AMAZON.COM, INC.

Traditional Balance Sheet

Period Ending 12/31/2015 12/31/2016 12/31/2017 12/31/2018

Assets
Current Assets
Cash and cash equivalents 15,890 19,334 20,522 31,750
Marketable Securities 3,918 6,647 10,464 9,500
Accounts receivables, net and other 5,654 8,339 13,164 16,677
Inventories 10,243 11,461 16,047 17,174
Total Current Assets 35,705 45,781 60,197 75,101
Property and Equipment, net 21,838 29,114 48,866 61,797
Goodwill 3,759 3,784 13,350 14,548
Other assets 3,445 4,723 8,897 11,202
Total Assets 64,747 83,402 131,310 162,648

Liabilities
Current Liabilities
Accounts Payable 20,397 25,309 34,616 38,192
Accrued Expenses and Other 1
10,372 13,739 18,170 23,663
Unearned Revenue 3,118 4,768 5,097 6,536
Total Current Liabilities 33,887 43,816 57,883 68,391
Long Term Debt 8,227 7,694 24,743 23,495
Other Long Term Liabilities2 9,249 12,607 20,975 27,213
Total Liabilities 51,363 64,117 103,601 119,099

Stockholders' Equity
Common Stock 5 5 5 5
Retained Earnings 2,545 4,916 8,636 19,625
Treasury Stock, at cost (1,837) (1,837) (1,837) (1,837)
Additional paid in capital 13,394 17,186 21,389 26,791
Accumulated other comprehensive loss (723) (985) (484) (1,035)
Total Stockholders' Equity 13,384 19,285 27,709 43,549

Total Liabilities and Stockholder Equity 64,747 83,402 131,310 162,648

- - - -
Key for reformulated abbreviations:
OA - Operating Assets1
OL - Operating Liabilities
NOA - Net Operating Assets

FO - Financial Obligations
FA - Financial Assets
NFO - Net Financial Obligations
CSE - Common Stockholders Equity
IC - Invested Capital

Includes unredeemed gift cards, payroll, return allowances, and other operating liabilities ("Operating"), and current debt, curre
1

Breakdown of calculations for Accrued Expenses and Other for period ending 12/31/2018, can be found in AMZN 2018 10K:
 Breakdown of calculations for Accrued Expenses and Other for period ending 12/31/2018, can be found in AMZN 2018 10K:
Breakdown of calculations for Accrued Expenses and Other for period ending 12/31/2017, can be found in AMZN 2017 10K:
Breakdown of calculations for Accrued Expenses and Other for period ending 12/31/2017, can be found in AMZN 2017 10K:
Breakdown of calculations for Accrued Expenses and Other for period ending 12/31/2016, can be found in AMZN 2016 10K:
Breakdown of calculations for Accrued Expenses and Other for period ending 12/31/2016, can be found in AMZN 2016 10K:
Breakdown of calculations for Accrued Expenses and Other for period ending 12/31/2015, can be found in AMZN 2015 10K:
Breakdown of calculations for Accrued Expenses and Other for period ending 12/31/2015, can be found in AMZN 2015 10K:

Includes capital, finance, and construction lease liabilities ("Financing"), and tax contingency, long-term deferred tax liabilities a
2

Breakdown of calculations for Other Long Term Liabilities for period ending 12/31/2018, can be found in AMZN 2018 10K: Ot
Breakdown of calculations for Other Long Term Liabilities for period ending 12/31/2018, can be found in AMZN 2018 10K: Ot
Breakdown of calculations for Other Long Term Liabilities for period ending 12/31/2017, can be found in AMZN 2017 10K: Ot
Breakdown of calculations for Other Long Term Liabilities for period ending 12/31/2017, can be found in AMZN 2017 10K: Ot
Breakdown of calculations for Other Long Term Liabilities for period ending 12/31/2016, can be found in AMZN 2016 10K: Ot
Breakdown of calculations for Other Long Term Liabilities for period ending 12/31/2016, can be found in AMZN 2016 10K: Ot
Breakdown of calculations for Other Long Term Liabilities for period ending 12/31/2015, can be found in AMZN 2016 10K: Ot
Breakdown of calculations for Other Long Term Liabilities for period ending 12/31/2015, can be found in AMZN 2015 10K: Ot
 Allocate line item amounts from the Balance Sheet on the left into the cells on the right. Only manipulate cel
have been conditionally formatted to highlight red if the row does not balance.

Reformulated Balance Sheet

12/31/2015 ### 12/31/2016 ###
Operating Financing Operating Financing

- 15,890### - 19,334
- 3,918### - 6,647
5,654 -### 8,339 -
10,243 -### 11,461 -
15,897 19,808 19,800 25,981
21,838 - 29,114 -
3,759 - 3,784 -
3,445 - 4,723 -
44,939 19,808 57,421 25,981

20,397 - 25,309 -
7,008 3,364 8,542 5,197
3,118 - 4,768 -
30,523 3,364 38,619 5,197
- 8,227 - 7,694
2,923 6,326 4,374 8,233
33,446 17,917 42,993 21,124

- 5
- 2,545
- (1,837)
- 13,394
- (723)
- 13,384
- 5
- 4,916
- (1,837)
- 17,186
- (985)
- 19,285

33,446 31,301 42,993 40,409

OA 44,939 OA 57,421 OA
OL (33,446) OL (42,993) OL
NOA 11,493 NOA 14,428 NOA

FO 17,917 FO 21,124 FO
FA (19,808) FA (25,981) FA
NFO (1,891) NFO (4,857) NFO
CSE 13,384 CSE 19,285 CSE
IC 11,493 IC 14,428 IC

g"), and current debt, current capital and finance leases and other non-operating obligations ("Financing"). See footnotes 5, 6, and 7 of the 2
ound in AMZN 2018 10K: Accrued Expenses and Other under Financing: 9,502 = (Current Portion of Long-term Debt, Note 5, Debt)
ound in AMZN 2018 10K: Accrued Expenses and Other under Operating: 14,161 = 23,663 - 9,502
ound in AMZN 2017 10K: Accrued Expenses and Other under Financing: 6,221 = (Current Portion of Long-term Debt, Note 5, Debt)
ound in AMZN 2017 10K: Accrued Expenses and Other under Operating: 11,949= 18,170 - 6,221
ound in AMZN 2016 10K: Accrued Expenses and Other under Financing: 5,197= (Current Portion of Long-term Debt, Note 5, Debt)
ound in AMZN 2016 10K: Accrued Expenses and Other under Operating: 8,542= 13,739 - 5,197
ound in AMZN 2015 10K: Accrued Expenses and Other under Financing: 3,364 = (Current Portion of Long-term Debt, Note 5, Debt)
ound in AMZN 2015 10K: Accrued Expenses and Other under Operating: 7,008 = 10,372 - 3,364

rm deferred tax liabilities and other liabilities ("Operating"). See footnote 6 of the 2018 10-K for a discussion of these amounts.
nd in AMZN 2018 10K: Other Long Term Liabilities under Operating: 8,405 = (Tax Contingencies, Note 6, other long-term liabilities)
nd in AMZN 2018 10K: Other Long Term Liabilities under Financing: 18,808 = 27,213 - 8,405
nd in AMZN 2017 10K: Other Long Term Liabilities under Operating: 6,442 = (Tax Contingencies, Note 6, other long-term liabilities)
nd in AMZN 2017 10K: Other Long Term Liabilities under Financing: 14,533 = 20,975 - 6,442
nd in AMZN 2016 10K: Other Long Term Liabilities under Operating: 4,374 = (Tax Contingencies, Note 6, other long-term liabilities)
nd in AMZN 2016 10K: Other Long Term Liabilities under Financing: 8,233 = 12,607- 4,374
nd in AMZN 2016 10K: Other Long Term Liabilities under Operating: 2,923 = (Tax Contingencies, Note 6, other long-term liabilities)
nd in AMZN 2015 10K: Other Long Term Liabilities under Financing: 6,326 = 9,249 - 2,923
 s on the right. Only manipulate cells highlighted in yellow. Columns N, S, X, and AA
ance.

ulated Balance Sheet

12/31/2017 12/31/2018 ###
Operating Financing Operating Financing

- 20,522 - 31,750
- 10,464### - 9,500
###
13,164 -### 16,677 -###
16,047 -### 17,174 -###
29,211 30,986 33,851 41,250
48,866 - 61,797 -
13,350 - 14,548 -
8,897 - 11,202 -
100,324 30,986 121,398 41,250

34,616 - 38,192 -
11,949 6,221 14,161 9,502
5,097 - 6,536 -
51,662 6,221 58,889 9,502
- 24,743 - 23,495
6,442 14,533 8,405 18,808
58,104 45,497 67,294 51,805

- 5 - 5
- 8,636 - 19,625
- (1,837) - (1,837)
- 21,389 - 26,791
- (484) - (1,035)
- 27,709 - 43,549

58,104 73,206 67,294 95,354

100,324 OA 121,398
(58,104) OL (67,294)
42,220 NOA 54,104

45,497 FO 51,805
(30,986) FA (41,250)
14,511 NFO 10,555
27,709 CSE 43,549
42,220 IC 54,104

g"). See footnotes 5, 6, and 7 of the 2018 10-K for a discussion of these amounts.
Long-term Debt, Note 5, Debt) 1,371+(Current Capital Lease Obligations, Note 6, other long-term liabilities) 7,720 + (Current Finance Lease
Long-term Debt, Note 5, Debt) 100+(Current Capital Lease Obligations, Note 6, other long-term liabilities) 5,839+ (Current Finance Lease O

ong-term Debt, Note 5, Debt) 1,056+(Current Capital Lease Obligations, Note 6, other long-term liabilities) 3,997+ (Current Finance Lease

Long-term Debt, Note 5, Debt) 238+(Current Capital Lease Obligations, Note 6, other long-term liabilities) 3,027+ (Current Finance Lease O

ussion of these amounts.

e 6, other long-term liabilities) 896+(Long-term Deferred Tax Liabilities, Note 6, other long-term liabilities) 1,490 + (Other, Note 6, other long

e 6, other long-term liabilities) 1,004+(Long-term Deferred Tax Liabilities, Note 6, other long-term liabilities) 990+ (Other, Note 6, other long-

e 6, other long-term liabilities) 1,395 +(Long-term Deferred Tax Liabilities, Note 6, other long-term liabilities) 392 + (Other, Note 6, other long

e 6, other long-term liabilities) 932 + (Long-term Deferred Tax Liabilities, Note 6, other long-term liabilities) 407 + (Other, Note 6, other long-
) 7,720 + (Current Finance Lease Obligations, Note 6, other long-term liabilities) 411
5,839+ (Current Finance Lease Obligations, Note 6, other long-term liabilities) 282

3,997+ (Current Finance Lease Obligations, Note 6, other long-term liabilities) 144

3,027+ (Current Finance Lease Obligations, Note 6, other long-term liabilities) 99

,490 + (Other, Note 6, other long-term liabilities) 6,019

990+ (Other, Note 6, other long-term liabilities) 4,448

) 392 + (Other, Note 6, other long-term liabilities) 2,587

407 + (Other, Note 6, other long-term liabilities) 1,584

AMAZON.COM, INC.

Traditional Income Statement

Period Ending 12/31/2015 12/31/2016 12/31/2017

Total Revenue 107,006 135,987 177,866

Cost of Revenue 71,651 88,265 111,934
Gross Profit 35,355 47,722 65,932

Operating Expenses
Fulfillment 13,410 17,619 25,249
Marketing 5,254 7,233 10,069
Technology and Content 12,540 16,085 22,620
General and Administrative 1,747 2,432 3,674
Other Operating Expense, net 171 167 214
Total Operating Expenses 33,122 43,536 61,826

Operating Income 2,233 4,186 4,106

Other Income (Expenses) Net (256) 90 346

Earnings Before Interest And Taxes 1,977 4,276 4,452
Interest Expense (459) (484) (848)
Interest Income 50 100 202
Income Before Income Taxes 1,568 3,892 3,806
Provision for Income Taxes 950 1,425 769
Net Income From Continuing Ops 618 2,467 3,037

Equity-Method Investment Activity, net of tax (22) (96) (4)

Net Income 596 2,371 3,033

Effective tax rate 61% 37% 20%

 Allocate line item amounts from the Income Statement on the left into the cells on the ri
highlight red if the row does not balance.

ement Ref
12/31/2018 12/31/2015 12/31/2016
Operating Financing Operating
232,887 107,006 - 135,987
139,156 71,651 - 88,265
93,731 35,355 - 47,722

34,027 13,410 - 17,619

13,814 5,254 - 7,233
28,837 12,540 - 16,085
4,336 1,747 - 2,432
296 171 - 167
81,310 33,122 - 43,536

12,421 2,233 - 4,186

(183) (256) - 90
12,238 1,977 - 4,276
(1,417) - (459) -
440 50
11,261 1,977 (409) 4,276
1,197 1,198 (248) 1,566
10,064 779 (161) 2,710

9 (22) - (96)
10,073 NOPAT 757 FI (161) NOPAT 2,614

Key for Reformulated abbreviations:

NOPAT - Net Operating Profit After Tax
FI - Financial Income

11%
the left into the cells on the right. Only manipulate cells highlighted in yellow. Columns N, S, X, and AA have been conditionally fo

Reformulated Income Statement

12/31/2016 12/31/2017 12/31/2018
Financing Operating Financing Operating
- 177,866 - 232,887
- 111,934 - 139,156
- 65,932 - 93,731

- 25,249 - 34,027
- 10,069 - 13,814
- 22,620 - 28,837
- 3,674 - 4,336
- 214 - 296
- 61,826 - 81,310

- 4,106 - 12,421

- 346 - (183)
- 4,452 - 12,238
(484) - (848) -
100 202
(384) 4,452 (646) 12,238
(141) 900 (131) 1,301
(243) 3,552 (515) 10,937

- (4) - 9
FI (243) NOPAT 3,548 FI (515) NOPAT 10,946
ve been conditionally formatted to

12/31/2018
Financing
-
-
-

-
-
-
-
-
-

-
-
(1,417)
440
(977)
(104)
(873)

-
FI (873)
WALMART, INC.

Traditional Balance Sheet

Period Ending 1/31/2016 1/31/2017

Assets
Current Assets
Cash And Cash Equivalents 8,705 6,867
Receivables, net 5,624 5,835
Inventories 44,469 43,046
Prepaid Expenses And Other 1,441 1,941
Total Current Assets 60,239 57,689
Property and Equipment, net 110,171 107,710
###
Goodwill 16,695 17,037
Property under capital lease and financing obligations, net 6,345 6,468
Other Long-term Assets 6,131 9,921
Total Assets 199,581 198,825

Liabilities
Current Liabilities
Accounts Payable 38,487 41,433
Accrued Liabilities 19,607 20,654
Short-term Borrowings 2,708 1,099
Long-term Debt Due within One Year 2,745 2,256
Accrued Income Taxes 521 921
Capital Lease and Financing Obligations due within One Year 551 565
Total Current Liabilities 64,619 66,928
Long Term Debt 38,214 36,015
Long Term capital lease and financing obligations 5,816 6,003
Deferred income taxes and other 7,321 9,344
Total Liabilities 115,970 118,290

Stockholders' Equity
Common Stock 317 305
Retained Earnings 90,021 89,354
Capital in Excess of Par Value 1,805 2,371
Accumulated Other Comprehensive Loss (11,597) (14,232)
Total Stockholders' Equity 80,546 77,798

Noncontrolling Interest 3,065 2,737

Total Liabilities and Stockholder Equity 199,581 198,825

Key for reformulated abbreviations:

OA - Operating Assets1
OL - Operating Liabilities
NOA - Net Operating Assets

FO - Financial Obligations
FA - Financial Assets
NFO - Net Financial Obligations
CSE - Common Stockholders Equity
IC - Invested Capital
aditional Balance Sheet Reformulate
1/31/2018 1/31/2019 1/31/2016 ### 1/31/2017
Operating Financing Operating

6,756 7,722 - 8,705### -

5,614 6,283 5,624 -### 5,835
43,783 44,269 44,469 -### 43,046
3,511 3,623 1,441 -### 1,941
59,664 61,897 51,534 8,705 50,822
107,675 104,317 110,171 - 107,710
18,242 31,181 16,695 - 17,037
7,143 7,078 6,345 - 6,468
11,798 14,822 6,131 - 9,921
204,522 219,295 190,876 8,705 191,958

46,092 47,060 38,487 - 41,433

22,122 22,159 19,607 - 20,654
5,257 5,225 - 2,708 -
3,738 1,876 - 2,745 -
645 428 521 - 921
667 729 - 551 -
78,521 77,477 58,615 6,004 63,008
30,045 43,520 - 38,214 -
6,780 6,683 - 5,816 -
8,354 11,981 7,321 - 9,344
123,700 139,661 65,936 50,034 72,352

295 288 - 317 -

85,107 80,785 - 90,021 -
2,648 2,965 - 1,805 -
(10,181) (11,542) - (11,597) -
77,869 72,496 - 80,546 -

2,953 7,138 - 3,065 -

204,522 219,295 65,936 133,645 72,352

r reformulated abbreviations:
perating Assets1 OA 190,876 OA 191,958
perating Liabilities OL (65,936) OL (72,352)
Net Operating Assets NOA 124,940 NOA 119,606

nancial Obligations FO 53,099 FO 48,675

nancial Assets FA (8,705) FA (6,867)
 Net Financial Obligations NFO 44,394 NFO 41,808
Common Stockholders Equity CSE 80,546 CSE 77,798
vested Capital IC 124,940 IC 119,606
 Reformulated Balance Sheet
1/31/2017 ### 1/31/2018 ### 1/31/2019 ###
Financing Operating Financing Operating Financing

6,867 - 6,756 - 7,722

- 5,614 -### 6,283 -###
- 43,783 -### 44,269 -###
- 3,511 -### 3,623 -###
6,867 52,908 6,756 54,175 7,722
- 107,675 - 104,317 -
- 18,242 - 31,181 -
- 7,143 - 7,078 -
- 11,798 - 14,822 -
6,867 197,766 6,756 211,573 7,722

- 46,092 - 47,060 -
- 22,122 - 22,159 -
1,099 - 5,257 - 5,225
2,256 - 3,738 - 1,876
- 645 - 428 -
565 - 667 - 729
3,920 68,859 9,662 69,647 7,830
36,015 - 30,045 - 43,520
6,003 - 6,780 - 6,683
- 8,354 - 11,981 -
45,938 77,213 46,487 81,628 58,033

305 - 295 - 288

89,354 - 85,107 - 80,785
2,371 - 2,648 - 2,965
(14,232) - (10,181) - (11,542)
77,798 - 77,869 - 72,496

2,737 - 2,953 - 7,138

126,473 77,213 127,309 81,628 137,667

OA 197,766 OA 211,573
OL (77,213) OL (81,628)
NOA 120,553 NOA 129,945

FO 49,440 FO 65,171
FA (6,756) FA (7,722)
NFO 42,684 NFO 57,449
CSE 77,869 CSE 72,496
IC 120,553 IC 129,945
WALMART, INC.

Traditional Income Statement

Period Ending 1/31/2016 ### 1/31/2017 ###

Total Revenue 482,130 485,873

Cost of Sales 360,984 361,256
Gross Profit 121,146 124,617

Operating Expenses
Selling General and Administrative 97,041 101,853
Total Operating Expenses 97,041 101,853

Operating Income 24,105 22,764

Other (Gains) and Losses - -

Loss on Extinguishment of Debt - -
Earnings Before Interest And Taxes 24,105 22,764
Interest Expense (2,548) (2,367)
Interest Income 81 100
Income Before Taxes 21,638 20,497
Provision for Income Taxes 6,558 6,204
Consolidated Net Income 15,080 14,293

Consolidated Net Income Attributable to Noncontrolling Interest (386) (650)

Consolidated Net Income Attributable to Walmart 14,694 13,643

Effective tax rate 30% 30%

itional Income Statement
1/31/2018 ### 1/31/2019 1/31/2016
Operating Financing
500,343 514,405 482,130 -
373,396 385,301 360,984 -
126,947 129,104 121,146 -

106,510 107,147 97,041 -

106,510 107,147 97,041 -

20,437 21,957 24,105 -

- (8,368) - -
(3,136) - - -
17,301 13,589 24,105 -
(2,330) (2,346) - (2,548)
152 217 - 81
15,123 11,460 24,105 (2,467)
4,600 4,281 7,306 (748)
10,523 7,179 16,799 (1,719)

(661) (509) - (386)

9,862 6,670 NOPAT 16,799 FI (2,105) NOPAT

Key for reformulated abbreviations:

NOPAT - Net Operating Profit After Tax
FI - Financial Income

30% 37%
 Reformulated Income Statement
1/31/2017 1/31/2018
Operating Financing Operating Financing
485,873 - 500,343 -
361,256 - 373,396 -
124,617 - 126,947 -

101,853 - 106,510 -
101,853 - 106,510 -

22,764 - 20,437 -

- - - -
- - - (3,136)
22,764 - 20,437 (3,136)
- (2,367) - (2,330)
- 100 - 152
22,764 (2,267) 20,437 (5,314)
6,890 (686) 6,216 (1,616)
15,874 (1,581) 14,221 (3,698)

- (650) - (661)
15,874 FI (2,231) NOPAT 14,221 FI (4,359) NOPAT
 1/31/2019
Operating Financing
514,405 -
385,301 -
129,104 -

107,147 -
107,147 -

21,957 -

(8,368) -
- -
13,589 -
- (2,346)
- 217
13,589 (2,129)
5,076 (795)
8,513 (1,334)

- (509)
8,513 FI (1,843)
COMMON SIZE BALANCE SHEETS

AMAZON.COM, INC. WALMART, INC.

Dec-2015 Dec-2016 Dec-2017 Dec-2018 Jan-2016 Jan-2017 Jan-2018 Jan-2019
Cash and cash equivalents 24.5% 23.2% 15.6% 19.5% 4.4% 3.5% 3.3% 3.5%
Marketable Securities 6.1% 8.0% 8.0% 5.8% NA NA NA NA
Accounts receivable, net and other 8.7% 10.0% 10.0% 10.3% 2.8% 2.9% 2.7% 2.9%
Inventories 15.8% 13.7% 12.2% 10.6% 22.3% 21.7% 21.4% 20.2%
Prepaid Expenses and other NA NA NA NA 0.7% 1.0% 1.7% 1.7%
Total current assets 55.1% 54.9% 45.8% 46.2% 30.2% 29.0% 29.2% 28.2%
Property and Equipment, net 33.7% 34.9% 37.2% 38.0% 55.2% 54.2% 52.6% 47.6%
Goodwill 5.8% 4.5% 10.2% 8.9% 8.4% 8.6% 8.9% 14.2%
Property under capital lease and financing oblig., net NA NA NA NA 3.2% 3.3% 3.5% 3.2%
Other assets 5.3% 5.7% 6.8% 6.9% 3.1% 5.0% 5.8% 6.8%
Total assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Accounts payable 31.5% 30.3% 26.4% 23.5% 19.3% 20.8% 22.5% 21.5%
Accrued Expenses and other 16.0% 16.5% 13.8% 14.5% 9.8% 10.4% 10.8% 10.1%
Unearned Revenue 4.8% 5.7% 3.9% 4.0% NA NA NA NA
Short-term Borrowings NA NA NA NA 1.4% 0.6% 2.6% 2.4%
Long-term Debt Due within One Year NA NA NA NA 1.4% 1.1% 1.8% 0.9%
Accrued Income Taxes NA NA NA NA 0.3% 0.5% 0.3% 0.2%
Capital lease and financing oblig. due within one year NA NA NA NA 0.3% 0.3% 0.3% 0.3%
Total current liabilities 52.3% 52.5% 44.1% 42.0% 32.4% 33.7% 38.4% 35.3%
Long term debt 12.7% 9.2% 18.8% 14.4% 19.1% 18.1% 14.7% 19.8%
Long Term capital lease and financing obligations NA NA NA NA 2.9% 3.0% 3.3% 3.0%
Deferred income taxes and other NA NA NA NA 3.7% 4.7% 4.1% 5.5%
Other Long Term Liabilities 14.3% 15.1% 16.0% 16.7% NA NA NA NA
Total liabilities 79.3% 76.9% 78.9% 73.2% 58.1% 59.5% 60.5% 63.7%
Common Stock, $0.01 per share 0.0% 0.0% 0.0% 0.0% 0.2% 0.2% 0.1% 0.1%
Retained Earnings 3.9% 5.9% 6.6% 12.1% 45.1% 44.9% 41.6% 36.8%
Treasury Stock, at cost -2.8% -2.2% -1.4% -1.1% NA NA NA NA
Additional paid in capital 20.7% 20.6% 16.3% 16.5% 0.9% 1.2% 1.3% 1.4%
Accumulated other comprehensive loss -1.1% -1.2% -0.4% -0.6% -5.8% -7.2% -5.0% -5.3%
Stockholders' equity 20.7% 23.1% 21.1% 26.8% 40.4% 39.1% 38.1% 33.1%
Noncontrolling Interest NA NA NA NA 1.5% 1.4% 1.4% 3.3%
Total liabilities and stockholders' equity 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
COMMON SIZE INCOME STATEMENTS

AMAZON.COM, INC. WALMART, INC.

Dec-2015 Dec-2016 Dec-2017 Dec-2018 Jan-2016 Jan-2017 Jan-2018 Jan-2019
Net sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales 67.0% 64.9% 62.9% 59.8% 74.9% 74.4% 74.6% 74.9%
Gross margin 33.0% 35.1% 37.1% 40.2% 25.1% 25.6% 25.4% 25.1%
Fulfillment 12.5% 13.0% 14.2% 14.6% NA NA NA NA
Marketing 4.9% 5.3% 5.7% 5.9% NA NA NA NA
Technology and Content 11.7% 11.8% 12.7% 12.4% NA NA NA NA
General and Administrative 1.6% 1.8% 2.1% 1.9% NA NA NA NA
Other Operating Expense, net 0.2% 0.1% 0.1% 0.1% NA NA NA NA
SG&A NA NA NA NA 20.1% 21.0% 21.3% 20.8%
Total operating expenses 31.0% 32.0% 34.8% 34.9% 20.1% 21.0% 21.3% 20.8%
Operating profit 2.1% 3.1% 2.3% 5.3% 5.0% 4.7% 4.1% 4.3%
Interest expense -0.4% -0.4% -0.5% -0.6% -0.5% -0.5% -0.5% -0.5%
Interest income 0.0% 0.1% 0.1% 0.2% 0.0% 0.0% 0.0% 0.0%
Other income (expense) -0.2% 0.1% 0.2% -0.1% NA NA NA NA
Other (Gains) and Losses NA NA NA NA 0.0% 0.0% 0.0% -1.6%
Loss on Extinguishment of Debt NA NA NA NA 0.0% 0.0% -0.6% 0.0%
Income before Income Taxes 1.5% 2.9% 2.1% 4.8% 4.5% 4.2% 3.0% 2.2%
Provision for Income Taxes 0.9% 1.0% 0.4% 0.5% 1.4% 1.3% 0.9% 0.8%
Equity-Method Investment Activity, net of tax 0.0% -0.1% 0.0% 0.0% NA NA NA NA
Consol. Net Income Attrib. to Noncontrolling Int. NA NA NA NA -0.1% -0.1% -0.1% -0.1%
Net income 0.6% 1.7% 1.7% 4.3% 3.0% 2.8% 2.0% 1.3%
TRADITIONAL PROFITABILITY ANALYSIS FRAMEWORK DEFINITIONS

Net Income available for Common Stock The metric shareholders wish to maximize (conditional on
Return on Common Equity (ROCE) =
Average Common Shareholders' Equity risk). Affected by financial leverage.

Net Income + (1 − Tax Rate) × (Interest Expense) A measure of return on total assets of the firm, and thus
Return on Assets (ROA) =
Average Total Assets available to all capital providers. Unaffected by leverage.

Net Income + (1 − Tax Rate) × (Interest Expense) Measures ability of the firm to convert sales to profits.
Profit Margin =
Sales Typically affected by competitiveness and strategy.

Sales How many sales $ can be extracted from assets invested.

Total Asset Turnover1 =
Average Total Assets Measures effeciency of asset use.

Sales
Accounts Receivable Turnover2 = Both measures how quickly the firm collects its receivables
Average Accounts Receivable
from its customers. Faster collection means higher turnover and
fewer days. Longer times could indicate difficulty collecting or
365 strategy to extend more credit to drive sales.
Days to Collect A/R =
Accounts Receivable Turnover

Cost of Goods Sold

Inventory Turnover = Both measures how much inventory a company holds. More
Average Inventory
turnover, or fewer days, could indicate a firm with more
efficient inventory management. In contrast, more inventory is
365 consistent with broad product selection strategy.
Days in Inventory (Holding period)
Inventory Turnover

Sales A productivity measure indicating how much sales $ are

Fixed Asset Turnover =
Average Fixed Assets produced for each $ of fixed assets.

Net Income available for Common Stock Not a commonly referenced measure -- essentially included to
Common Earnings Leverage =
Net Income + (1 − Tax Rate)(Interest Expense) facilitate the math for the Dupont model.

Average Total Assets Measures the extent to which the assets are funded by
Capital Structure Leverage =
Average Common Shareholders' Equity shareholders, and conversely, by debt (or other sources).

Cost of Goods Sold

Accounts Payable Turnover = Both measures how quickly a firm pays its suppliers. Longer
Average Accounts Payable
times indicate slower payment, which can improve cash flow,
but be aware of implicit costs of extending payables (e.g.,
365 potentially higher COGS.
Accounts Payable Period (Days to Pay) =
Accounts Payable Turnover

Operating Cycle = Days to Collect A/R + Days in Inventory Measure of working capital management.

Net Trade Cycle = Operating Cycle − Days to Pay Measure of working capital mgt. considering A/P.

NOTES:
1) Multiplying the three components of Total Asset Turnover displayed in the flow chart (A/R Turnover, Inventory Turnover, and Fixed
Asset Turnover) do not equal Total Asset Turnover because turnovers of other assets, such as cash, prepaid expenses, etc., would need to
be included.

2) The definition for Accounts Receivable Turnover as given above uses total sales, however, the ideal measure is Total Credit Sales
(i.e., those sales made on credit rather than cash sales). If a company makes a significant amount of cash sales and this is not adjusted,
the Accounts Receivable ratio may overstate the company's speed of collecting credit sales. This is particularly problematic for retailers.

Adapted from J. Wahlen, S. Baginski, and M. Bradshaw, Financial Reporting, Financial Statement Analysis, and Valuation. 9th Ed.
 TRADITIONAL PROFITABILITY ANALYSIS FRAMEWORK
AMAZON.COM, INC.

FY 2017
ROCE

12.9%

Financial
ROA Leverage

3.5% 373.6%

Profit Total Asset Common Earnings Capital Structure

Margin Turnover Leverage Leverage

2.1% 1.66 81.8% 4.57

A/R Inventory Fixed Asset

Turnover Turnover Turnover

16.54 8.14 4.56

Tax rate: 20.2% <-- Assumed effective tax rate

FY 2018
ROCE

28.3%

Financial
ROA Leverage

7.7% 366.5%

Profit Total Asset Common Earnings Capital Structure

Margin Turnover Leverage Leverage

4.9% 1.58 88.8% 4.13

A/R Inventory Fixed Asset

Turnover Turnover Turnover

15.61 8.38 4.21

Tax rate: 10.6% <-- Assumed effective tax rate

 TRADITIONAL PROFITABILITY ANALYSIS FRAMEWORK
WALMART, INC.

FY 2017
ROCE

12.7%

Financial
ROA Leverage

6.0% 210.4%

Profit Total Asset Common Earnings Capital Structure

Margin Turnover Leverage Leverage

2.4% 2.48 81.2% 2.59

A/R Inventory Fixed Asset

Turnover Turnover Turnover

87.40 8.60 4.37

Tax rate: 30.4% <-- Assumed effective tax rate

FY 2018
ROCE

8.9%

Financial
ROA Leverage

4.1% 217.4%

Profit Total Asset Common Earnings Capital Structure

Margin Turnover Leverage Leverage

1.7% 2.43 77.1% 2.82

A/R Inventory Fixed Asset

Turnover Turnover Turnover

86.48 8.75 4.55

Tax rate: 37.4% <-- Assumed effective tax rate

ADVANCED PROFITABILITY ANALYSIS FRAMEWORK DEFINITIONS

Net Income available for Common Stock

Return on Common Equity (ROCE) =
Average Common Shareholders' Equity

NOPAT
Return on Invested Capital (ROIC) =
Average Net Operating Assets (NOA)

Net Operating Assets (NOA) = Operating Assets − Operating Liabilities

= Total Assets − Financial Assets − Operating Liabilities
= Invested Capital

Invested Capital (IC) = Net Financial Obligations + Common Stockholders' Equity

= Net Operating Assets

Net Operating Profit After Tax (NOPAT) = Net Income + (1 - Tax Rate) × (Financing Expense − Financing Income)
= Operating Revenues − Operating Expenses − Taxes on Operating Income

NOPAT
Profit Margin =
Sales

Sales
Net Operating Asset Turnover =
Average Net Operating Assets (NOA)

Average Net Financial Obligations (NFO)

Financial Leverage =
Average Common Shareholders' Equity

Net Financial Obligations (NFO) = Financial Obligations − Financial Assets

Financial Obligations (FO) = Debt (including Capital Leases) + Preferred Stock + Noncontrolling Interest (on balance sheet)

Spread = ROIC − Net Borrowing Cost (NBC)

(1 − Tax Rate) × (Financial Expense − Financial Income) + Preferred Dividends + Earnings attributable to Noncontrolling Interest
Net Borrowing Cost (NBC) =
Average Net Financial Obligations (NFO)

NOPAT + (1 − Tax Rate) × (Implicit Interest on average Operating liabilities )

Return on Operating Assets (ROOA) =
Average Operating Assets (OA)

Average Operating Liabilities

Operating Liability Leverage (OLLEV) =
Average Net Operating Assets (NOA)

Operating Liability Spread (OLSPREAD) = ROOA − (1 − Tax Rate) × (Short-term Borrowing Rate)

Implicit Interest = Average Operating Liabilities × Short-term Borrowing Rate

NOPAT(t) – NOPAT(t-1)
Return on New Invested Capital (RONIC(t)) =
NOA(t-1) – NOA(t-2)

NOA(t) – NOA(t-1)
Investment Rate(t) =
NOPAT(t)

NOPAT(t) – NOPAT(t-1)
Growth (g(t)) in NOPAT =
NOPAT(t-1)
= Investment Rate(t-1) × RONIC(t)

NOTES:
Tax rate: "Tax Rate" used in the formulas above typically require the marginal tax rate on financing activities. This typically means the federal corporate statutory rate for U.S. based firms.
Short-term borrowing rate: This means the rate at which the firm can borrow for very short periods of time, so the commercial paper rate typically serves as a reasonable proxy.
 ADVANCED PROFITABILITY ANALYSIS FRAMEWORK
AMAZON.COM, INC.

FY 2017
ROCE

12.9%

Financial
ROIC Leverage × Spread

12.5% 0.4%

Profit NOA Financial

Margin Turnover Leverage Spread

2.0% 6.28 20.5% 1.8%

ALTERNATIVE ROIC BREAKDOWN

ROIC ROOA OLLEV OLSPREAD

12.5% 4.8% 1.78 4.4%

Tax rate: 20.2% ← Assumed effective tax rate

Implicit interest rate: 0.5% ← Typically use short-term borrowing rate (e.g., commercial paper) as proxy

FY 2018
ROCE

28.3%

Financial
ROIC Leverage × Spread

22.7% 5.5%

Profit NOA Financial

Margin Turnover Leverage Spread

4.7% 4.84 35.2% 15.8%

ALTERNATIVE ROIC BREAKDOWN

ROIC ROOA OLLEV OLSPREAD

22.7% 10.1% 1.30 9.7%

Tax rate: 10.6% ← Assumed effective tax rate

Implicit interest rate: 0.5% ← Typically use short-term borrowing rate (e.g., commercial paper) as proxy
 ADVANCED PROFITABILITY ANALYSIS FRAMEWORK
WALMART, INC.

FY 2017
ROCE

12.7%

Financial
ROIC Leverage × Spread

11.8% 0.8%

Profit NOA Financial

Margin Turnover Leverage Spread

2.8% 4.17 54.3% 1.5%

ALTERNATIVE ROIC BREAKDOWN

ROIC ROOA OLLEV OLSPREAD

11.8% 7.4% 0.62 7.1%

Tax rate: 30.4% ← Assumed effective tax rate

Implicit interest rate: 0.5% ← Typically use short-term borrowing rate (e.g., commercial paper) as proxy

FY 2018
ROCE

8.9%

Financial
ROIC Leverage × Spread

6.8% 2.1%

Profit NOA Financial

Margin Turnover Leverage Spread

1.7% 4.11 66.6% 3.1%

ALTERNATIVE ROIC BREAKDOWN

ROIC ROOA OLLEV OLSPREAD

6.8% 4.3% 0.63 3.9%

Tax rate: 37.4% ← Assumed effective tax rate

Implicit interest rate: 0.5% ← Typically use short-term borrowing rate (e.g., commercial paper) as proxy
PROFITABILITY ANALYSIS SUMMARY

BASIC DUPONT ANALYSIS

AMAZON.COM, INC. WALMART, INC.
Dec-2016 Dec-2017 Dec-2018 Jan-2017 Jan-2018 Jan-2019
Return on Common Equity (ROCE) 14.5% 12.9% 28.3% 17.2% 12.7% 8.9%
Return on Assets (ROA) 3.7% 3.5% 7.7% 8.0% 6.0% 4.1%
Profit Margin (PM) 2.0% 2.1% 4.9% 3.3% 2.4% 1.7%
Total Asset Turnover (TAT) 1.84 1.66 1.58 2.44 2.48 2.43
Financial Leverage 3.88 3.74 3.66 2.15 2.10 2.17
Common Earnings Leverage 85.5% 81.8% 88.8% 85.6% 81.2% 77.1%
Capital Structure Leverage 4.53 4.57 4.13 2.52 2.59 2.82
Accounts Receivable Turnover 19.44 16.54 15.61 84.80 87.40 86.48
Days to Collect A/R 18.78 22.06 23.38 4.30 4.18 4.22
Inventory Turnover 8.13 8.14 8.38 8.26 8.60 8.75
Days in Inventory 44.88 44.85 43.57 44.21 42.44 41.71
Fixed Assets Turnover 5.34 4.56 4.21 4.46 4.37 4.55
Accounts Payable Turnover 3.86 3.74 3.82 9.04 8.53 8.27
Days to Pay A/P 94.50 97.70 95.49 40.37 42.78 44.12
Operating Cycle 63.66 66.91 66.95 48.52 46.61 45.93
Net Trade Cycle (30.85) (30.79) (28.53) 8.14 3.84 1.81

ADVANCED DUPONT ANALYSIS

AMAZON.COM, INC. WALMART, INC.
Dec-2016 Dec-2017 Dec-2018 Jan-2017 Jan-2018 Jan-2019
Return on Common Equity (ROCE) 14.5% 12.9% 28.3% 17.2% 12.7% 8.9%
Return on Invested Capital (ROIC) 20.2% 12.5% 22.7% 13.0% 11.8% 6.8%
Profit Margin (PM) 1.9% 2.0% 4.7% 3.3% 2.8% 1.7%
Effective Tax Rate on Operating Income 36.6% 20.2% 10.6% 30.3% 30.4% 37.4%
Net Operating Asset Turnover 10.49 6.28 4.84 3.97 4.17 4.11
Effect of Financial Leverage -5.7% 0.4% 5.5% 4.2% 0.8% 2.1%
Financial Leverage -20.7% 20.5% 35.2% 54.4% 54.3% 66.6%
Spread 27.4% 1.8% 15.8% 7.8% 1.5% 3.1%
Net Borrowing Cost (NBC) -7.2% 10.7% 7.0% 5.2% 10.3% 3.7%
Return on Operating Assets (ROOA) 5.3% 4.8% 10.1% 8.4% 7.4% 4.3%
Effect of Operating Liability Leverage 14.8% 7.8% 12.6% 4.6% 4.4% 2.5%
Operating Liabilities Leverage 2.95 1.78 1.30 0.57 0.62 0.63
Operating Liabilities Spread 5.0% 4.4% 9.7% 8.1% 7.1% 3.9%