Comparison Of Target And Walmart

CVS has a slightly lower value for days to sell, meaning they have a quicker turnover in their inventory than Walgreens. They will then be able to sell more inventory which means that they will convert more assets to cash. A company doesn’t want all of its assets sitting in inventory because it is not liquid at that point. CVS had a higher value for days to collect. This means that it will take them longer to receive their money from sales. This could cause problems because a company reports the increase to sales revenue but does not report an increase to cash until it is received. They must also plan accordingly for when they need to do their purchases because they may not have received their cash from the customer

Within every organization there are advantages and disadvantages as well as strengthens and weakness. One of the biggest weaknesses of the Target Corporation is that all of their operations are located in the US. The organization would benefit more if they engaged in business with multinational countries. Wal-Mart has more than 11,000 retail stores in 27 multinational countries. If Target is ever going to move out of their second place position behind Wal-Mart there are going to need to expand globally. The Target Corporation is still trying to recover from the embarrassing financial disaster they made when they tried expanding their brand in Canada. Target spent 1.8 billion for 222 locations in Canada. Unfortunately, this merger

As the leading discount retailer in the United States, WalMart (NYSE:WMT) has consistently shown an exceptional ability to master the complexities of logistics, supply chain management, retailing and pricing management. The WalMart supply chain is among the most advanced and sophisticated in its use of analytics and information systems globally, often computing pricing variation and analysis literally overnight based on satellite uploads of information (WalMart Investor Relations, 2013). WalMart has also successfully taken a capital-intensive business model and transformed it into a retailing business capable of generating high profitability from low margin products based one efficiency alone (Zhu, Singh, Manuszak, 2009). WalMart is also one of the most-researched companies in the world, and continues to provide in-depth financial data on their Investor Relations site (WalMart Investor Relations, 2013). The purpose of this analysis is to evaluate the mission, vision, and overall strategy of WalMart and also define three objectives for improving the organization's financial position, showing how the objectives defined relate to the mission, vision and strategy of the company. In addition for each objective, meaningful performance measures are provided in addition to defined expected level of performance as well. For each of the objectives chosen at least one new

The companies I am studying are Wal-Mart and Target. Both are major discount retailers, general merchandisers who compete as cost leaders. These companies both very large, big enough to execute on their strategies effectively. Yet one has chosen the path of international growth and the other has not yet, pending expansion into Canada in 2013.

In 2011, Walmart's inventory turnover was 11.62 and the industry average was 10.4(stock-analysis). It's fixed asset turnover was 3.88 and the industry average was 3.56, and it's total asset turnover was 2.34 and the industry average was 1.56(Stock-analysis). The values calculated for all three ratios mentioned all resulted in substantially different values in a positive way (Appendix B). Historically the values of each ratio have maintained relatively constant, which in this case is not a weakness. Asset management is a strength for Walmart, which ultimately means that they are maintaining their assets in the correct manner in order to have an efficient way of business.

Many discount retailers have come and gone over the years, but Wal-Mart and more recently Target, have employed business models that continually deliver profits, even in the struggling economy of the United states in recent years. Wal-Mart and Target both have expanded rapidly since their inception and while Wal-Mart has become an international retailer with stores in fifteen countries and all over the United States while Target has

The Current Ratio is used to identify whether or not a company can pay its current obligations.

Current Ratio: Current ratio helps the company assess its ability to use assets like cash, accounts receivable, inventory and the ability to pay short term liabilities as the accounts payable and wages. The ratio can be found by dividing the current assets /the current liabilities. Year 12 shows a ratio of 1.78 with year 11 a ratio of 1.86. Year 12 is down from year 11. The industry is 2.1 so year 12 has declined from the previous year and is near the lower quartile which means there is a weakness. There is a showing of declining trending.

To find the current ratio you need to look on the company’s balance sheet. You take the current total assets and divide by the total current liabilities. This gives you your current

Accounts receivable turnover measures how many times a company can turn its accounts receivables into cash. This ratio shows how well the company is collecting credit sales from its customers. The equation for accounts receivable turnover

Moreover, the slight increase in Kohl’s average total assets has impacted their Du Pont ROI. Attributing to the decrease is the increased inventory and significant shrinkage in cash. Inventory turnover “measures how many times inventory turns over in a year.” (Berman, 2006) On average Kohl’s turned inventory 3.81 times in 2010, as compared to 3.53 times in 2012. This calculation of inventory turnover is illustrated in exhibit1.2. On average, the higher the ratio the better the company is at managing inventory it also gives them a better cash position. However, the company anticipated higher sales, but due to external factors mentioned above the company was unable to quickly convert inventory into sales as expected. To move inventory Kohl’s offered discount pricing on merchandise in the last six months of 2012.In anticipation of the 2012 holiday season, Kohl’s spent $523 million on inventory. This investment contributed

This paper will give a summary of Target corporation versus Wal-Mart stores, Incorporated. In the following weeks it will compare the financial performances of these two companies, by evaluating circumstances such as the times interest earned, return on equity, return on assets and other factors. This paper will present an overview of the exchanges on which both company’s stock is traded. It will also present characteristics of that particular exchange which may have led the company to be listed there versus another exchange. This summary will also explain the types of securities both Wal-Mart and Target have outstanding, such as the bonds, preferred stock or the common

Accounts receivable for Wal-Mart is 9 days and Target’s is 6 days, and the industry is 17 days.

One of the five measurements of a financial ratio analysis is asset management, also known as turnover. Dess, et al. (2012) evaluates turnover by calculating the cost of goods sold over inventory (p. 497). Inventory turnover evaluates how a company can flip its product within a given time (Adkins, n.d.). The higher the turnover, the more “light inventory” a company has as Adkins (n.d.) explained. Turning over inventory, especially in the shoe retail industry, is imperative to keeping up with the competition and making a profit. Inventory turnover allows for the best price stability that, in turn, offers a better profit margin from selling at competitive prices. Customers want to see the newest arrivals, not the old products that everyone else has. For Footlocker and Finish Line, turning over the old with the new inventory can be costly and will jeopardize their clientele. Therefore, in comparing Finish Line to Foot Locker (Figure 3), Finish Line turns over inventory faster while it makes more use of its freed cash from its profit margin for other opportunities.

At 200 days Sears’ average receivables collection period was very high when compared to Wal-Mart’s 3 days. Wal-Mart’s inventory turnover of 5.78 edged out Sears’ 5.55, leading to a 3 day difference in the average number of days in inventory. Wal-Mart’s return on asserts of 0.083 was higher than Sears’ 0.032. Due to Sears’ heavy reliance on debt its debt service coverage ratio was 1.1 whereas Wal-Mart’s was 11.7.