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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 Preview

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

    Profit Margin = Net income available to common stockholders
    -------------------------------------------------------
    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 ...

    Solution Summary

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

    $2.19

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