For the fourth year in a row, Wal-Mart is number one on Fortune magazine 's annual list. Holding the top spot on the Fortune 500 is a distinction that many companies strive to obtain. However, does size equal financial growth and stability? This paper will research Wal-Mart 's financial situation through analyzing its many different financial ratios.
Methodology
For the purpose of this research, all ratios, and pertaining data was retrieved from Mergent Online. The industry used for comparison was obtained by the North American Industry Classification System (NAICS), which replaced the U.S. Standard Industrial Classification (SIC). (http://www.census.gov/epcd/www/naics.html) This peer group reported by NAICS via Mergent includes
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Now in 2004, that $0.06 is superior to the industry average of nearly $0.02. This clearly explains Wal-Mart 's strong and consistent profitability over the past 5 years. However, it has taken aggressive business decisions, marketing, and efficient management of company assets to reach this point.
Asset Management The difference between great companies and average companies is their level of commitment to improving their processes. Wal-Mart is undoubtedly an extremely successful company. However, the commitment to improvement that got them to that spot will determine whether they stay there. Wal-Mart 's consistency in its profitability is something to look highly upon; however, is this consistency a sign of inefficient management of company assets? We will look to the following section for the answer. By comparing the revenue to the total assets, we will see the effectiveness of Wal-Mart 's management of its assets. See Figure 5, shown below. Figure 5 The revenue/total assets ratio, also known as Asset Turnover Ratio, shows effectiveness of assets on the company 's revenue. Over the period, Wal-Mart has maintained a return of approximately $2.50 per $1 of asset. This return is comparable to the industry average of $2.25. This means that Wal-Mart is more aggressive in its uses of assets than the industry. "A high ratio compared with other firms in the same industry could indicate
The purpose of this business report is to gain familiarity with Wal-Mart and to learn about the different aspects that make Wal-Mart a successful company. This report gives an in-depth analysis of the company history, services and products provided, the company philosophy, business methods, organizational structure, and financial and competitive analysis.
In 2016, Wal-Mart’s income came in at $117.5 billion, which increased 1.4%, from the previous year.
) success is the stuff of legend.But there is no mystique at the core of its mammoth success. WalMart 's ability to provide customers with "everyday low prices" and its presence as an economic and political force of gigantic size and influence, is the result of a process that was built on some core principles and procedures. Looking at Walmart 's history and present operations helps investors understand the methodology that enables this sizeable chain to do what it 's known to do best – sell cheap. (For a background on retail operations, see: The Industry Handbook: The Retailing Industry.)
According to its company's website, Wal-Mart's corporate mission states the following; " We save people money so they can live better." This ambiguous statement is backed up by the company expressing its financial priorities: growth, leverage and returns. Growth for Wal-Mart is measured in net sales, where in 2011 they had $419 billion in total net sales. Leverage is measured by operating expenses where in 2011, 19.3% of their total sales was dedicated to operating expenses. Returns are measured in two separate ways; return on investment and free cash flow. In 2011, Wal-Mart earned 19.2% return on investment and their free cash flow was $10.9 billion.
This report is to compare the financial statements of Target and Walmart for last three years and analyze its financial performance. The data has been downloaded from www.sec.gov for analysis. This report initially compares the financial healthiness of both firms based on the financial ratios and then discusses the factors that could have impacted these firms’ finances in last three years. This report also briefly discusses the differences in financial statements. Finally, this report concludes with a recommadenation to investor.
Walmart’s annual report is a comprehensive look at the company's activities throughout the preceding year. Walmart’s annual reports are intended to give shareholders and others, who are financially affiliated, information about the company's activities and financial performance. Also within such a comprehensive report would be plans to attack certain strategic agendas in reference to the company’s long term outlook. Identifying the long-term strategic planning initiative of Walmart will be the focus of this paper. The reader should be able to
This means that their strategies were revised for a positive return on investment. They are operating over eleven thousand stores in more than twenty-seven countries. That is astonishing and great capital while being the largest selling retailer in the world! Their competitor is averaging over seventy-three billion in annual sales and revenue but that is far from the retail giant’s annual revenue and sales (Market Realist, 2016). Wal-Mart has taken off to higher projections and marketing as their current strategy is to build more supercenters and implement a twenty billion dollar share repurchase program in the next few years.
Wal-mart has seen itself become a retail giant over the past decades. They have an enormous amount of control over both consumers and suppliers. Brands literally sacrifice profit margins to have shelf space within their stores. With the addition of grocery brands as well, Wal-mart has positioned itself as a “one-stop” destination for all consumer’s needs. However, there are various internal and external factors that affect the four functions of Management positively or negatively. Organizations need to pay close attention to these factors because it can enhance the company’s success when used appropriately. Currently several factors are top of mind for management. They need to be concerned with in this era are globalization, new technologies, innovation, diversity, and ethics. Wal-mart is a big player in the nation and global market and must stay reactive to these internal and external factors to stay on top. Wal-mart is addressing each of these issues directly.
One of the largest retailer in the United States is known to many of us as Wal-Mart; boasting over 3,500 domestic stores in the United States, with continued growth in their numbers…and about 1,300 locations in Canada, Mexico, the UK (only Western), Germany, Asia and South America (Mergent). Many of these stores include Supercenters, Sam’s Clubs, and smaller Neighborhood Market centers. Wal-Mart primary focus is on based on six strategic merchandise units: grocery, entertainment, hardlines, health and wellness, apparel, and items for the home (Mergent). Since the begininning of the company in 1962, Wal-Mart has skillful continued growth and prosperity. Its long standing history of profitability and prominence thoughout North America, are key indicators of its future success.
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.
Wal-Mart is the world's largest retail and departmental store chain. Having business operations in 27 countries with 69 different brand names, Wal-Mart is able to serve a huge number of customers per day. Wal-Mart is the fastest growing and the most successful retail brand in the world. The factors which make it the strongest brand in its industry include large customer base, sound financial strength, strong brand image, and huge supply chain network. Wal-Mart has certain weaknesses in its operations and business setup like low acceptability of certain products, high employee turnover, and less recognition of newly introduced brands. These weaknesses can be overcome by availing attractive opportunities from the market and investing more in the most profitable areas. Wal-Mart faces the biggest threat from its competitors and ever-changing customer preferences.
Analyzing Wal-Mart's annual report provides a positive outlook on Wal-Mart's financial health. Given the specific ratios and its comparison to other companies in the same industry, Wal-Mart is leading and more than likely will continue its dominance. Though Wal-Mart did not lead in all numbers, its leadership and strong presence of the market cements the ongoing success of the company. The review of the current ratio, quick ratio, inventory turnover ratio, debt ratio, net profit margin ratio, ROI, ROE, and P/E ratio all indicate an upbeat future for the company. The current ratio, which is defined as current assets divided by current liabilities, is a measure of
Wal-Mart is arguably the most dynamic corporation in the last 50 years in the United States, if not the world. Arising from its beginnings in Bentonville, Arkansas, it has grown to over 4,400 discount stores, super centers and corner markets worldwide. Wal-Mart continues to expand despite public criticism of its labor practices as well as complaints about their treatment of competitors. The many strengths of Wal-Mart, like their low cost production and marketing practices, will aid Wal-Mart as it continues to grow in the retail
Based on the information that I found on the financial statements, Wal-Mart Stores, Inc. is currently on the rise. They have increased their cash flow while decreasing their long-term debt. Their
Operating profit/ Sales: Wal-Mart has shown high growth in operating profit/ sales ratio majorly owning to its innovative supply chain cutting down operating expenses.