Wal-Mart and Target Financal Report

A slightly higher current ratio would be good to see from Wal-Mart. Many financial ratios offer confidence that paying debts should pose no problem to the company. The Current ratio measures the ability that company pay the current debts due within one year by comparing the company's current liabilities with its

In 2011, Walmart's debt to equity ratio was that of 72.75 while the industry average was 55 and it exceeded the range of comparability by a significant amount(Stock-analysis)(Appendix B). The debt to equity ratio indicates how much debt a company has for every dollar of shareholders' equity. Walmart's value of 72.75 is high especially when considering the trend for the past three years. One reason for Walmart's high debt to equity ratio could be that they have been aggressive in financing their growth with

Wal-Mart has an increase on per share of common stock, between 2005-2007. Based on the annual report of Wal-Mart for 2007, the company generally has a working capital deficit due to the

Gregg Steinhafel, Target’s Chief Executive Officer, chairman and president stated that “Target generated strong financial performance in 2011, overcoming sluggish economic growth, restrained consumer spending and an intensely promotional holiday season” (Target.com, 2012). Additionally, Steinhafel stated that “For the full year, our U.S. businesses generated 14.3 percent growth in adjusted earnings per share, and we experienced our strongest growth in comparable-store sales since 2007. As we look ahead to 2012, we’ll continue to focus on bringing our ‘Expect More. Pay Less’ brand promise to life for our guests, providing unique, well-designed merchandise while driving value and loyalty with initiatives like 5% Rewards and REDcard Free Shipping” (Target.com, 2012). In addition, Steinhafel stated that Target will continue to invest in the stores, online and their mobile channels. Also Target is preparing to open their open their first CityTarget locations in July 2012 and arrange for the opening of their first Canadian Target stores in the early months of 2013. (Target.com, 2012).

Wal-Mart’s current ratio is 0.93, Target current ratio is 1.11 and the industry ratio is 3.04.

invested in target surged and created value for all stakeholders from 2005-2008. From 2005-2007, Target was able to effectively use the money it borrowed from investors and creditor to create value for the organization. This occurred because of a surge in economic activity from 2005-2007 (United States Department of Labor, 2011). Why did the ROIC take a down turn? What was the cause? According to the Wall Street Journal, Target Corp.’s credit-card portfolio hurt its performance in the recession, as delinquencies and defaults soared. The economic recession that began in 2007 was the main catalyst behind Targets decrease in ROIC. The company’s ROIC decreased through much of the recession. Target is able to maintain a surplus over the cost of capital from 2005-2009. The Weighted average cost of capital was almost parallel form 2005-2009.

This ratio is similar to current ratio, except that it excludes inventory from current assets. Inventory is subtracted because it is considered to be less liquid than other current assets, that is, it cannot be easily used to pay for the company’s current liabilities. A company having a quick ratio of at least 1.0, is considered to be financially stable. It has sufficient liquid assets and hence, it will be able to pay back its debts easily (Qasim Saleem et al., 2011).

When analyzing current ratio and quick ratio we can say that the company’s liquidity is efficient enough to pay off its currents debts, since the trend for the period stayed fluctuating around the same percentages. Meanwhile, accounts receivable followed a negative trend, meaning that the company’s days of accounts receivable increased showing that they are having a hard time collecting receivables in a timely manner. In addition, inventory and accounts payable turnover increased over the first three years, showing in one hand the inefficiency of the company at selling inventory and on the other hand that they are making payments faster to the supplier which is a sign of their improving financial conditions. The last item under liquidity ratio is cash conversion cycle, showing a deteriorating trend, which confirms the effectiveness of a company’s management converting cash on hand into inventory to sales and sales back into

However, as discussed before, According to the Key Industrial Financial Ratio U.S. Industrial Long-Term Debt table, a company whose ratio is ranked as A has the long-term debt/capital ratio and Total debt/Capitalization of 33.9% and 42.5% respectively. Thus, 40% of the debt ratio was used for valuation model for Target

The quick ratio is a measure of how well a company can meet its short-term financial liabilities. Because inventories are generally the least liquid of an organisation assets a more precise assessment of liquidity may be obtained by excluding inventories from the numerator of the current ratio (Times, 2017, p. 148). See Table II, below with the quick ratio formula and calculations for Wesfarmers.

It subtracts inventories from current assets before dividing that number into liabilities. Quick ratios show how well current liabilities are covered by cash and by items with a ready cash value. To find the Quick Ratio, find the Current Assets, Inventory, and Current Liabilities

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 stock and thus

Liquidity In analyzing liquidity of the company, the current ratio is not very telling of a falling company. The company increased its ratio throughout the period of the income statement thus building upon its company assets and allowing for a 6-1 ratio of assets over its liabilities. This implies the company is still able to operate sufficiently even though it did not make its optimum current ratio of about 8-1. However, when one takes the inventory out of the equation with the quick ratio, the numbers show the true strength of short term liquidity. The numbers are still good, and do not indicate failure – but are

In 1962, Wal-Mart was built sometime by Sam Walton in Roger, Arkansas. Wal-Mart has 5,100 stores and clubs all over the United States and a sum of 8,300 unit's global. The company was able to employ something like over 2 million associates from all over the world and about 2.4 million in the United States. Wal-Marts average annual total income rate was somewhat in excess of 10% for the three years from the fiscal year that is ending 2009 to the fiscal year ending 2011 (Blanchard, 2008). Research shows that they also had what was known as a stock split of 100 %; Wal-Mart was able to see this split 12 times all through the eras of 1973 through 2002. They have received many awards and were categorized 5th in Fortune magazine's "Global Most Well-regarded All-Stars" as the third most appreciated corporation in America (Wal-Mart, 2013)

Target 's turnover is about six times a year, while Wal-Mart and Amazon about eight times. This explains that Target’s turnover is much closer to the both companies, which mean that the company functioning into the right path toward success. “Inventory-turnover ratio and days-inventory-outstanding are two metrics used to assess a company’s inventory management. Best Buy’s inventory-turnover ratio improved in fiscal 2014 to 5.48 compared to the previous