Walmart Workings-2010

8/20/2019 Walmart Workings-2010

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Ratio Formula

Debt/Capital Ratio: Debt/(Debt +Shareholder's equity)

Return on Equity Net inome / shareholder's equity

Net !ar"in Net inome / re#enue

$ayout Ratio Di#idend per share / Earnin" per shareCurrent Ratio urrent liability / urrent assets

Current F% $/E (&) !aret prie / earnin" per share

$rior F% $/E (&*) !aret $rie / Earnin" per share

$rie / Sales $rie / Re#enue per share

$rie/oo $rie / oo ,alue per share

oo ,alue / Share oo #alue per share

!aret Capitali-ation .utstandin" shares maret share prie


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Results Comment

001223

*1443

5103

&*1563162 times

7156

717E8hibit 4

10

&165

6164

&49207 millions


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WMT: Valuation

Dividend Discount Method Da

P D/(;e < ")

&

Ke

R= + > (Rm?R= ) 5P (payout rate) = Dividend payment / recent earning per share

Payout ratio 29%

Ke 41**3

g = (1-p)*Ke !"9"1

WMT share price $ 59.08

Assumptions:

1! #is$ ree rate (&overnment 'ond yied)

2! dusted 'eta o +a-,art

! .istorica 0 ,ar$et ris$ premium

"!Dividend 1= 1!21


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ta

R= 51463

@dA eta 14005

!aret premium 0103


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WMT: Valuation

3ntrinsic vaue (Price) = the proect (upcoming year) earning/share * or4ard-oo

Proected P/5 ratio = 517 (E8hibit 2)

3ntrinsic 7aue = B 0015

Assumptions:

B 71

8urrent earning per share B 512&

5stimated current earnings gro4th

173

1! he proect (upcoming year)earning/ share:


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$ing P/5 mutipe (as proected 6y anayst)


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WMT: Valuation

Disount rate 41**3 Other infor

Growth Period Current Fisal

roth years 0 Current alen

nitial "roth rate o= E$S 173 Current payoMaturity period roth years

$ayout at maturity 73

Retention rate at maturity 43

roth rate at !aturity 53 roth + tra

Transition period Terminal Va

ransition years &

ransition years payout 5&

%ear @ssumption E$S roth Di#idend

roth year E$S B 71 173 B 1&

& roth year E$S B 7105 173 B 155

5 roth year E$S B 01 173 B 172

7 roth year E$S B 0105 173 B 14&

0 roth year E$S B 41 173 B 12*

4 ransition %ear E$S B 4127 *1663 B &14

2 ransition %ear E$S B 217 *15*3 B &152

6 ransition %ear E$S B 61 61*&3 B &10*

* ransition %ear E$S B 616& 61723 B &16&

ransition %ear E$S B *104 6103 B 514

ransition %ear E$S B 155 21473 B 515

& ransition %ear E$S B 1& 21&43 B 5104

5 ransition %ear E$S B 1*5 41*3 B 516&

7 ransition %ear E$S B &120 41003 B 716

0 ransition %ear E$S B 510* 41&53 B 7150

4 ransition %ear E$S B 7177 01*&3 B 714&

2 ransition %ear E$S B 01&* 014&3 B 716*

6 !aturity B 410 513 B 4174

Estimated G! share prie

Assumptions:

@ssumin" the ompany ill e8periene si"niHant "roth at the rate o= 17 3 durin" it's "roth ye

& Durin" the transition year (yr 4?2) e belie#e the proHtability o= Galmart ill "radually deline to

5 Durin" the maturity year (yr 6) e belie#e the proHtability o= Galmart is at the industry a#era"e (5


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ation

year E$S 512&

der year di#idend 1*

t &*153 payout urrent &*153

sition years 2

lue = DIV1/(r-g)

$ayout ,

&*153 B 1&

&*153 B 14

&*153 B 1&

&*153 B 1&7

&*153 B 1&6

5&13 B 177

5&13 B 176

5&13 B 10

5&13 B 107

5&13 B 104

5&13 B 102

5&13 B 106

5&13 B 10*

5&13 B 10*

5&13 B 106

5&13 B 102

5&13 B 41*5 B 0&1*

713

B 20166

rs (0 years)1

rds the industry a#era"e1

)

$,(Di#+,)

Walmart Workings-2010

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