PRACTICE!

Read the article and answer the questions.

Financial Statements for Walmart Stores Inc. and Macy's Inc.

Table 3-8 contains the financial results for Walmart and Macy's for 2012. Evaluate the financial performance of each company based on the various metrics discussed in Section 3.1, such as ROE, ROA, profit margin, asset turns, APT, C2C, ART, INVT, and PPET. Can you explain the differences you see in their performance based on their supply chain strategy and structure? Compare the metrics for each company with similar metrics for Amazon and Nordstrom from Table 3-1. Which metrics does each company perform better on? What supply chain drivers and metrics might explain this difference in performance?

TABLE 3-8Selected Financial Data for Walmart Stores Inc. and Macy's Inc.

Year ended January 31, 2013 ($ millions)	Walmart	Macy's
Net Operating Revenues	469,162	27,931
Cost of goods sold	352,488	16,725
Gross Profit	116,674	11,206
Selling, general, and administrative expense	88,873	8,440
Other costs		88
Operating Income	27,801	2,678
Interest expense	2,251	388
Other income(loss) - net	187	134
Income before income taxes	25,737	2,290
Income taxes	7,981	804
Net income	17,756	1,486
Assets
Cash and cash equivalents	7,781	1,836
Net receivables	6,768	371
Inventory	43,803	5,308
Prepaid expenses and other	1,588	361
Total current assets	59,940	7,876
Property, plant, & equipment	116,681	8,196
Goodwill	20,497	3,743
Other intangible assets		561
Other assets	5,987	615
Total assets	203,105	20,991
Liabilities & Stockhold Equity
Accounts payable	59,099	4,951
Short-term debt	12,719	124
Total current liability	71,818	5,075
long-term debt	41,417	6,806
Other liabilities		3,059
Total liabilities	121,367	14,940
Stockholder equity	81,738	6,051

a) Evaluate the financial performance of each company (Walmart, and Macy's) based on the various metrics discussed in Section 3.1 such as ROE, ROA, ROFL, Profit Margin, Asset Turnover, APT, ART, INVT, PPET, and C2C. Can you explain the differences you see in their performance based on their supply chain strategy and structure?

b) Compare the metrics for each company (Walmart, and Macy's) with similar metrics for Amazon and Nordstrom from Table 3.1. Which metrics does each company perform better on?

Table 3.1

	Amazon.com	Nordstrom Inc.
Period Ending	31-Dec-13	2-Feb-13
Total Revenue	74,452,000	12,148,000
Cost of Goods Sold	54,181,000	7,432,000
Gross Profit	20,271,000	4,716,000
Selling, General, & Administrative	19,526,000	3,371,000
Operating Income or Loss	745,000	1,345,000
Total Other Income/Expenses Net	-98,000	-
Earnings Before Interest and Taxes	647,000	1,345,000
Interest Expense	141,000	160,000
Income Before Tax	506,000	1,185,000
Income Tax Expense	161,000	450,000
Minority Interest	-71,000	-
Net Income	274,000	735,000
Assets
Cash and Cash Equivalents	8,658,000	1,285,000
Short-Term Investments	3,789,000	-
Net Receivables	4,767,000	2,129,000
Inventory	7,411,000	1,360,000
Current Deferred Tax Assets, Net		227,000
Other current Assets	-	80,000
Total current assets	24,625,000	5,081,000
Property, Plant, and Equipment (PPE & E)	10,949,000	2,579,000
Goodwill	2,655,000	175,000
Other Assets	1,930,000	254,000
Total Assets	40,159,000	8,089,000
Liabilities and Stockholder Equity
Accounts payable	21,821,000	1,011,000
Short-/Current Long-term Deby	-	7,000
Accrued Salaries, Wages, and Related Benefits		404,000
Other Current Liabilities	1,159,000	804,000
Long-Term Debt	3,191,000	3,124,000
Other Liabilities	4,242,000	341,000
Deferred Long-Term Liability Charges	-	485,000
Total Liabilities	30,413,000	6,176,000
Total Stockholder Equity	9,746,000	1,913,000

c) What supply chain drivers and metrics might explain their differences in performance?