Walmart- Final Project.docx
21Wal-Marts Financial Reporting Analysis
SECTION 1: EXECUTIVE SUMMARYIn this section provide a brief
overview of the corporation. Participants are not limited but, at a
minimum, should provide the following information: Official name of
the corporationWal-Mart Stores Inc. Location of the corporate
headquarters 702 SW 8th Street Bentonville, AR 72716 The state in
which the company is incorporatedArizona Company Internet address
http://www.walmart.com Stock symbol of the corporation and the
exchange on which it is traded WMT Fiscal year-end of the
corporationJanuary 31, 2011 Date of the 10-K filing according to
the financial statements providedLast Tuesday of March The Companys
independent accountant/auditorWal-Mart's independent accountants
are responsible for auditing Wal-Mart's The primary products(s)
and/or services (s) of the corporationWal-Mart is one of the
largest chains, which operates in three large segments: The Walmart
U.S., the Walmart International, and the Sams Club. In this report
we are focusing mainly on Walmart US. This latter is has a
momentous presence in the retail industry, operating throughout the
United States. The Walmart U.S segment includes the Companys mass
merchant concept under the Walmart or Wal-Mart brand, as well as
walmart.com. (Reuters, n.d)Walmart offers various lines of products
and services including the following: Retail goods, which consists
of a large variety of categories, namely electronics, home
furnishing, sporting goods, baby products, and grocery items
(Washington, n.d) Photo Services: Walmart makes a photo lab
available for customers inside the stores and online. They are
provided the possibility to upload their photos via the companys
website, or drop them off for developing via a store kiosk
(Washington, n.d) Pharmacy: Walmart started pharmacy operations as
of 2006. Since then, it has been providing customers with
prescriptions, which they could pick-up in-store or be shipped by
mail. Walmart has available a catalog of 300 generic medications
for no more than four dollars in-store, and ten dollars for a
90-day supply (Washington, n.d) Financial Services: Besides the
aforementioned products and services, Walmart also provides its
customers with a wide range of financial services, namely a
non-annual-fee credit card, a debit card ready to obtain in-strore
or online, money transfer service through MoneyGram, and check
cashing and check printing. At Walmart, customers can also purchase
money orders, gift cards, and pays bills (Washington, n.d) Wireless
Services: Last but not least, Walmart partnered with T-mobile only
to give birth to The Walmart Family Talk Wireless, which is a
service that provides customers with a family plan for unlimited
text and voice calls (Washington, n.d)
SECTION2: BALANCE SHEET ANALYSIS
Vertical Analysis
WAL-MART STORES INC (WMT) BALANCE SHEET
Fiscal year ends in January2013-01%2012-01%
Assets
Current assets
Cash
Cash and cash equivalents77810003.83%6,550,0003.39%
Total cash7,781,0003.83%6,550,0003.39%
Receivables6,768,0003.33%5,937,0003.07%
Inventories43,803,00021.57%40,714,00021.05%
Prepaid expenses1,588,0000.78%1,685,0000.87%
Other current assets89,0000.05%
Total current assets59,940,00029.51%54,975,00028.42%
Non-current assets
Property, plant and equipment
Land25,612,00012.61%23,499,00012.15%
Fixtures and equipment43,699,00021.52%41,916,00021.67%
Other properties102,413,00050.42%95,523,00049.39%
Property and equipment, at
cost171,724,00084.55%160,938,00083.21%
Accumulated
Depreciation(55,043,000)(27.10)%(48,614,000)(25.14)%
Property, plant and equipment,
net116,681,00057.45%112,324,00058.08%
Goodwill20,497,00010.09%20,651,00010.68%
Other long-term assets5,987,0002.95%5,456,0002.82%
Total non-current assets143,165,00070.49%138,431,00071.58%
Total assets203,105,000100.00%193,406,000100.00%
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt12,392,0006.10%6,022,0003.11%
Capital leases327,0000.16%326,0000.17%
Accounts payable38,080,00018.75%36,608,00018.93%
Taxes payable5,062,0002.49%1,164,0000.60%
Accrued liabilities15,957,0007.86%18,154,0009.39%
Other current liabilities26,0000.01%
Total current liabilities71,818,00035.36%62,300,00032.21%
Non-current liabilities
Long-term debt38,394,00018.90%44,070,00022.79%
Capital leases3,023,0001.49%3,009,0001.56%
Deferred taxes liabilities7,613,0003.75%7,862,0004.07%
Minority interest5,395,0002.66%4,446,0002.30%
Other long-term liabilities519,0000.26%404,0000.21%
Total non-current
liabilities54,944,00027.05%59,791,00030.91%
Total liabilities126,762,00062.41%122,091,00063.13%
Stockholders' equity
Common stock332,0000.16%342,0000.18%
Additional paid-in capital3,620,0001.78%3,692,0001.91%
Retained earnings72,978,00035.93%68,691,00035.52%
Accumulated other comprehensive
income(587,000)(0.29)%(1,410,000)(0.73)%
Total stockholders' equity76,343,00037.59%71,315,00036.87%
Total liabilities and stockholders'
equity203,105,000100.00%193,406,000100.00%
Year to Year Change
WAL-MART STORES INC (WMT) BALANCE SHEET
Fiscal year ends in January2013-012012-01+/- $%
Assets
Current assets
Cash
Cash and cash equivalents7,781,0006,550,0001,231,00018.79
Total cash7,781,0006,550,000123100018.79
Receivables6,768,0005,937,00083100014.00
Inventories43,803,00040,714,00030890007.59
Prepaid expenses1,588,0001,685,000(97000)(5.76)
Other current assets89,000(89000)(100.00)
Total current assets59,940,00054,975,00049650009.03
Non-current assets
Property, plant and equipment
Land25,612,00023,499,00021130008.99
Fixtures and equipment43,699,00041,916,00017830004.25
Other properties102,413,00095,523,00068900007.21
Property and equipment, at
cost171,724,000160,938,000107860006.70
Accumulated
Depreciation(55,043,000)(48,614,000)(6429000)13.22
Property, plant and equipment,
net116,681,000112,324,00043570003.88
Goodwill20,497,00020,651,000(154000)(0.75)
Other long-term assets5,987,0005,456,0005310009.73
Total non-current assets143,165,000138,431,00047340003.42
Total assets203,105,000193,406,00096990005.01
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt12,392,0006,022,0006370000105.78
Capital leases327,000326,00010000.31
Accounts payable38,080,00036,608,00014720004.02
Taxes payable5,062,0001,164,0003898000334.88
Accrued liabilities15,957,00018,154,000(2197000)(12.10)
Other current liabilities26,000(26000)(100.00)
Total current liabilities71,818,00062,300,000951800015.28
Non-current liabilities
Long-term debt38,394,00044,070,000(5676000)(12.88)
Capital leases3,023,0003,009,000140000.47
Deferred taxes liabilities7,613,0007,862,000(249000)(3.17)
Minority interest5,395,0004,446,00094900021.35
Other long-term liabilities519,000404,00011500028.47
Total non-current
liabilities54,944,00059,791,000(4847000)(8.11)
Total liabilities126,762,000122,091,00046710003.83
Stockholders' equity
Common stock332,000342,000(10000)(2.92)
Additional paid-in capital3,620,0003,692,000(72000)(1.95)
Retained earnings72,978,00068,691,00042870006.24
Accumulated other comprehensive
income(587,000)(1,410,000)823000(58.37)
Total stockholders' equity76,343,00071,315,00050280007.05
Total liabilities and stockholders'
equity203,105,000193,406,00096990005.01
Horizontal Analysis
WAL-MART STORES INC (WMT) BALANCE SHEET
Fiscal year ends in January.Current Year/BasePrior Year/Base
Assets
Current assets
Cash
Cash and cash equivalents105.22%88.57%
Total cash105.22%88.57%
Receivables132.99%116.66%
Inventories120.61%112.10%
Prepaid expenses53.65%56.93%
Other current assets0.00%67.94%
Total current assets115.51%105.94%
Non-current assets
Property, plant and equipment
Land105.03%96.36%
Fixtures and equipment106.88%102.52%
Other properties114.79%107.07%
Property and equipment, at cost111.16%104.17%
Accumulated Depreciation118.09%104.30%
Property, plant and equipment, net108.16%104.12%
Goodwill122.28%123.19%
Other long-term assets145.00%132.14%
Total non-current assets111.18%107.50%
Total assets112.42%107.05%
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt217.94%105.91%
Capital leases97.32%97.02%
Accounts payable113.48%109.09%
Taxes payable3224.20%741.40%
Accrued liabilities85.33%97.08%
Other current liabilities0.00%55.32%
Total current liabilities122.80%106.52%
Non-current liabilities
Long-term debt94.35%108.30%
Capital leases95.97%95.52%
Deferred taxes liabilities113.93%117.66%
Minority interest199.45%164.36%
Other long-term liabilities127.21%99.02%
Total non-current liabilities102.44%111.47%
Total liabilities113.06%108.89%
Stockholders' equity
Common stock0.00%0.00%
Additional paid-in capital101.20%103.21%
Retained earnings114.09%107.39%
Accumulated other comprehensive income(58.82%)(141.28%)
Total stockholders' equity111.38%104.05%
Total liabilities and stockholders' equity112.42%107.05%
Balance sheet AnalysisThe vertical, horizontal and year to year
change analysis of the balance sheet of Walmart shows that the
companys current assets for the current year has increased from the
previous year with a significant increase in cash and account
receivables. The company has also invested in long-term assets in
the current year. Though the company got rid of some of its current
liabilities from the previous year, its short-term debt has
increased by more than 100%. The company has also been successful
in paying off a significant portion of its long-term debt. Though
the increase in cash indicates profitability, a persistent increase
in cash also indicates that the company is unable to make the most
of its cash in hand. Therefore, the company should watch its cash
in hand closely. The company also needs to revisit its credit
policies to ensure that it does not have a lot of money stuck in
account receivables. There has been a slight drop in the goodwill
of the company from the previous year, which indicates a loss of
confidence of the shareholders in the company. The companys
short-term liabilities have increased by more than 12%. It has a
significant investment in Land and other long-term assets. The
companys retained earnings form a major part of their equity. The
company has been very successful in keeping a balance between its
debt and equity financing. SECTION 3: INCOME STATEMENT Vertical
Analysis
WAL-MART STORES INC (WMT) INCOME STATEMENT
Fiscal year ends in January2013-01%2012-01%2011-01%
Revenue469,162,000100.00%446,950,000100.00%421,849,000100.00%
Cost of
revenue352,488,00075.13%335,127,00074.98%315,287,00074.74%
Gross
profit116,674,00024.87%111,823,00025.02%106,562,00025.26%
Operating expenses
Sales, General and
administrative88,873,00018.94%85,265,00019.08%81,020,00019.21%
Total operating
expenses88,873,00018.94%85,265,00019.08%81,020,00019.21%
Operating
income27,801,0005.93%26,558,0005.94%25,542,0006.05%
Interest Expense2,251,0000.48%2,322,0000.52%2,205,0000.52%
Other income (expense)187,0000.04%162,0000.04%201,0000.05%
Income before income
taxes25,737,0005.49%24,398,0005.46%23,538,0005.58%
Provision for income
taxes7,981,0001.70%7,944,0001.78%7,579,0001.80%
Minority interest757,0000.16%688,0000.15%604,0000.14%
Other income757,0000.16%688,0000.15%604,0000.14%
Net income from continuing
operations17,756,0003.78%16,454,0003.68%15,959,0003.78%
Net income from discontinuing ops-67,000-0.01%1,034,0000.25%
Other-757,000-0.16%-688,000-0.15%-604,000-0.14%
Net income16,999,0003.62%15,699,0003.51%16,389,0003.89%
Year to Year Change
WAL-MART STORES INC (WMT) INCOME STATEMENT
Fiscal year ends in January2013-012012-01+/- $%2011-01+/- $%
Revenue469,162,000446,950,00022,212,0004.97421,849,00047,313,00011.22
Cost of
revenue352,488,000335,127,00017,361,0005.18315,287,00037,201,00011.80
Gross
profit116,674,000111,823,0004,851,0004.34106,562,00010,112,0009.49
Operating expenses
Sales, General and administrative88,873,00085,265,000
3,608,000
4.2381,020,0007,853,0009.69
Total operating
expenses88,873,00085,265,00036080004.2381,020,0007,853,0009.69
Operating
income27,801,00026,558,0001,243,0004.6825,542,0002,259,0008.84
Interest
Expense2,251,0002,322,000(71,000)(3.06)2,205,00046,0002.09
Other income
(expense)187,000162,00025,00015.43201,000(14,000)(6.97)
Income before income
taxes25,737,00024,398,0001,339,0005.4923,538,0002,199,0009.34
Provision for income
taxes7,981,0007,944,00037,0000.477,579,000402,0005.30
Minority interest757,000688,0006900010.03604,000153,00025.33
Other income757,000688,0006900010.03604,000153,00025.33
Net income from continuing
operations17,756,00016,454,00013020007.9115,959,0001,797,00011.26
Net income from discontinuing
ops(67,000)67000(100.00)1,034,000(1,034,000)(100.00)
Other(757,000)(688,000)(69000)10.03(604,000)(153,000)25.33
Net
income16,999,00015,699,00013000008.2816,389,000610,0003.72
Horizontal Analysis
WAL-MART STORES INC (WMT) INCOME STATEMENT
Fiscal year ends in JanuaryCurrent Year/BasePrior Year/BaseTwo
Years ago/Base
Revenue111.22%105.95%100.00%
Cost of revenue111.80%106.29%100.00%
Gross profit109.49%104.94%100.00%
Operating expenses
Sales, General and administrative109.69%105.24%100.00%
Total operating expenses109.69%105.24%100.00%
Operating income108.84%103.98%100.00%
Interest Expense102.09%105.31%100.00%
Other income (expense)93.03%80.60%100.00%
Income before income taxes109.34%103.65%100.00%
Provision for income taxes105.30%104.82%100.00%
Minority interest125.33%113.91%100.00%
Other income125.33%113.91%100.00%
Net income from continuing operations111.26%103.10%100.00%
Net income from discontinuing ops0.00%(6.48%)100.00%
Other125.33%113.91%100.00%
Net income103.72%95.79%100.00%
Income Statement AnalysisAmong the items to consider:1. The
money a business makes from its products and services is considered
the company's Total Revenue. Wal-Mart Stores Inc.'s net sales
increased from 2011 to 2012 and from 2012 to 20131. Cost of revenue
taken out from Sales revenue gives the Gross Profit. Total revenue
and Cost of revenue both were observed to increase over years.
Wal-Mart Stores Inc.'s Gross Profit increased from 2011 to 2012 and
from 2012 to 20131. Income taxes are excluded from the Business
Total income which is calculated as the Net income. Wal-Mart Stores
Inc.'s Net income decreased from 2011 to 2012 as the net income
from discontinued ops was in loss and increased from 2012 to 20131.
Operating Income divided by the total revenue gives the Profit
margin. It means that means that a company can deliver merchandise
or services to customers at much cheaper prices than competitors
and still make money. Wal-Mart Stores Inc.'s Profit margin
increased from 2011 to 2012 and from 2012 to 2013.1. Revenues are
calculated as the total amount made by the sales in that annual
period where as Expenses are calculated as the total amount used to
make those products. According to the Income sheet walmarts revenue
and expenses have a positive increased from 2011 to 2013. This
implies walmart sold more products within the same period of time
than their previous year1. Discontinued Operations - there was a
positive Net income from discontinued operations in 2011,which
turned into loss in 2012. This improved in 2013 where is there was
no positive net income but did not run into loss either. This
implies that walmart made income by discontinuing some operations
in 2011 but could not achieve the same continuing forward in the
future years.Extraordinary items - There are no Extra-ordinary
items in the income statement.Changes in the accounting policy -
EBITDA increased from 2011 to 2013 each year. There are no good or
bad EBITDA numbers. Any positive number implies the company has
profits. The income sheet implies that walmart has profitability
improved every year from 2011 to 2013.
SECTION 4: RATIO ANALYSISCompute the ratios for the most current
year in following categories. The calculations used to determine
the answers for the ratio analysis must be included in the
appendix. Liquidity Ratios
FormulaRatio
Current RatioCurrent assets/current liabilities 0.83
Acid (Quick) Ratio(Cash equivalent+marketable securities+net
receivable)/ current liabilities 0.20
Working CapitalCurrent assets- current liabilities (11,878)
Cash Ratio(cash equivalents+marketable securities)/ current
liabilities 0.11
Days Sales in ReceivablesGross receivable/(net sales/365)5.3
Accounts Receivable TurnoverNet Sales/Average Gross Receivables
68.87
Accounts Receivable Turnover in DaysAverage Gross
Receivables/(Net Sales/ 365) 5 days
Days Sales in InventoryEnding Inventory/(Cost of Goods
Sold/365)45.3578
Inventory TurnoverCost Of Goods Sold/ Average Inventory
10.64
Inventory Turnover in DaysAverage Inventory / (Cost of Goods
Sold/365) 34 days
Operating CycleAccount Receivable Turnover in Days+ Inventory
Turnover in Days 39 days
Sales to Working CapitalSales/ Average Working Capital
-48.54
Operating Cash Flow to Current Maturities of Long-term Debt and
Current Notes PayableOperating Cash Flow/ Current Maturities of
Long Term Debt and Current Notes PayableNo debt payable within one
year
Long-Term Debt Paying Ability
FormulaRatio
Times Interest Earned Recurring Earnings, Excluding Interest
Expense, Tax Expense, Equity Earnings and Non-controlling Earnings
Interest Expense, Including Capitalized Interest 12.43
Debt Ratio Total Liabilities / Total Assets 0.62
Debt / Equity Ratio Total Liabilities / Shareholders Equity
1.65
Debt to Tangible Net Worth Ratio Total Liabilities (Shareholders
Equity Intangible Assets) 1.65
Operating Cash Flow / Total Debt 0.47
Profitability Ratios
FormulaRatio
Net Profit MarginNet Income Before Non-Controlling Interests,
Equity Income and Non recurring Items / Net Sales3.62
Total Asset turnoverNet Sales/ Average Total
Sales469162000/458055000=1.0242
Return on AssetsNet Income Before Non-Controlling Interests and
Non- Recurring Items/ Average Total Assets8.57
Sales to Fixed AssetsNet Sales/ Average Fixed Assets (exclude
Construction in progress)469162000/57457000=8.1654
Return on Investment Net Income Before Non Controlling Interest
& Non Recurring Items + {(Interest Expense) + (1- Tax Rate)} /
Avg (Long term Liabilities + Equity) 18.2%
Return on Total Equity Net Income Before Non recurring Items -
Dividend on Redeemable Preferred Stocks / Avg Total Equity
22.27
Return on Common Equity
Gross Profit Margin Gross Profit / Net Sales 24.38
Investor Ratios
FormulaRatio
Degree of Financial LeverageEarnings Before Interests and Taxes/
Earning Before Tax27988000/25737000=0.9709
EPS - Basic( Net Income- Preferred Dividends)/ Weighted Average
Number of Common Shares Outstanding5.04
EPS - Diluted(Operating Cash Flow- Preferred Dividends)/ Diluted
Weighted Average Common Shares Outstanding5.02
Price / Earnings RatioMarket Price Per Share/ Diluted Earning
Per Share, before non-returning items14.48
Percentage of Earnings Retained(Net Income before non-returning
Items All Dividends)/ Net Income Before Non-returning Items
Dividend PayoutDividends Per Common Share/Diluted Earning Per
Share Before Non-returning Items1.59
Dividend YieldDividends Per Common Share/ Market Price Per
Common Share
Book Value( Total Shareholders Equity-Preferred Stock Equity)/
Number of Common Shares Outstanding23.04
Operating Cash Flow / Cash DividendsOperating Cash Flow/Cash
Dividends25591000/1.59=16094968.55
ANALYSIS FOR LIQUIDITY RATIOS
Liquidity Ratios & Long term Debt Paying Ratios In the above
table, we are measuring the liquidity & Long term Debt Ratio.
Those latter are measuring the ability of our company to pay-off
its short-term debt obligations & Long term Debt paying ability
of the company By comparing the companys liquid assets and its
liabilities, the greater the liquid assets compared to short term
& Long term debt liabilities the better because it shows that
the company can pay its debts that are due. Nevertheless, when the
opposite happen, the company will have difficulties meeting its
obligation and that is a bad sign for investors Our corporation is
in a good stand point, as the assets exceed liabilities, meaning
that the company will be able to pay off debt that are due now and
the ones that are upcoming in the future Testing a companys
liquidity & Long Term Debt ratio is the primary step for
investors in analyzing a company. The firms personnel use this
information to compare the firm to its competitors and allow them
to implement changes within the industryPROFITABILITY RATIOS:
In the table above, we are discussing the profitability ratios,
which is the businesss ability to generate earnings and comparing
them to the expenses. Every firm is concerned about its
profitability ratio. The profitability helps us determine the
companys bottom line and its return to investors. It also shows the
overall efficiency and performance of the company. Looking at the
net profit margin, we can say that 3.62 cents of every dollar is a
profit and that is pretty fair for our corporation. Users of this
information are company managers and owners because they are the
ones looking at the firms ability to transform sales dollars into
profit. INVESTORS RATIOS
In this category we are measuring the investors ratios which are
very important to consider when you want to invest in any company.
Investors should look closely into this category in order to know
if the company is paying dividends, how much earning per share will
they get, and how sensitive is the company to those earnings per
share. In our case, the Walmart Company is standing in a fair
position. We can tell that from the degree in financial leverage
that for every 1% change in operating income. EPS should change by
0.98% and that is fair for the company. As far as dividends,
Walmart is paying high dividends compared to its competitors and it
continues to raise every year. Investors are the main users of this
information because they are concerned about how much money they
will get per share if they invest in this certain corporation.
SECTION 5: CONCLUSIONS/RECOMMENDATIONSWalmart should build some
alliances and strategic joint ventures with other global retail
companies in order to expand itself at the international front,
enhance penetration into the global market and withstand the
cultural shocks not coming in between the path to success.From the
financial analysis that the account receivables are very high, we
recommend that the company should revisit its credit policy. The
company should ensure that its credit policy is not too lenient
since it might in order to not have a lot of cash stuck in
receivables. The company should be able to ensure that their
accounts receivables turnover is quicker. We recommend Walmart
should stick with its current policies and strategies for the
continued best rewards it is reaping. Walmart needs to maintain
consistency in its operations so that there are no significant
changes in their statements across the years.
Appendix
Liquidity Ratios Current ratio = Current assets Current
liabilities= 59,940 71,818 = 0.83 Quick ratio = Total quick assets
Current liabilities= 14,549 71,818 = 0.20 Working Capital = Current
Assets Current Liabilities= 59,940 71,818 = (11,878) Cash ratio =
Total cash assets Current liabilities= 7,781 71,818 = 0.11 Days
Sales in Receivables = (Gross receivables* 365) Net sales =
6768/(466114/365) = 5.3 Accounts Receivable Turnover = Net Sales
Avg Gross Receivables= 466,114 6768 = 68.87 Accounts Receivables
Turnover in Days = Avg Gross Receivables * 365 Net Sales=6768* 365
466114 = 5 Days Sales in Inventory = (Ending Inventory * 365) /
Cost Of Goods Sold= 43803000/(352488000/365) = 45.3578 Inventory
turnover = Net sales Inventories= 466,114 43,803 = 10.64 Average
inventory processing period = 365 Inventory turnover= 365 10.64 =
34 Operating cycle = Average inventory processing period + Average
receivable collection period= 34 + 5 = 39 Sales to Working Capital
= Sales Avg Working Capital= 466,114 {(-11,878) + (-7325)}/2 =
-48.54Long-Term Debt-Paying Ability Ratios Times Interest Earned =
Recurring Earnings, Excluding Interest Expense, Tax Expense, Equity
Earnings and Non-controlling Earnings Interest Expense, Including
Capitalized Interest.= 27,988 2,251 = 12.43 Debt Ratio = Total
Liabilities Total Assets= 126,243 203,105 = 0.62 Debt / Equity
Ratio = Total Liabilities Shareholders Equity= 126,243 76,343 =
1.65 Debt to Tangible Net Worth Ratio = Total Liabilities
(Shareholders Equity Intangible Assets)= 126,243 (76,343 0) = 1.65
Operating Cash Flow / Total Debt = 25591 / 54136 = 0.47
Profitability Gross profit margin = 100 Gross profit Net sales=
113,626 466,114 = 24.38 ROE = Net Income Before Non recurring Items
- Dividend on Redeemable Preferred Stocks / Avg Total Equity=
16,999 76,343 = 22.27 Return on Investment = Net Income Before Non
Controlling Interest & Non Recurring Items + {(Interest
Expense) + (1- Tax Rate)} / Avg (Long term Liabilities + Equity=
39,091 / 215,016 = 18.2%