TERM PROJECT: COSTCO-- COMPANY REPORT

Disha ShahHong Pan

Xiaoting HuAnthony Lucci

13 December 2011 FIN203

Dr. White

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EXECUTIVE SUMMARY

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TABLE OF CONTENTS

EXECUTIVE SUMMARYPART I: CORPORATE GOVERNANCE ANALYSIS PART II: STOCKHOLDER ANALYSIS PART III: CAPITAL BUDGETING DECISIONSPART IV: RISK/RETURN PROFILE AND COST OF CAPITAL PART V: DIVIDEND POLICYPART VI: VALUATION/RATIO ANALYSIS/CONCLUSIONPART VII: APPENDIXREFERENCES

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PART I: CORPORATE GOVERNANCE ANALYSIS

To understand the relationship between managers and stockholders, try answering the following questions.

1. The Chief Executive Officer a. Who is the CEO of the company? How long has he or she been CEO? b. What is his compensation package? (Break down by salary, bonus and option components) c. Does he have a golden parachute?

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2. The Board of Directors (you do not need to identify each director)a. How many of the directors are insider directors? (i.e. employees or managers of the company) b. How many of the directors have other connections to the firm (as suppliers, clients, customers.)? c. How many of the directors are CEOs of other companies? d. Do any of the directors have large stockholdings or represent those who do? e. What is the compensation of the directors for serving on the Board?

For Questions a) through d) please refer to Table 1 in the Appendix. a. 5 of the directors on the board are Insider Directors1.b. None of the directors have other connections to the firm1.

c. 4 of the directors on the board are CEOs of other companies1

d. Yes. All the directors on the Board hold stocks in the firm. The insider directors hold a larger percentage of holdings as compared to the rest of the board1.

e. The compensation of the directors on the Board are given in the following table1:

Board of Directors Total Compensation 2010

James D. Sinegal* 3,529,434Jeffrey H. Brotman* 3,525,378

Richard D. DiCerchio* 2,523,482Richard A. Galanti* 2,232,502W. Craig Jelinek* 850,000

Richard M. Libenson 534,068Daniel J. Evans 214,516

Charles T. Munger 212,879Susan L. Decker 205,879William H. Gates 205,879

Jill S. Ruckelshaus 205,879Hamilton E. James 204,879Benjamin S. Carson 204,879

Jeffrey S. Raikes 204,835John W. Meisenbach 203,879

*Indicates Insider Director

1 mergentonline.com. (n.d.). Retrieved December 3, 2011, from Mergent Online.

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3. Why are the compensation schemes and the independence of Directors important in running the company?

Compensation schemes of directors are tied to financial performance of the company and give the directors more incentive to pursue shareholders interests. Since directors are charged with employing and firing managers to run the company2, the compensation will push them to hire the managers that are effective in increasing the market value of company stocks. On one hand, directors are given the option to buy stocks of the company as awards2. Therefore, increasing the stock value will raise their compensation value. From the information above, most directors own large shares of stocks, occupying 60% to 85% of their compenstion, while their salaries only occupy 10% to 30% approximately. On the other hand, the better performance for the shareholders interests, the higher awards and more opportunities to get promoted. Unlike insider directors, independence of Directors just serve on the board and do not have the rights to execute the company’s stocks, but have the rights to hold the company stocks. Therefore, they act on behalf of shareholders interests and keep an eye on the managers running the company. Since they so not have a direct relation with the company, they are objective in making decisions when there are disputes between shareholders and the board2. In addition, they are generally experts in financial areas. As a result, they can provide some professional suggestions for the company and bring outside experience to the board2.

To understand the relationship between the firm and financial markets, try asking the following questions :

4. Financial Market Concerns a. How many analysts follow the firm? b. How much trading volume is there on this stock?

a. 3The company website indicates that 27 analysts coverage.  4Bloomberg indicates that there are 25 analysts covering the firm. The screenshots are attached as Table 2 and Screenshot 3 respectively in the appendix.

b. Costco has a trading volume of 1.52 million5. Please refer to Screenshot 4. (Wendy-Citation)

2Stephen A.Ross, Randolph W. Westerfield, & Bradford D. Jordan. (2010). Fundamentals of corporate finance (alternate ed.). New York, NY: McGraw-Hill/Irwin.3 Costco Wholesale. (n.d.). Retrieved December 3, 2011, from http://phx.corporate-ir.net/phoenix.zhtml?c=83830&p=irol-analysts4 bloomberg.com. (n.d.). Retrieved December 3, 2011, from Bloomberg Professional.5 google.com. (n.d.). Retrieved December 3, 2011, from Google Finance.

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PART II: STOCKHOLDER ANALYSIS

To understand who the average investors in the firm are, try answering the following questions:

5. Who holds stock in this company? a. How many stockholders does the company have? b. What percent of the stock is held by institutional investors? c. Does the company have listings in foreign markets?

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6. Insider Holdings - you do not need to identify individuals nor institutionsa. Who are the insiders in this company? (Besides the managers and directors, anyone with more than

5% is treated as an insider) b. What role do the insiders play in running the company? c. What percent of the stock is held by insiders in the company? d. Have insiders been buying or selling stock in this company in the most recent year?

a. 13The following graph shows the various insiders and their share in the company’s stock:

Charles T Munger; 5.51% Joseph P Portera; 4.38%

Jeffrey H Brotman; 4.24%

Douglas W Schutt; 3.33%

John D McKay; 2.56%James P Murphy;

2.54%Dennis R Zook; 2.36%Richard A Galanti;

2.26%

11 people < 2.16%; 12.53%

James D Sinegal; 36.34%

Thomas K Walker; 11.00%

Craig W Jelinek; 7.22%

Richard D Dichechio; 5.71%

b. Almost all of the insiders in the company are people who are directors on the board of Costco and thus play a crucial role in running the company. Thus insider trading and the reaction of the insiders to the company’s stock prices would be a good measure of whether the company is functioning in an efficient manner. Thus if the insiders lose confidence in the stock of the company, this should be a educated indication of bad news and inefficiency and not just a mass reaction to sell.

c. 0.52% of the stock is held by the insiders in the companyd. 14In the last 12 months, there has been a total of 121,666 shares that have been purchased in a total of

14 purchases and 1587894 shares have been sold in a total of 111 sales. Also, all the 14 purchases have been made within the last 3 months which tells us that the insider confidence in the company was unstable in the beginning of the year but has gotten better over the last 3 months.

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7. Why is it important to know who the firm’s investors are?

It’s important to know the firm’s investors for the following reasons: We can know the percentage of short term investors and long term investors in the market capital of

the company. Institutional investors hold majority of company stocks. Therefore, depending on the market image

of these institutions, the stock of the company becomes more or less attractive to other investors in the market. Many big companies such as the BlackRock Inc, the Capital Group Companies, the Vanguard Group, and State Street Corporation, holds shares of Costco. This indicates that the stock is a good buy. On the other hand, the institutional investors are mostly investment companies, which means that there is high probability that the stock will earn returns. Meanwhile, however, this also means the stock is very risky, if there is any good or bad information disclosed because investment companies have similar considerations and decisions facing the same information.

Although the insiders occupy only 0.52% shares of stocks, they still have an important effect on other investors. Since the insiders in Costco are all executives and directors of the Board, they are better able than stockholders to judge whether their stock price is too high or too low15. If they sell their stocks frequently instead of holding, it is a warning for investors that the stocks are not so valuable to buy at this moment.

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PART III: CAPITAL BUDGETING DECISIONS

To analyze the quality of the firm's existing projects and get a sense of the quality of future projects, try answering the following questions:

8. What are the specific types of projects this firm invests in?a. How are the projects generated?b. How are the projects evaluated?c. Are the projects profitable? (You are not required to solve for NPV or IRR here. The assumption is

that management has gone through the capital budgeting process.)

a. The business model of Costco is that it operates membership warehouse. As we know, a company will take a project only if it could help increase the value of shareholders. In order to do this, Cost will select the projects related to its primary business such as purchasing land, buildings, equipment costs for new and remodeled warehouses and expanding its suppliers chain.

b. Normally, before accepting a project, it will be compared to a financial product with similar risk. The project will be accepted only if the return of the project is higher than that of the financial products with similar risk. The common method to evaluate a project is to calculate NPV and IRR. The project will be taken when NPV is positive or IRR is higher than the expected return.

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c. In this case, we found that Costco expands its warehouses every year. Taking the Fiscal Year 2011 for example, Costco decided to spend approximately $1600 million for real estate, construction, remodeling and equipment for warehouse and other related operations. Costco plans to open 31 new warehouses in 2011, including one or two relocations of existing warehouses to large and better locations.

i. The ROI and ROE ratio indicates that cost has a good ability to control its new warehouse (Wendy-What is the value of these ratios?)

ii. The market response as noticed is that the stock price of Costco is increasing since 2008. Also, Costco is a high dividend paying company which is also a positive indication.

9. Do you think this firm will shift to different types of projects in the future? Why is it important to ask this question regarding future projects.

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PART IV: RISK/RETURN PROFILE AND COST OF CAPITAL

To understand the risk profile of the company, estimate risk parameters and the hurdle rates for the firm, try answering the following questions:

10. Company and Equity Beta

16Find the Beta from different sources. If you have access to Bloomberg, go into the beta calculation page and print off the page (after setting return intervals to monthly and using 5 years of data); otherwise simply use published betas. Of course, you may also calculate your own beta.

a. Using the beta that you have chosen, estimate the expected return on an equity investment in this company

b. As a manager in this firm, how would you use this expected return? c. What is your realized return for the past 5 years if you invested in this company’s stock? d. Why is the expected return based on beta different from the realized return?

a. To estimate the expected return on an equity investment in Costco, we employ the following methodology:

16Beta of Costco = β = 0.71 (Refer Screenshot 5 in the appendix)17Risk free Rate = Rf = 0.11Market Rate = Rm = 0.10 (Assumed)Therefore, using CAPM Model:

Expected Rate of Return=Risk Free Rate + (Market Rate – Risk Free Rate)*Beta

=> E(r)=Rf+(Rm-Rf)*β=> 0.11+(0.10-0.11)*0.71=0.1029Thus, Costco is expected to earn a 10.29% return as on December 2nd 2011

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b. As a manager in this firm, I would compare this expected return to the market return and the risk free rate of return which is the rate of return I get from investing in a risk free US government Treasury bills. By looking at these 3 figures, I realize that the expected return from investing in Costco Shares is greater than the rest of the market but lower than investing in government bonds. This would imply that my company would lose out on investors as the return on a share of Costco yields lesser return and a higher risk as compared with a T-bill. However, I also know that my realized return is much higher than a T-bill. Which indicates that the calculation of my risk figure (beta) is not a clear indication of how much return my share in reality earns. In other ways, Costco’s Beta does not take the inefficiency in the capital markets in a comprehensive manner. Thus as a manager, I would try to make my beta measure more accurate so that Costco does not lose investors to a faulty expected return calculation.

c. 18The following table shows the realized return for the past 5 years in Costco Equity Investments:

Years 2011 2010 2009 2008 2007ROE 12.84 12.53 11.34 14.44 12.22

d. The reason behind the difference between the expected and the realized returns is that the Stock Market is not efficient. That is, it does not follow the efficient market hypothesis which states that an investor cannot consistently receive returns over and above the average market return simply on the basis of a risk factor or Beta. In other words, since beta is the primary cause of difference between the expected and the realized returns, it can be stated that since the stock market is not efficient, the beta does not accurately predict the amount of return that an investor actually receives on investing in the stock of a company. This is the primary cause of difference between the realized and the actual returns in a firm.

11. Comparing Company Beta to Competitors’ Beta

a. Is there a difference in Beta? Why do you think there may be a difference?

a. 16Beta of Costco=0.7119Beta of Wal-mart=0.63 (Refer to Screenshot 6 in the Appendix)

COST WMT

Market Cap (intraday)20: 37.59B 200.12B

Trailing P/E (ttm, intraday): 26.27 12.29

Profit Margin (ttm): 1.64% 3.77%

Return on Assets (ttm): 6.03% 8.56%

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The betas of Costco and Walmart are both below 1, so their rerurns are below the market return and their risk rate is lower than the market risk rate. The beta of Costco is higher than the one of Walmart, which means Costco has greater systematic risk than Walmart and a higher expected return than Walmart.

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There could be many factors lead to the difference beta between Costco and Walmart:1)Walmart is a much larger company than Costco and have a better reputation in the financial marker. 2)The market capital of walmart is much higher than that of Costco so its capbility of risk resistance is stronger. 3)P/E ratio shows the growth rate of the company. The Walmart with a lower ratio presents that Walmart grow more slowly and is more stable than Costco.4)The profit margin and the return of the assets of the Walmart is higher than Costco, which means Walmart has a robust risk resistence.

12. Estimating Default Risk and Cost of Debt i. If your company is rated, a. What is the most recent rating for the firm? b. What is the interest rate associated with this rating? c. What is the company's marginal tax rate?

a. 21The most recent credit rating for the firm is AAA (Refer to Screenshot 7)b. Normally, the higher the rating, the lower risk and  the lower interest rate. 22The long term YTM of

Bond issued by cost is 1.77% . Maturity date is 2017/03/15. The rate of bond with maturity date of 2012 is 0.68%.23

c.

Wendy-Calculated Tax Rate

13. Estimating Weighted Average Cost of Capital (You need to calculate these measures, give all your assumptions and sources of data)

a. Weights for Debt and Equity i. What are the weights of debt and equity? Should you use market or book values?

ii. Are there any other sources of funds other than debt and equity, such as preferred stock?

b. Cost of Capital i. What is the cost of equity?

ii. What is the cost of debt?iii. What is the weighted average cost of capital?

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PART V: DIVIDEND POLICY

To analyze how much the firm has returned to stockholders in the past, and to assess, from a qualitative trade off, whether it should return more or less, try the following:

14. Historical Dividend Policy a. How much has this company paid in dividends over the last few years? b. How much stock has this company bought back over the last few years? c. Has there been any stock splits?

a. 24The following table shows the various dividends paid by Costco in the past 5 years. Please refer to Table 10 in the appendix. An average of all the dividends in a particular year is taken.

Year Amount of Dividend Paid2011 0.231302010 0.198752009 0.175002008 0.156252007 0.14125

b. No, this company has had no stock buybacks

c. 25Yes, Costco has had 2 stock splits as listed under:Split Date Ratio Price(Close) Price(Day before) Change

Jan 14, 2000 2:1 49.06 94.94 3.35%Oct 22, 1993 2:1 19.00 40.75 -6.75%

15. Firm Characteristics a. How easily can the firm convey information to financial markets? In other words, how necessary is it

for them to use dividend policy as a signal? b. Who is the average stockholder in this firm? Does he or she like dividends or would they prefer

stock buybacks? c. How well can this firm forecast its future financing needs? How valuable is preserving flexibility to

this firm?

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a. The dividend policy responds to the need of shareholders26. Individual shareholders and new issue floatation costs make the company choose the low-dividend payout policy because the tax rate on dividend income is higher than on capital gains and the new issue floatation costs are very expensive. Corporate investors and some tax-exempted investors make the company choose the high- dividend payout policy. Corporate investors has 70% or more dividend exemption to pay taxes and even some institutions such as pension funds, endowment funds and trust funds, are tax free27. Thus, since Costco has a high percentage of Corporate Investors, the dividend policy information becomes all the more necessary since the company has to adopt a high dividend payout policy.

b. Approximately 80% of the stockholders of Costco are institutional investors. They would prefer the high-dividend payout policy rather than stock repurchase which is also why the payout ratio of Costco is as high as 27%28, a little below the Wal-Mart payout ratio 30%29 and higher than the Target 25%30.

c. The life cycle theory says that firms trade off the agency costs of excess cash retention against the potential future costs of external equity financing31.When Costco pays dividends to its stockholders, it makes a distribution of cash flow for the investment now and its future financing needs. What’s more, hoarding too much free cash flow would lead to agency problems32. Therefore, high-dividend payout policy is a good way for Costco to forecast its future financing need well.Costco keeps high-dividend payout policy to the needs of its stockholders and the needs of avoiding agency problem. However, the policy also have some disadvantages. 1)The dividend is received after taxes.2)Once estabilished, dividend cuts would affect its stock price33. Sometimes, the stock price will drop dramatically because the stockholders think the company is in trouble and speculate decreasing dividends. Thus, the Costco is forced to continue paying its high dividends.3)It’s better to make distributions of free cash flow, but if there are no excess cash flows or not enough cash flows covering the investment now and in the future, then the company has to pay high dividend to its stockholders and rely on costly external equity financing. With the three drawbacks above, it is necessary for Costco to use the flexibility payment policy. For example, join the repurchases and dividend policies together in fixed percentage or let its stockholders vote on the policy of their choice.

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PART VI: VALUATION/RATIO ANALYSIS/CONCLUSION

16. Growth Pattern Choice a. How fast have this company's earnings grown historically? b. How fast do analysts expect this company's earnings to grow in the future? c. What do the fundamentals suggest about earnings growth at this company? If there is anticipated

high growth, what are the barriers to entry that will allow this high growth to continue? d. How much of the value of the firm do you think comes from the expected growth?

a. 35Refer to Screenshot 12 Wendy-Insert an explanation of the table and citationb. 36Refer to Screenshot 13 Wendy-Insert an explanation of the table and citationc. Internal:

The biggest driver of development of Costco is sales growth. In order to attract more customers/members, Costco continuously carries out its expanding plan which offers a support on the earnings growth.External:According the above statistic(Wendy-Which above statistic?), the whole industry and sector will behave positively in the next quarter and the next year. In the next 5 years, the growth rate of this industry will slow down, but will still have a positive trend.

d. 37Current market value * growth rate=Wendy-What is this equation equal to? Where have you got these figures from? What is the name of the model/formula have you used here?87.07*13.17%=11.46/share

17. Value EnhancementIn what aspect of corporate finance (investment, financing or dividend policy) does this firm lag? If you fixed the problem areas (i.e., take better projects, move to the optimal debt ratio, return more or less cash to owners), what would happen to the value of the equity in this firm?

18. Financial Ratio Analysis: do this in any of the sections above where it is relevant.

Comparing ratios : do not do “elevator” analysis, i.e. do not just state that one ratio is higher or lower than the other. Explain what may be the causes of the relative inferior or superior ratios.

a. Is the firm more liquid or less liquid?Years 2011 2010 2009 2008 200738Quick Ratio 0.55 0.56 0.49 0.45 0.4838Current Ratio 1.14 1.16 1.11 1.07 1.09

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39The ideal Quick Ratio should be 1 and the ideal Current Ratio should be 2. Judging from the company’s Quick Ratio and it’s Current Ratio, we can derive the conclusion that the firm is less liquid as both the ratios are far from the ideal.

b. Does it have too much or too little debt?Years 2011 2010 2009 2008 200738Debt Equity 0.18 0.2 0.23 0.26 0.2640A high debt to equity ratio is indicative of the fact that the company’s projects are financed more by debt than by equity. In the case of Costco, we see that the debt equity ratio is very low indicating that most of the firm’s projects are financed by equity putting the shareholders’ money is jeopardy if the firm makes a loss on it’s investment. The firm has very little debt.

c. Is it more profitable or less profitable?Years 2011 2010 2009 2008 200738NPM 2.8019 2.7238 2.5426 2.7739 2.5498Costco is a less profitable company as on an average it makes(before interest and taxes) $0.03 per $1 of sales. However, this need not necessarily be indicative of a risky position for the firm as it doesn’t have high fixed costs associated with its functioning. Additionally, the firm borrows a small amount and thus interest payments that ideally come from the net profit margin are also low.

d. Does it pay too much or too little dividends?Years 2010 2009 2008 2007 200638DPS 0.77 0.68 0.61 0.55 0.49Costco is a high dividend paying company as majority of it’s investors and institutional investors. As compared with it’s competitors (Walmart and Target) the firm pays the highest dividend to its investors.

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e. Is it more efficient or less efficient in managing its assets?Years 2011 2010 2009 2008 200738ROA 5.8 5.71 5.11 6.39 5.8541As a general rule, anything below 5% is very asset-heavy and anything above 20% is asset-light. Thus looking at the firm’s ROA we can say that the firm is quite asset heavy even though the ratio is greater than 5% and is thus not very efficiently utilizing it’s assets to generate income or profits.

f. Does it get higher valuation or lower valuation than its competitors?Anthony-Please include your answer

You can include this in the conclusion: What are future industry trends? What is your outlook for each firm and the industry. Relative to its competitors, explain why you would buy the company’s stock or not? Explain which of the two firms will have a better prospect for the future?

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PART VII: APPENDIX

Table 1:

Name PositionInsider Director?

Other Connections?

CEO;Other Company? Stockholding

          Date Shares Holdings

Jeffrey H. Brotman Chairman Y Y N 11/17 39898 94995

Hamilton E. James Director N N Y 10/22 3000 35120

W. Craig Jelinek COO Y Y N 10/22 43741 61817

Benjamin S. Carson Director N N N 10/22 3000 19500

Susan L. Decker Director N N Y 10/22 3000 29500

Daniel J. Evans Director N N N 10/22 3000 18821

William H. Gates Director N N N 10/22 3000 31840

Richard M.

Libenson Director N N N 10/22 3000 12000

John W.

Meisenbach Director N N N 10/22 3000 9000

Charles T. Munger Director N N Y 10/22 3000 123384

Jeffrey S. Raikes Director N N Y 10/22 3000 17250

Jill S. Ruckelshaus Director N N N 10/22 3000 21566

James D. Sinegal CEO Y Y N 11/16 8000 814261

Richard D.

DiCerchio

Ex-COO;

Director Y Y N 6/14 6048 128030

Richard A. Galanti CFO Y Y N 10/27 9558 50740

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Table 2:

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Screenshot 3:

Screenshot 4:

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Screenshot 5:

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Screenshot 6:

Screenshot 7:

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Screenshot 8:

Screenshot 9:

Table 10:

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Ex/Eff Date Type Cash Amount Declaration Date Record Date Payment Date

11/8/2011 XC 0.24 10/25/2011 11/11/2011 11/25/2011

8/3/2011 XC 0.24 7/17/2011 8/5/2011 8/19/2011

5/11/2011 XC 0.24 4/26/2011 5/13/2011 5/27/2011

2/9/2011 XC 0.205 1/27/2011 2/11/2011 2/25/2011

10/27/2010 XC 0.205 10/7/2010 10/29/2010 11/12/2010

8/4/2010 XC 0.205 7/19/2010 8/6/2010 8/20/2010

5/5/2010 XC 0.205 4/22/2010 5/7/2010 5/21/2010

2/10/2010 XC 0.18 1/28/2010 2/12/2010 2/26/2010

10/21/2009 XC 0.18 10/8/2009 10/23/2009 11/6/2009

8/12/2009 XC 0.18 7/27/2009 8/14/2009 8/28/2009

5/13/2009 XC 0.18 -- 5/15/2009 5/29/2009

2/11/2009 XC 0.16 1/28/2009 2/13/2009 2/27/2009

11/12/2008 XC 0.16 -- 11/14/2008 11/28/2008

8/6/2008 XC 0.16 7/21/2008 8/8/2008 8/22/2008

5/14/2008 XC 0.16 -- 5/16/2008 5/30/2008

2/13/2008 XC 0.145 1/29/2008 2/15/2008 2/29/2008

11/28/2007 XC 0.145 11/13/2007 11/30/2007 12/14/2007

7/25/2007 XC 0.145 -- 7/27/2007 8/24/2007

4/25/2007 XC 0.145 4/10/2007 4/27/2007 5/18/2007

2/12/2007 XC 0.13 1/31/2007 2/14/2007 2/28/2007

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Screenshot 12:

Screenshot 13:

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REFERENCES1,2,3,4,5 mergentonline.com. (n.d.). Retrieved December 3, 2011, from Mergent Online. 6,7,8,9 Stephen A.Ross, Randolph W. Westerfield, & Bradford D. Jordan. (2010). Fundamentals of corporate finance (alternate

ed.). New York, NY: McGraw-Hill/Irwin.10 Costco Wholesale. (n.d.). Retrieved December 3, 2011, from http://phx.corporate-ir.net/phoenix.zhtml?c=83830&p=irol-

analysts11 Retrieved Dec 2, 2011 from Bloomberg. URL: https://lh6.googleusercontent.com/8O2-t62QR-1Reasx9aWfpz10ao-

Y4XNqq97_eawVlqYM2b-optCtK60CPjDmxKLFQq556i0gXezQlo_Z8CBvvb4qpEc5WcSAlys-9cczrBRLxJp9YAw13 mergentonline.com. (n.d.). Retrieved December 3, 2011, from Mergent Online:14NASDAQ. (n.d.). Retrieved December 3, 2011, from http://www.nasdaq.com/symbol/cost/insider-trades

NASDAQ(R). (n.d.).15 Stephen A.Ross, Randolph W. Westerfield, & Bradford D. Jordan. (2010). Fundamentals of corporate finance (alternate ed.).

New York, NY: McGraw-Hill/Irwin.16 Retrieved Dec 2, 2011 from Bloomberg17US Treasury. (n.d.). Retrieved December 3, 2011, from http://www.treasury.gov/resource-center/data-chart-center/interest-

rates/Pages/TextView.aspx?data=billrates18 mergentonline.com. (n.d.). Retrieved December 3, 2011, from Mergent Online19 Retrieved Dec 2, 2011 from Bloomberg20 Yahoo! Finance. (n.d). Retrieved Dec 2, 2011 from Yahoo! Finance:http://finance.yahoo.com/q/ks?s=WMT+Key+Statistics.21 Retrieved Dec 2, 2011 from Bloomberg22Morning Star. (n.d.). Retreived Dec 2, 2011 from Morning Star: http://quicktake.morningstar.com/stocknet/bonds.aspx?

symbol=cost23Retrieved Dec 2nd 2011. URL: https://lh4.googleusercontent.com/dGOMa-hU2Vf30UWZIh-VXxEVu2PsW89bnO-

oUanlnDBf4aJiYQE0kyCsaT05HUggWxyyEbHRpVlYa7Q_B0AqEEnHkKUzjsOizSwNzrn0deVfTXZ8MKA24,25 mergentonline.com. (n.d.). Retrieved December 3, 2011, from Mergent Online26,27 Stephen A.Ross, Randolph W. Westerfield, & Bradford D. Jordan. (2010). Fundamentals of corporate finance (alternate ed.).

New York, NY: McGraw-Hill/Irwin.28,29,30 Yahoo! Finance. (n.d). Retrieved Dec 2, 2011 from Yahoo! Finance:http://finance.yahoo.com/q/ks?s=WMT+Key+Statistics35Wendy-Citation relevant to screenshot 1236 Yahoo! Finance. (n.d). Retrieved Dec 2, 2011 from Yahoo! Finance:http://finance.yahoo.com/q/ae?

s=COST+Analyst+Estimates37Wendy-Citation38 mergentonline.com. (n.d.). Retrieved December 3, 2011, from Mergent Online39Complete Business Startup. (n.d.).Retrieved Dec 1, 2011 from Complete Business Startup

URL:http://www.completebusinessstartup.co.uk/starting-business/liquidity.html40Investopedia. (n.d.). Retrieved Dec 2 2011 from Investopedia. URL:

http://www.investopedia.com/university/ratios/debtequity.asp#axzz1fcJH5d8441 Beginner’s Invest. (n.d.). Retrieved Dec 1 2011, from Beginner’s Invest. URL:

http://beginnersinvest.about.com/od/incomestatementanalysis/a/return-on-assets-roa-income-statement.htm

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