Question

You are considering an investment in the common stock of Wal-Mart. The following information is from the consolidated statements of income of Wal-Mart Stores, Inc. and Subsidiaries for the years ended January 31, 2016 and 2015 and the consolidated statements of operations for its competitor Target Corporation for the years ended January 30, 2016, and January 31, 2015 (included in the companies’ Form 10-Ks, amounts in millions of dollars):

	Wal-Mart		Target
(in millions)	Year Ended January 31, 2016	Year Ended January 31, 2015	Year Ended January 30, 2016	Year Ended January 31, 2015
Sales*	$478,614	$482,229	$73,785	$72,618
Cost of sales	360,984	365,086	51,997	51,278

*Described as net sales by Wal-Mart.

Required:

1. Calculate the gross profit ratios for Wal-Mart and Target for 2016 and 2015. Enter the amounts as a percent, rounded to one decimal place.

Wal-Mart's 2016 gross profit ratio:	%
Wal-Mart's 2015 gross profit ratio:	%
Target's 2016 gross profit ratio:	%
Target's 2015 gross profit ratio:	%

Answer 1

(a) 24.6%

(b)24.3%

(c)29.5%

(d)29.4%