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Problem Six: Wal*Mart
Refer to Wal*Mart's Financial Statements, Below A Calculate: Total Debt/equity Ratio and Times Interest Earned Ratio

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Problem Six: Wal*Mart
Refer to Wal*Mart's financial statements, below. Problem Six: Wal*Mart Refer to Wal*Mart's financial statements, below. \begin{array}{|l|r|r|} \hline\text{Shareholders' Equity}&&\\ \hline\text{Preferred stock ( \$.10 par value: 100 share authorized, none issued)}&&\\ \hline\text{Common stock ( \$ .10 par value; 5,500 shares}&&\\ \text{authorized. 2,285 and 2,293 issued and outstanding in}&&\\ \hline 1997 \text { and } 1996, \text { respectively) } & 228 & 229 \\ \hline \text { Capital in excess of par value } & 547 & 545 \\ \hline \text { Retained earnings } & 16,768 & 14,394 \\ \hline \text { Foreign currency translation adjustment } & {(400)}&{(412)} \\ \hline \text { Total shareholders' equity } & \underline{17,143} & 14,756 \\ \hline \text { Total liabilities and shareholders' equity } & \$ 39,604 & \$ 37,541 \\ \hline \end{array} a. Calculate: total debt/equity ratio and times interest earned ratio for fiscal X6 and X7. Comment on your results. b. Analysis of Wal*Mart's footnotes reveals the existence of significant operating leases. Explain whether this would change your answer in part a) and how you would make the changes.
Problem Six: Wal*Mart Refer to Wal*Mart's financial statements, below. \begin{array}{|l|r|r|} \hline\text{Shareholders' Equity}&&\\ \hline\text{Preferred stock ( \$.10 par value: 100 share authorized, none issued)}&&\\ \hline\text{Common stock ( \$ .10 par value; 5,500 shares}&&\\ \text{authorized. 2,285 and 2,293 issued and outstanding in}&&\\ \hline 1997 \text { and } 1996, \text { respectively) } & 228 & 229 \\ \hline \text { Capital in excess of par value } & 547 & 545 \\ \hline \text { Retained earnings } & 16,768 & 14,394 \\ \hline \text { Foreign currency translation adjustment } & {(400)}&{(412)} \\ \hline \text { Total shareholders' equity } & \underline{17,143} & 14,756 \\ \hline \text { Total liabilities and shareholders' equity } & \$ 39,604 & \$ 37,541 \\ \hline \end{array} a. Calculate: total debt/equity ratio and times interest earned ratio for fiscal X6 and X7. Comment on your results. b. Analysis of Wal*Mart's footnotes reveals the existence of significant operating leases. Explain whether this would change your answer in part a) and how you would make the changes.
Shareholders’ EquityPreferred stock ( $.10 par value: 100 share authorized, none issued)Common stock ( $.10 par value; 5,500 sharesauthorized. 2,285 and 2,293 issued and outstanding in1997 and 1996, respectively) 228229 Capital in excess of par value 547545 Retained earnings 16,76814,394 Foreign currency translation adjustment (400)(412) Total shareholders’ equity 17,143‾14,756 Total liabilities and shareholders’ equity $39,604$37,541\begin{array}{|l|r|r|}\hline\text{Shareholders' Equity}&&\\\hline\text{Preferred stock ( \$.10 par value: 100 share authorized, none issued)}&&\\\hline\text{Common stock ( \( \$ .10 \) par value; 5,500 shares}&&\\\text{authorized. 2,285 and 2,293 issued and outstanding in}&&\\\hline 1997 \text { and } 1996, \text { respectively) } & 228 & 229 \\\hline \text { Capital in excess of par value } & 547 & 545 \\\hline \text { Retained earnings } & 16,768 & 14,394 \\\hline \text { Foreign currency translation adjustment } & {(400)}&{(412)} \\\hline \text { Total shareholders' equity } & \underline{17,143} & 14,756 \\\hline \text { Total liabilities and shareholders' equity } & \$ 39,604 & \$ 37,541 \\\hline\end{array}
a. Calculate: total debt/equity ratio and times interest earned ratio for fiscal X6 and X7. Comment on your results.
b. Analysis of Wal*Mart's footnotes reveals the existence of significant operating leases. Explain whether this would change your answer in part a) and how you would make the changes.

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a. blured image X6
Total debt to equity = 0.91
Times...

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