Computing Return on Equity and Return on Assets
The following table contains financial statment information forWalmart Stores Inc.
| $ millions | Total Assets | Net Income | Sales | Equity |
| 2015 | 199,581 | 14,694 | 478,614 | 80,546 |
| 2014 | 203,490 | 16,363 | 482,229 | 81,394 |
| 2013 | 204,751 | 16,022 | 473,076 | 76,255 |
Questions
A. Compute the return on euqity (ROE) for 2014 and 2015. Whattrend, if any, is evident? How does Wal-Mart's ROE compare withapproximately 18.9% ROE for companies in the Dow Jones INdustrialaverage of 2015?
B. Compute the return on assets for 2014 and 2015. What trends,if any, are evident? How does Wal-Mart's ROA compare with theapproximate 7.1% median ROA for companies in the DOW JonesIndustrial average for 2015?
C. What factors might allow a company like Walmart to reapabove-average returns?
