For those who use a computer in their stock studies, PERT for DOS data files can be very helpful. The files often also contain information on companies that are no longer being followed because of a change in fundamentals or characteristics. For those who do not use a computer, the NAIC Investors Manual describes a manual method of making the necessary calculations and producing the PERT report. Wal-Mart Stores Inc. has a great growth record. The company has long-term leases for stores and equipment.
Leases are one of the ways some companies finance future growth.
They also invest retained equity capital and borrow using long-term debt. In effect, lease obligations are a substitute for debt. In examining Wal-Mart Stores, I note the rate of return on equity capital has declined from 27.3 percent in 1984 to 21.7 percent in 1993. At the same time, the percent earned on retained equity capital has declined from 24.5 percent in 1984 to 18.9 percent in 1993. Wal-Mart Stores is supporting its growth by relying more and more on a leveraged balance sheet.