Team Names_______________________________________________________________Section_____
Read Walmart Stores Discount Operations (found in the Harvard Business Publishing course pack).

Although this case can read like a story, there is important analytical information contained within it that yields insights on the company's low cost leadership. Your assignment is to fill in the table below with key values from the case that completes the Walmart financial picture. Then briefly answer the questions which follow.

1. Complete this financial snapshot comparison between Walmart and the average for the industry by filling in the shaded cells using data from the case (note that these are common-sized financials). In some instances the case data is not precise about the 1984 year, and so you will need to make reasonable assumptions about what data to use. Use only data that is in the case; there is no need to search externally for additional information.

Discounting Industry Economics, 1984 | | Industry Average | Walmart | Difference(Walmart minus Industry) | Net sales | 100.0 | 100.0 | 0.0 | Cost of goods sold | 71.9 | 74% | 2.1 | Gross profit | 28.1 | 26% | -2.1 | | | | | Operating expense | 23.3 | 18% | -5.3 | Payroll expense | 11.2 | 10.2% | -1 | Advertising expense | 2.3 | 3% | 0.7 | Rental expense | 2.2 | 1.9% | -0.3 | Corporate overhead | 7.6 | 5% | -2.6 | | | | | Operating income | 5.9 | 8% | 2.1 |

Assumptions: 1. Payroll expense was 11.5% in 1970 but trimmed to 10.1% in 1985, assumption of 10.2% in 1984 2. $16.3 million represented Walmart’s TV budget in 1985, assuming that $14 million in 1984 representing 50 percent of its advertising budget. Giving an advertising expense of $18 million 3. Rental expenses accounted for 1.8% of sales in the 1970s, after