Wal-Mart Financial Analysis
Danny J. Saldana
August 27, 2012 Professor David Felsberg
I have chosen Wal-Mart as my company to do a financial analysis on. In my financial analysis I will look will be reviewing Wal-Marts financial ratios for years 2010 and 2005. I will also be looking at Target’s financial ratios for the same years to determine how Wal-Mart is doing within its industry.
(All numbers are in thousands)
Current ratio - Measures whether or not a firm has enough resources to pay its debts over in the short-term.
Current ratio = Current assets / Current liabilities
Wal-Mart - $51,893,000 / $58,484,000 = .89
Target - $17,213,000 / $10,070,000 = 1.71
Surprisingly, at least to…show more content… It takes all expenses into account.
Net profit margin = Earnings after interest and taxes / sales
Wal-Mart = $16,389,000 / $421,849,000 = 3.89%
Target = $2,929,000 / $68,466,000 = 3.26%
After all expenses are taken into account, the profit margin narrows considerably between Wal-
Mart and Target.
Gross profit margin - The gross profit margin measures the gross profit earned on sales. The gross profit margin considers the cost of goods sold, but does not include other costs.
Gross profit margin = (Revenues – Cost of goods sold) / Sales
Return on total assets - Return on total assets is a measure of how effectively the company's assets are being used to generate profits.
Return on total assets = Earnings after interest and taxes / Total assets