Question

1. Go to Yahoo Finance website.

2. Review the overview/main pages for the four public companies whose names your professor will provide to you.

3. Research the four firms using either Key Statistics or Financials from the overview/main pages for the stocks on Yahoo! Finance Web site. Compute and compare the following financial ratios for the four firms for their most recent fiscal years:< > Note: In Key Statistics under the heading "Valuation Measures" there are numbers for both Trailing P/E ratios and Forward P/E ratios. Most commonly, in calculating both ratios the corporation's current stock price is divided by its earnings per share (EPS). The difference is that Trailing P/E ratios use reported EPS for the past year, specifically the past/trailing 12 months (ttm), and Forward P/E ratios use estimated EPS for the upcoming 4 quarters. Also, in interpreting some of the other statistics provided, please note that "yoy" is an acronym for "year-on-year" and "mrq" is an acronym for "most recent quarter."

Walmart

Current Ratio (X) Sales/Total Assets (percent) or Total asset turnover Times interest earned (X) Total Debt/Equity (percent) Net Income / Net Sales (percent) or Return on Sales (ROS) Net Income / Total Assets (percent) or Return on Assets (ROA) Net Income / Common Equity (percent) or Return on Equity (ROE) P/E or P/E Ratio (X)

Answer 1

Answer:

1.         Chevron:

a. Current ratio = 0.95x

b. Sales/total assets = 110.215/260.078 = 42.37%

c. Times interest earned = EBIT / interest expense = -1959/201 = -9.74x

d. Total debt/equity = 29.08%

e. Net income/sales = 4.99%

d. Return on assets = 0.28%

e. Return on equity = 3.99%

f. Trailing P/E = 37.95, Forward P/E = 24.28

2.         Eaton

a. Current ratio = 1.19x

b. Sales/total assets = 19.747/30.419 = 64.91%

c. Times interest earned = EBIT / interest expense = 2257/233 = 9.68x

d. Total debt/equity = 55.25%

e. Net income/sales = 9.95%

d. Return on assets = 4.60%

e. Return on equity = 12.78%

f. Trailing P/E = 17.82, Forward P/E = 15.28

3.         Kroger

a. Current ratio = 0.87x

b. Sales/total assets = 115.337/36.505 = 315.95%

c. Times interest earned = EBIT / interest expense = 3436/522 = 6.58x

d. Total debt/equity = 228.65%

e. Net income/sales = 1.32%

d. Return on assets = 5.4%

e. Return on equity = 24.04%

f. Trailing P/E = 12.42, Forward P/E = 10.47

4.         Walmart

a. Current ratio = 0.78x

b. Sales/total assets = 485.873/198.825 = 244.37%

c. Times interest earned = EBIT / interest expense = 22864/2367 = 9.66x

d. Total debt/equity = 60.72%

e. Net income/sales = 2.60%

d. Return on assets = 7.05%

e. Return on equity = 17%

f. Trailing P/E = 18.98, Forward P/E = 17.10