Computing Return on Equity and Return on Assets

The following table contains financial statement information for Walmart Inc.

$ millions	Total Assets	Net Income	Sales	Equity
2018	$219,295	$6,670	$510,329	$72,496
2017	204,522	9,862	495,761	77,869
2016	198,825	13,643	481,317	77,798

a. Compute return on equity (ROE) for the two recent years. b. Compute return on assets (ROA) for the two recent years. c. Compute profit margin (PM) for the two recent years. d. Compute asset turnover (AT) for the two recent years.

• Round ROE, ROA and PM to one decimal place (example: 0.2345 = 23.5%).
• Round AT to two decimal places (example: 1.35).

	2018	2017
ROE	Answer	Answer
ROA	Answer	Answer
PM	Answer	Answer
AT	Answer	Answer

e. Which of the following best explains the change in ROA during 2018? (Select which one applies)

The companys profitability weakened considerably.

The companys asset productivity weakened considerably.

The company had higher sales in 2018.

The company had higher assets 2018.