Recently, 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 Wal-Mart Rival.” While Wal-Mart’s total sales would still exceed those of the combined company, Wal-Mart’s international sales are far less than those of the combined company. This is a serious concern for Wal-Mart, 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 Wal-Mart (in U.S. dollars) in a recent year. Even though their results are presented in different currencies, by employing ratios we can make some basic comparisons. CarrefourWal-Mart(in millions)(in millions)Sales revenue€70,486$256,329Cost of goods sold54,630198,747Net income1,7389,054Total assets39,063104,912Current assets14,52134,421Current liabilities13,66037,418Total liabilities29,43461,289Compare the two companies by answering the following.Calculate the gross profit rate for each of the companies. (Round answers to 1 decimal places, e.g. 15.2%.)Gross profit rateCarrefour%Wal-Mart Calculate the profit margin. (Round answers to 1 decimal places, e.g. 15.2%.)Profit marginCarrefourWal-MartCalculate the current ratio and debt to assets ratios for the two companies. (Round answers to 2 decimal places, e.g. 15.21 or15.21:1.)Current ratioDebt to assets ratioCarrefour:1Wal-Mart:1

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Description: Recently, 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 Wal-Mart Rival.” While Wal-Mart’s total sales would still exceed those o

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Recently, 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 Wal-Mart Rival.” While Wal-Mart’s total sales would still exceed those of the combined company, Wal-Mart’s international sales are far less than those of the combined company. This is a serious concern for Wal-Mart, 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 Wal-Mart (in U.S. dollars) in a recent year. Even though their results are presented in different currencies, by employing ratios we can make some basic comparisons.