Using the Consolidated Financial Statement provided for Wal-Mart, calculate return on common equity (ROCE) for fiscal X4 and X7.

Identify, as far as allowed by the data, components driving any changes in ROCE from X4 to X7. (Disaggregate ROCE into net operating profit margin, net operating asset turnover and leverage.)

Wal-Mart (in millions, except for per share data) Consolidated Statements of Operations Fiscal Year Ended 31-Jan31-Jan31-Jan 31-Jan31-Jan 31-Jan 31-Jan X3 Net sales Rentals from licensed dept Other income, net Total revenues Cost of sales Operating, selling, general d& administrative Expenses Total operating expenses Operating income Interest costs Debt Capital leases S43,887 S55,484 S67,345S82,494$93,627 $104,859 1287 83,663 16,788 918 1,122 34,78644,17453,44465,58674,564 8,32110,33312,85814,951 5,234 692 374 44,28955,98567,98583,41294,749106,146118,884 465 593 6,684 41,47052,49563,77778,44489,515 100,451 2,819 3,490 4,2084,968 5,6956,378 143 180 323 2,5533,167 331 186 517 3,691 520 186 706 4,262 629 196 266 930 4,8505,449 845 Income before taxes ncome tax expense Current 9061,1371,3251,572 9 1,581 1,530 1,974 Deferred 2,016 S 1,608$1,995 $2,333S2,681$2,740 S 3,056S3,433 945 1,172 1,606 1,794 Net income EPS Dividends per share (for the whole year) S0.70 $0.87 S1.02 S1.17 $1.19 S1.33 S0.09 $0.11 S0.13 S0.17 $0.20 S0.21 Wal-Mart (Amounts in millions) Consolidated Balance Sheets 31-Jan 31-Jan Assets Current assets Cash and cash equivalents Receivables Inventories $ 883 845 $ 83 853 16,300 15,989 At replacement cost Less LIFO reserve 16,193 296 15,897 368 17,993 Inventories at LIFO Prepaid expenses and other 406 Total current assets Property, plant, and equipment, at cost Land Building and improvements Fixtures and equipment Transportation equipment 3,689 12,724 6,390 379 23,182 4,849 18,333 3,559 11,290 5,665 20,850 3,752 17,098 Less accumulated depreciati on Net property, plant, and equipment Property under capital leases Less accumulated amortization 680 Net property under capital leases Other assets and deferred charges Total assets 1,991 1,287 $39,604 1,316 $37,541 Liabilities and Shareholders' equity Current liabilities Commercial paper Accounts payable Accrued liabilities Accrued income taxes Long-term debt due within one year Obligations under capital leases due within one year $ 2.458 6,442 7,628 2.413 95 10,957 Total current liabilities 11,454 Long-term debt Long-term obligations under capital leases Deferred income taxes and other Minority interest 7,709 2,307 463 1,025 8,508 2,092 400 Shareholders equity: Preferred stock ($.10 par value 100 shares authorized, none issued) Common stock ($.10 par value, 5,500 shares authorized, 2,285 and 2,293 issued and outstanding in X6 and X7, respectively) Capital in excess of par value Retained earnings Foreign currency translation adjustment 16,768 (400 14,394 412 Total shareholders' equity Total liabilities and shareholders' equity $39604 $37.541