At one time, it was announced that two giant French retailers, Carrefour SA and Promodes SA, would merge. A headline in the Wall Street Journal blared, "French Retailers Create New Walmart Rival. While Walmart's total sales would still exceed those of the combined company, Walmart's international sales are far less than those of the combined company. This is a serious concern for Walmart, since its primary opportunity for future growth lies outside of the United States.
Below are basic financial data for the combined corporation (in euros) and Walmart (in U.S. dollars). Even though their results are presented in different currencies, by employing ratios we can make some basic comparisons.
Carrefour
(in millions)
Walmart
(in millions)
Sales revenue
€70.486
$256,329
Cost of goods sold
54.630
198.747
Net income
1,738
9.054
Total assets
39,063
104,912
Current assets
14,521
34,421
Current liabilities
13,660
37,418
Total liabilities
29,434
61,289
Compare the two companies by answering the following.
(a1)
Your answer is correct.
Calculate the gross profit rate for each of the companies. (Round answers to 1 decimal places, eg. 15.2%)
Gross profit rate
Carrefour
22.5
Walmart
22.5
(b1)
eTextbook and Media
Your answer is correct.
Calculate the profit margin. (Round answers to 1 decimal places, eg. 15.2%)
Carrefour
Walmart
(c1)
Profit margin
eTextbook and Media
3.5
Attempts: unlimited
Attempts: unlimited
Your Answer Correct Answer
Your answer is partially correct.
Calculate the current ratio and debt to assets ratio for each of the two companies. (Round answers to 2 decimal piaces, eg 15.21 or 15.21:1.)
Current ratio
Debt to assets ratio
Carrefour
1.06
75.35%
Walmart
0.92 :1
58.3