Essay on Wal-Mart Financial Analysis

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Corporate Finance: Wal-Mart Contents Corporate Finance: Wal-Mart 1 1. Introduction 2 2. Success at Delivering Value to the Shareholders in the Last 5 Years 2 2.1 Growth in Earnings 2 2.2 Growth in Dividend Declared 3 3. Valuation of Equity 4 3.1 Net Asset Value (NAV) 5 3.2 Price / Earnings Ratio 5 3.3 Discounted Free Cash Flow 7 4. Reconciliation of Differences 8 4.1 Benefits and Costs of Using Net Assets Value 9 4.2 Benefits and Costs of Using Price Earnings Ratio 9 4.3 Benefits and Costs of Using Discounted Free Cash Flow 9 5. Conclusion 9 1. Introduction The organization that I have chosen for the purpose of this corporate finance analysis is Wal-Mart. As is well known, Wal-Mart is the global market leader of…show more content…
However the author emphasizes that the issue actually is the other way around that the shareholder value principle has not betrayed the management rather it is the management that has betrayed the principle. In basic, delivering value to the shareholders means that the organization has been able to grow the earnings, the dividends of the organization and the share price. Thus in analyzing the delivery of shareholder value by Wal-Mart these three elements will be focused upon. 2.1 Growth in Earnings In analyzing the growth in earnings of the shareholder, a simple but effective tool is the Earnings per share value. For Wal-Mart, this is given as under: 2012 2011 2010 2009 2008 EPS 4.56 4.20 3.74 3.35 3.16 As can be seen from the value and trend of earningper of Share of Wal-Mart the value delivered to the shareholders has increased in the period 2008 to 2012. This means that the organization has been successful in creating more income every year and then delivering a larger portion of income to the shareholders. In 2008, the Earnings per Share were 3.16 dollars which increased to 4.56 in 2012. 2.2 Growth in Dividend Declared The following is the history of dividends declared and paid by Wal-Mart from 2008 to 2012. Date Dec-12 Aug-12 May-12 Mar-12 Dec-11 Aug-11 May-11 Mar-11 Dec-10 Aug-10 May-10 Aug-10 Amount 0.47
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