other Total current assets Property and equipment, net $ 15,890 $ 19,334 3,918 6,647 10,243 11,461 5,654 8,339 35,705 45,781 21,838 29,114 Goodwill 3,759 3,784 Other assets 3,445 4,723 Total assets $ 64,747 $ 83,402 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 20,397 $ 25,309 Accrued expenses and other 10,372 13,739 Unearned revenue 3,118 4,768 Total current liabilities 33,887 43,816 Long-term debt Other long-term liabilities Commitments and contingencies (Note 7) Stockholders' equity: 8,227 7,694 9,249 12,607 Preferred stock, $0.01 par value: Authorized shares - 500 Issued and outstanding shares - none Common stock, $0.01 par value: Authorized shares - 5,000 Issued shares 494 and 500 Outstanding shares - 471 and 477 5 Treasury stock, at cost (1,837) 5 (1,837) Additional paid-in capital 13,394 17,186 Accumulated other comprehensive loss (723) (985) Retained earnings 2,545 4,916 Total stockholders' equity 13,384 19,285 Total liabilities and stockholders' equity $ 64,747 $ 83,402 AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in millions) Balance as of January 1, 2014 Net loss Other comprehensive income (loss) Exercise of common stock options Excess tax benefits from stock-based compensation Stock-based compensation and issuance of employee benefit plan stock Issuance of common stock for acquisition activity Balance as of December 31, 2014 Common Stock Shares Amount Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) 459 $ 5 $ (1,837) $ 9,573 $ 6 - - - 2 6 1,510 44 (326) - - - Retained Earnings (185) $ 2,190 $ - (241) Total Stockholders' Equity 9,746 (241) - (326) 2 1,510 44 465 5 (1,837) 11,135 (511) 1,949 596 10,741 596 - 4 (212) (212) - 4 - 119 - - 119 2,131 2,131 Net income Other comprehensive income (loss) Exercise of common stock options 6 Excess tax benefits from stock-based compensation Stock-based compensation and issuance of employee benefit plan stock Issuance of common stock for acquisition activity Balance as of December 31, 2015 Net income Other comprehensive income (loss) Exercise of common stock options Excess tax benefits from stock-based compensation Stock-based compensation and issuance of employee benefit plan stock Balance as of December 31, 2016 5 5 471 5 (1,837) 13,394 (723) 2,545 13,384 - 2,371 2,371 (262) (262) 1 - 1 829 829 2,962 2,962 477 $ 5 $ (1,837) $ 17,186 $ (985) $ 4,916 $ 19,285 Wal-Mart Stores, Inc. Consolidated Statement of Income Fiscal Years Ended January 31, (Amounts in millions, except per share data) Revenues: Net sales 2017 2016 2015 $481,317 $478,614 $482,229 Membership and other income 4,556 3,516 3,422 Total revenues 485,873 482,130 485,651 Costs and expenses: Cost of sales 361,256 360,984 365,086 Operating, selling, general and administrative expenses 101,853 97,041 93,418 Operating income 22,764 24,105 27,147 Interest: Debt 2,044 2,027 2,161 Capital lease and financing obligations 323 521 300 Interest income Interest, net Income from continuing operations before income taxes Provision for income taxes Income from continuing operations Income from discontinued operations, net of income taxes Consolidated net income Consolidated net income attributable to noncontrolling interest Consolidated net income attributable to Walmart Basic net income per common share: Basic income per common share from continuing operations attributable to Walmart Basic income per common share from discontinued operations attributable to Walmart Basic net income per common share attributable to Walmart Diluted net income per common share: (100) (81) (113) 2,267 2,467 2,348 20,497 21,638 24,799 6,204 6,558 7,985 14,293 15,080 16,814 - 285 14,293 (650) 15,080 (386) 17,099 (736) $ 13,643 $ 14,694 $ 16,363 $ 4.40 $ 4.58 $ 5.01 - - 0.06 $ 4.40 $ 4.58 $ 5.07 Diluted income per common share from continuing operations attributable to Walmart Diluted income per common share from discontinued operations attributable to Walmart Diluted net income per common share attributable to Walmart $ 4.38 $ 4.57 $ 4.99 - 0.06 $ 4.38 $ 4.57 $ 5.05 Weighted-average common shares outstanding: Basic Diluted Dividends declared per common share 3,101 3,207 3,230 3,112 3,217 3,243 $ 2.00 $ 1.96 $ 1.92 See accompanying notes. Wal-Mart Stores, Inc. Consolidated Statement of Comprehensive Income Fiscal Years Ended January 31, (Amounts in millions) 2017 2016 2015 Consolidated net income $14,293 $15,080 $17,099 Less consolidated net income attributable to nonredeemable noncontrolling interest (650) (386) (736) Consolidated net income attributable to Walmart 13,643 14,694 16,363 Other comprehensive income (loss), net of income taxes Currency translation and other Net investment hedges (2,882) 413 (5,220) (4,558) 366 379 Cash flow hedges 21 (202) (470) Minimum pension liability (397) 86 (69) Other comprehensive income (loss), net of income taxes (2,845) (4,970) (4,718) Less other comprehensive income (loss) attributable to nonredeemable noncontrolling interest 210 541 546 Other comprehensive income (loss) attributable to Walmart (2,635) (4,429) (4,172) Comprehensive income, net of income taxes 11,448 10,110 12,381 Less comprehensive income (loss) attributable to nonredeemable noncontrolling interest Comprehensive income attributable to Walmart (440) 155 (190) $11,008 $10,265 $12,191 See accompanying notes. (Amounts in millions) ASSETS Current assets: Wal-Mart Stores, Inc. Consolidated Balance Sheets As of January 31, 2017 2016 Cash and cash equivalents Receivables, net Inventories Prepaid expenses and other Total current assets Property and equipment: Property and equipment Less accumulated depreciation Property and equipment, net $ 6,867 $ 8,705 5,835 5,624 43,046 44,469 1,941 1,441 57,689 60,239 179,492 176,958 (71,782) (66,787) 107,710 110,171 Property under capital lease and financing obligations: Property under capital lease and financing obligations Less accumulated amortization 11,637 11,096 (5,169) (4,751) Property under capital lease and financing obligations, net 6,468 6,345 Goodwill 17,037 16,695 Other assets and deferred charges 9,921 6,131 Total assets $198,825 $199,581 LIABILITIES AND EQUITY Current liabilities: Accounts payable Short-term borrowings $ 1,099 41,433 Accrued liabilities 20,654 $ 2,708 38,487 19,607 Accrued income taxes 921 521 Long-term debt due within one year 2,256 2,745 Capital lease and financing obligations due within one year 565 551 Total current liabilities 66,928 64,619 Long-term debt 36,015 38,214 Long-term capital lease and financing obligations 6,003 5,816 Deferred income taxes and other 9,344 7,321 Commitments and contingencies Equity: Common stock 305 317 Capital in excess of par value 2,371 1,805 Retained earnings 89,354 90,021 Accumulated other comprehensive loss (14,232) (11,597) Total Walmart shareholders' equity 77,798 80,546 Nonredeemable noncontrolling interest 2,737 3,065 Total equity 80,535 83,611 Total liabilities and equity $198,825 $199,581 See accompanying notes. Wal-Mart Stores, Inc. Consolidated Statements of Shareholders' Equity and Redeemaole Noncontrolling Interest Total Common Stock Capital in Excess of Walmart Nonredeemable Retained (Amounts in millions) Shares Amount Par Value Earnings Balances as of February 1, 2014 3,233 $323 $2,362 $76,566 $ (2,996) $76,255 Accumulated Other Redeemable Comprehensive Shareholders' Noncontrolling Total Noncontrolling Loss Equity Equity Interest $81,339 $1,491 Interest $5,084 Consolidated net income 16,363 16,363 736 17,099 Other comprehensive loss, net of income taxes Cash dividends declared ($1.92 per share) Purchase of Company stock Purchase of redeemable noncontrolling interest Other - 8 Balances as of January 31, 2015 3,228 Consolidated net income Other comprehensive loss, net of income taxes Cash dividends declared ($1.96 per share) Purchase of Company stock Cash dividend declared to noncontrolling interest Other | (65) el Balances as of January 31, 2016 3,162 | (13) el (1) - 8| gl | - (4,172) (4,172) (546) (4,718) (29) (6,185) (950) (6,185) (980) (6,185) (980) - - (1,491) 1 323 2,462 85,777 14,694 Consolidated net income Other comprehensive loss, net of income taxes Cash dividends declared ($2.00 per share) Purchase of Company stock Cash dividend declared to noncontrolling interest Other - Balances as of January 31, 2017 3,048 See accompanying notes. (17) (7,168) 113 (731) (618) 81,394 4,543 85,937 - 14,694 386 15,080 - (4,429) (4,429) (541) (4,970) | (6,294) (6) (102) (4,148) | | (6,294) (6,294) (4,256) (4,256) (691) (691) - - (1) (555) (8) 317 1,805 90,021 (11,597) - (563) (632) (1,195) 80,546 3,065 83,611 13,643 - 13,643 650 14,293 (120) (12) | | 6 740 $305 $2,371 21 1 | - (2,635) (2,635) (210) (2,845) (174) (6,216) (8,090) - (6,216) (8,276) - (6,216) - (8,276) - (4) $89,354 $(14,232) 736 16 (519) (249) (519) 487 $77,798 $2,737 $80,535 $ - - (Amounts in millions) Wal-Mart Stores, Inc. Consolidated Statements of Cash Flow 2017 Fiscal Years Ended January 31, 2016 2015 Cash flows from operating activities: Consolidated net income $14,293 $15,080 Income from discontinued operations, net of income taxes $ 17,099 (285) Income from continuing operations 14,293 15,080 16,814 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization 10,080 9,454 9,173 Deferred income taxes 761 (672) (503) Other operating activities 206 1,410 785 Changes in certain assets and liabilities, net of effects of acquisitions: Receivables, net (402) (19) (569) Inventories 1,021 (703) (1,229) Accounts payable 3,942 2,008 2,678 Accrued liabilities Accrued income taxes Net cash provided by operating activities 1,137 1,303 1,249 492 (472) 166 31,530 27,389 28,564 Cash flows from investing activities: Payments for property and equipment (10,619) (11,477) (12,174) Proceeds from the disposal of property and equipment 456 635 570 Proceeds from the disposal of certain operations 662 246 671 Purchase of available for sale securities (1,901) Investment and business acquisitions, net of cash acquired (2,463) Other investing activities (122) (79) (192) Net cash used in investing activities (13,987) (10,675) (11,125) Cash flows from financing activities: Net change in short-term borrowings Proceeds from issuance of long-term debt Payments of long-term debt Dividends paid (1,673) 1,235 (6,288) 137 39 5,174 (2,055) (4,432) (3,904) (6,216) (6,294) (6,185) Purchase of Company stock Dividends paid to noncontrolling interest Purchase of noncontrolling interest Other financing activities (8,298) (4,112) (1,015) (479) (719) (600) (90) (1,326) (1,844) (255) (513) (409) Net cash used in financing activities (18,929) (16,122) (15,071) Effect of exchange rates on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year (452) (1,022) (514) (1,838) (430) 1,854 8,705 9,135 7,281 Cash and cash equivalents at end of year $ 6,867 $ 8,705 $ 9,135 Supplemental disclosure of cash flow information: Income taxes paid Interest paid See accompanying notes. 4,507 8,111 8,169 2,351 2,540 2,433