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Interpreting Financial Statements: Computing Probability Ratios

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Compute profitability ratios -

Please help calculate 1. Profit margin, 2. Asset turnover, 3. Return of assets. 4 Return on common stockholder's equity for Walmart/Target. What information outside the annual report may be useful to you as an investor? Why?

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Solution Summary

The solution assists in interpreting financial statements and computing probability ratios.

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Profit Margin: Shows the combined effects of liquidity, asset management and debt on operating results.

Profit Margin = Net income available to common stockholders
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Sales

Asset Turnover:

The asset turnover ratio calculates the total revenue for every dollar of assets a company owns. To calculate asset turnover, take the total revenue and ...

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