Question

500.34 In fiscal year 2017​, ​Wal-Mart Stores​ (WMT) had revenue of $ 500.34 ​billion, gross profit of $ 126.95 ​billion, and net income of $ 9.86 billion. Costco Wholesale Corporation​ (COST) had revenue of $ 129.0 ​billion, gross profit of $ 17.14 ​billion, and net income of $ 2.68 billion. a. Compare the gross margins for Walmart and Costco. b. Compare the net profit margins for Walmart and Costco. c. Which firm was more profitable in 2017​

Answer 1

Answer:

a.  25.37% and 13.28%

b. 1.97% and 2.07%

c. Costco

Explanation:

a.  The gross margins for Walmart and Costco is shown below:

Gross margin = (Gross profit ÷ revenue) × 100

For Walmart,

= ($126.95 ÷ $500.34) × 100

= 25.37%

For Costco,

=  ($17.14 ÷ $129) × 100

= 13.28%

b. The net margins for Walmart and Costco is shown below:

Gross margin = (Net profit ÷ revenue) × 100

For Walmart,

= ($9.86 ÷ $500.34) × 100

= 1.97%

For Costco,

=  ($2.68 ÷ $129) × 100

= 2.07%

c. According to the net profit, the Costco has more profitable in 2017