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A Refer to Wal-Mart Financial Statements, Above

Question 20

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a. Refer to Wal-Mart financial statements, above. Prepare a forecasted income statement for Year 8 assuming: • Total revenues are expected to increase by 12% from Year 7 to Year 8. • Operating income as a percentage of total revenues will remain unchanged from Year 7 to Year 8. • Total interest costs will increase by 10%. • Effective tax rate is 37%. b. What additional information will Wal-Mart need in order to assess whether it needs additional outside funding?
a. Refer to Wal-Mart financial statements, above. Prepare a forecasted income statement for Year 8 assuming:

• Total revenues are expected to increase by 12% from Year 7 to Year 8.
• Operating income as a percentage of total revenues will remain unchanged from Year 7 to Year 8.
• Total interest costs will increase by 10%.
• Effective tax rate is 37%.

b. What additional information will Wal-Mart need in order to assess whether it needs additional outside funding?

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