Using an Excel spreadsheet* and your company's financial statements, compute the following for the most recent two years (chapters with information on each ratio are in parenthesis next to the ratio, refer to the tables in Section 13.3 Ratio Analysis on WileyPlus or pages 661-662, Appendix 13A provides a great example of ratio analysis):
- Current ratio (2,13)
- Working capital (not really a ratio) (2, 13)
- Inventory turnover ratio (6, 13)
- Accounts Receivable turnover ratio (8, 13)
- Debt to total assets ratio (2, 13)
- Return on assets (9,13)
- Asset turnover ratio (9, 13)
- Return on equity (11, 13)
- Gross profit ratio (5, 13)
- Profit margin ratio (5, 13)
Table of Contents Item 6. Selected Financial Data. The following table presents our selected financial data. The table should be read in conjunction with Item 7, Management's Discuss Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. Five-Year Financial Highlights $ in millions, except per share amounts Fiscal Year 2020(1) 2019 Consolidated Statements of Earnings Data Revenue $ 43,638 $ 42,879 Operating income 2,009 1,900 Net earnings from continuing operations 1,541 1,464 Gain from discontinued operations Net earnings 1,541 1,464 Per Share Data Diluted net earnings from continuing operations $ 5.75 $ 5.20 Net gain from discontinued operations Diluted net earnings 5.75 5.20 Cash dividends declared and paid 2.00 1.80 Operating Statistics Comparable sales growth(3) Gross profit rate Selling, general and administrative expenses rate Operating income rate Year-End Data Current ratio (4) 1.1 1.2 Total assets $ 15,591 $ 12,901 Debt, including current portion 1,271 1,388 Total equity 3,479 3,306 Number of stores Domestic(5) 1,009 1,026 International 222 212 Total 1.231 1,238 Retail square footage (in thousands) Domestic(5) 38,821 39,500 International 4,711 4,607 Total 43,532 44,107 (1) In the first quarter of fiscal 2020, we adopted new lease accounting guidance that resulted in the recognition of operating lease assets and operating lease liabilities 2.1 % 23.0 % 18.3 % 4.6% 4.8 % 23.2% 18.7 % 4.4 % Liquidity Ratios Working capital Current ratio p. 54 p. 54 Inventory turnover p. 283 Current assets - Current liabilities Current assets Current liabilities Cost of goods sold Average inventory 365 days Inventory turnover Net credit sales Average net accounts receivable 365 days Accounts receivable turnover Days in inventory p. 283 Accounts receivable turnover p. 395 Average collection period p. 395 Solvency Ratios Debt to assets ratio p. 56 Times interest earned Total liabilities Total assets Net income + Interest expense + Income tax expense Interest expense Net cash provided Capital Cash by operating activities expenditures dividends p. 497 Free cash flow p. 57 ILLUSTRATION 13-18 Summary of profitability ratios Profitability Ratios Earnings per share p. 53 Price-earnings ratio p. 660 Gross profit rate p. 234 Profit margin p. 235 Net income - Preferred dividends Weighted-average common shares outstanding Market price per share Earnings per share Gross profit Net sales Net income Net sales Net income Average total assets Net sales Average total assets Cash dividends declared on common stock Net income Net income - Preferred dividends Average common stockholders' equity Return on assets p. 444 Asset turnover p. 446 p. 560 Payout ratio Return on common stockholders' equity P. 561 Table of Contents Item 6. Selected Financial Data. The following table presents our selected financial data. The table should be read in conjunction with Item 7, Management's Discuss Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. Five-Year Financial Highlights $ in millions, except per share amounts Fiscal Year 2020(1) 2019 Consolidated Statements of Earnings Data Revenue $ 43,638 $ 42,879 Operating income 2,009 1,900 Net earnings from continuing operations 1,541 1,464 Gain from discontinued operations Net earnings 1,541 1,464 Per Share Data Diluted net earnings from continuing operations $ 5.75 $ 5.20 Net gain from discontinued operations Diluted net earnings 5.75 5.20 Cash dividends declared and paid 2.00 1.80 Operating Statistics Comparable sales growth(3) Gross profit rate Selling, general and administrative expenses rate Operating income rate Year-End Data Current ratio (4) 1.1 1.2 Total assets $ 15,591 $ 12,901 Debt, including current portion 1,271 1,388 Total equity 3,479 3,306 Number of stores Domestic(5) 1,009 1,026 International 222 212 Total 1.231 1,238 Retail square footage (in thousands) Domestic(5) 38,821 39,500 International 4,711 4,607 Total 43,532 44,107 (1) In the first quarter of fiscal 2020, we adopted new lease accounting guidance that resulted in the recognition of operating lease assets and operating lease liabilities 2.1 % 23.0 % 18.3 % 4.6% 4.8 % 23.2% 18.7 % 4.4 % Liquidity Ratios Working capital Current ratio p. 54 p. 54 Inventory turnover p. 283 Current assets - Current liabilities Current assets Current liabilities Cost of goods sold Average inventory 365 days Inventory turnover Net credit sales Average net accounts receivable 365 days Accounts receivable turnover Days in inventory p. 283 Accounts receivable turnover p. 395 Average collection period p. 395 Solvency Ratios Debt to assets ratio p. 56 Times interest earned Total liabilities Total assets Net income + Interest expense + Income tax expense Interest expense Net cash provided Capital Cash by operating activities expenditures dividends p. 497 Free cash flow p. 57 ILLUSTRATION 13-18 Summary of profitability ratios Profitability Ratios Earnings per share p. 53 Price-earnings ratio p. 660 Gross profit rate p. 234 Profit margin p. 235 Net income - Preferred dividends Weighted-average common shares outstanding Market price per share Earnings per share Gross profit Net sales Net income Net sales Net income Average total assets Net sales Average total assets Cash dividends declared on common stock Net income Net income - Preferred dividends Average common stockholders' equity Return on assets p. 444 Asset turnover p. 446 p. 560 Payout ratio Return on common stockholders' equity P. 561
