You are considering an investment in the common stock of Wal-Mart. The following information is from the

Question:

You are considering an investment in the common stock of Wal-Mart. The following information is from the financial statements of Wal-Mart Stores, Inc. and Subsidiaries included in Form

10-K for fiscal years 2014 and 2013 (in millions of dollars):

The following information is from the financial statements included in Form 10-K for fiscal years 2013 and 2012 for Target Corporation (in millions of dollars):

Required
Part A. The Ratio Analysis Model
An investor must assess how well a company is managing its inventory before buying its stock. The inventory turnover ratio tells us how many times in a year a company sells its inventory. Replicate the five steps in the Ratio Analysis Model on page 248 to analyze the inventory turnover ratios for Wal-Mart and Target:
1. Formulate the Question
2. Gather the Information from the Financial Statements
3. Calculate the Ratio
4. Compare the Ratio with Other Ratios
5. Interpret the Ratios
Part B. The Business Decision Model
An investor must consider a variety of factors, including financial ratios, before buying stock. Replicate the five steps in the Business Decision Model on page 249 to decide whether to buy stock in Wal-Mart.
1. Formulate the Question
2. Gather Information from the Financial Statements and Other Sources
3. Analyze the Information Gathered
4. Make the Decision
5. Monitor Your Decision

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...