Walmart Stock Valuation

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Question

1. - Develop a pro forma income statement and balance sheet for Wal-Mart for the fiscal year ending January 31, 2006. Assume the following (in addition to the information provided in the case): selling, general and administrative expenses at 17.3 percent of anticipated net sales
interest on debt at an average rate of four percent
no change in the number of shares outstanding as of January 31, 2005
no change in prepaid and other current assets, other assets, accrued liabilities, deferred income tax, or minority from the January 31, 2005 levels. State any other key assumptions. How profitable do you anticipate Wal-Mart will be? Will Wal-Mart need to increase its reliance on external borrowing? 2. How does Wal-Mart s 2006 EPS based on your pro forma income statement compare with the analysts estimates of $2.63? 3. Provide a DuPont decomposition comparing Wal-Mart s projected ROE in 2006 and its actual ROE in 2005. What is the cause of any changes? Is there a problem here? Attachments: walmart.pdf Feb 28 2014 10:03 PM

 

Solution ID:608959 | This paper was updated on 26-Nov-2015

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