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Financial Performance
Kmart vs. Wal-Mart
Objectives
Relevant Principles
Accounts Receivable/(Sales/365)
2001
2.01
0.32
2000
2.00
0.26
Kmart
1999
2.12
0.35
#DIV/0!
4.63
#DIV/0!
3.96
#DIV/0!
4.03
#DIV/0!
3.95
#DIV/0!
3.84
Wal-Mart
2000
1999
0.94
1.26
0.18
0.24
1998
1.34
0.20
1997
1.64
0.19
2.99
122.23
5.66
2.90
125.65
5.25
1998
2.28
0.34
1997
2.15
0.38
2001
0.92
0.18
3.34
109.33
7.01
2.93
124.39
6.55
2.93
124.52
6.37
Debt Ratio
Times-Interest-Earned Ratio
2001
58.4%
-0.16
Kmart
2000
1999
58.3%
57.8%
4.64
3.72
1998
52.7%
2.15
1997
57.5%
1.73
Wal-Mart
2000
1999
63.3%
57.8%
9.89
10.19
1998
59.2%
8.29
1997
56.7%
6.77
Debt Ratio
Times-Interest-Earned Ratio
2001
59.9%
8.36
1997
-4.3%
1997
17.8%
ROE =
(ignore taxes for this example)
ROE =
15,000 =15%
100,000
ROE =
ROE =
15,000 - 4,000 =
50,000
ROE =
15,000 - 4,000 =
50,000
22%
ROE Components:
Net Profit Margin
Total Asset Turnover
Return on Assets
1 - Debt Ratio
Return On Equity
2001
-0.6%
2.53
-1.6%
0.42
-3.8%
2001
3.3%
2.47
8.1%
0.40
20.1%
2000
1.1%
2.38
2.7%
0.42
6.4%
Kmart
1999
1.5%
2.38
3.7%
0.42
8.7%
1998
0.8%
2.37
1.8%
0.47
3.9%
1997
-0.7%
2.20
-1.5%
0.43
-3.6%
2000
3.2%
2.37
7.6%
0.37
20.8%
Wal-Mart
1999
3.2%
2.78
8.9%
0.42
21.0%
1998
3.0%
2.63
7.8%
0.41
19.1%
1997
2.9%
2.68
7.7%
0.43
17.8%