A Refer to Wal-Mart Financial Statements, Above

question 20

Essay

a. Refer to Wal-Mart financial statements, above. Prepare a forecasted income statement for Year 8 assuming:

• Total revenues are expected to increase by 12% from Year 7 to Year 8.
• Operating income as a percentage of total revenues will remain unchanged from Year 7 to Year 8.
• Total interest costs will increase by 10%.
• Effective tax rate is 37%.

b. What additional information will Wal-Mart need in order to assess whether it needs additional outside funding?

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Definitions:

Lymphocyte Activity

Refers to the actions and responses of lymphocytes, a type of white blood cell, in the immune system to defend the body against pathogens.

Elevated Epinephrine Levels

Higher than normal amounts of epinephrine, a hormone and neurotransmitter involved in the body's fight-or-flight response.

Elevated Risk

A condition or situation where the potential for harm or negative outcomes is higher than normal.

Physical Exercise

Engaging in bodily activities to strengthen muscles and improve overall health.