Problem: Discuss the trend for each ratio and what it tells you about the organization's financial health. Ratios are given.
2008
Ratio Calculations
Wal-Mart 2008
Current ratio = (Current Assets)/(Current Liabilities) Current ratio = (47,585 (m))/(58,454 (m)) Current ratio = 0.814
Debt Ratio = (Total Debt)/(Total Assets) Debt Ratio = (98,906 (m))/(163,514 (m)) Debt Ratio = .6048778
Return on Equity = (Net Income)/(Total Equity) Return on Equity = (12,731 (m))/(64,608 (m)) Return on Equity = 0.19705
Day’s Receivable = 365/(Receivables Turnover) Receivables Turnover = Sales/(Accounts Receivable)
Receivables Turnover = (374,526 (m))/(3,654 (m)) = 102.4975 Day’s Receivable = 365/102.4975 = 3. 56 days
Ratio Calculations
Wal-Mart 2009
Current ratio = 48,754 / 55,390= .880194981
Debt Ratio = 42,218 / 48,949= .8624895299
Return on Equity = 22,798 / 65,285= .3492073217
Day’s Receivable = 365 / 102.7513444= 3.552264957
Receivables Turnover r= 401,244 / 3,905= 102.7513444