Assignment 1 Additional Background Information of Wal-Mart in 2005: * Sales Revenue: In 2005, Wal-Mart had $312.4 billion in sales, more than 6,200 facilities around the world—including 3,800 stores in the United States and 2,800 elsewhere, employing more than 1.6 million "associates" worldwide. * Other Innovations: Later in October Wal-Mart announced it would implement several environmental measures to increase energy efficiency. The primary goals included spending $500 million a year to increase fuel efficiency in Wal-Mart’s truck fleet by 25% over three years and double it within ten, reduce greenhouse gas emissions by 20% in seven years, reduce energy use at stores by 30%. * Board Affairs: Tom Coughlin (Vice …show more content…
Analysis of Balance Sheet: Liquidity ratio= current assets/current liabilities=38491/42888=0.8974 Wal-Mart’s ability to meet its short-term obligation is relatively weak. The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. However, marl-mart huge size requires much more debts to finance it operations. Wal-Mart’s 0.89 is not the best financial position, because the company with huge warehouse of inventory and other current asset has a longer inventory turnover than Target. Solvency ration=total debt/total equity=23669/49396=0.479 Wal-Mart’s ability to avoid financial risks and financial leverage is strong. A low debt/equity ratio generally means a company has not been aggressive in financing its growth with debt. Wal-Mart’s firm financial position shows its powerful competency in the retail market, and a positive upward trend of expanding marketing shares. Analysis of Cash Flow: Wal-Mart is one of the largest retailers in the world; the majority of cash income comes from the continuing sales operations. And in 2005, Wal-Mart spent 8 times money in international operations than year 2004. Wal-Mart’s investments outside North America have had mixed results: its operations in the United Kingdom, South America and China are highly successful, while it was forced to pull out of Germany and South Korea when
Within less than 30 years, Wal-Mart had transformed from a small rural retailer in Arkansas into the largest retailer in the U.S. In order to continue this rapid growth, the company had started to pursue international expansion grounded in the belief that the firm’s business model of offering quality products at low prices and great customer service would appeal to consumers everywhere around the world (p.8)[1]. China was of particular interest in going international as Wal-Mart’s top management held the opinion that it was the only market in which the firm’s success story in the U.S. could be repeated (p.2/8). However, in 2005 (nine years after 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
While inaccurate accounting can cause misleading information about the company, every successful company should develop an income statement and balance sheet when monitoring financial growth. Also, formulating a horizontal and ratio analysis creates an accurate trend of the company spending behavior and debt-to-ratio venerability. A balance sheet can be considered as the bloodline of the company, allowing a quick view of financial fluency which could be attractive to outside investors. Last but not least, the income statement presents a hard result of gains, liabilities, revenues and debt within a yearly
In just over half a century Wal-Mart’s global reach had gone from just one store all the way to 11,450 stores in 27 countries. This is one way of saying that Wal-Mart is a multinational company and that its globalisation is only limited by its host’s country. The current increase in globalisation has accelerated due to the rapid growth of multinational companies such as Wal-Mart.
Analysis for Business Policy: Strategic Management. Instructor: Dr. M. Reitzel, DeVry University, February 2007, Austin, TX. Members of the Team: Marcus Bedford Jon Cable Wayne Oulicky Constince Sanchez
If you glance at the financial ratios in the income statement you would see that Walmart is operating at a high capacity. The company’s profit margins although high are declining at time passes by. After looking at Walmart’s liquidity, the company is in a great position, it can pay off its debts without much trouble. Liquidity ratios include current ratio and quick ratio. If you look at the financial records you would see that current ratio has been on the rise since 2013. The liquidity position that Walmart is currently in indicates that company has not enough money to meet its current obligations. This means that Walmart is ideal with a company its size, if you look at the total debt ratio it shows that Walmart
Shoppers Drug Mart Limited is not in a good financial position in terms of liquidity and being able to pay out its liabilities. Over the three above indicated fiscal periods, Shoppers had a current ratio on average of 1.54, which means that it has $1.54 of current assets available to cover each $1 of current liabilities. The higher the current ratio is for a firm, the better position the company’s liquidity position is. Over the course of a year or over the course of the company’s operating cycle (whichever is longer), resources would be tight for Shoppers but they would be able to pay out their current obligations as the current ratio is greater than 1. In the time period less than a year or the operating cycle, repayment of the firm’s liabilities may prove to be challenging. The quick ratio also measures a company’s liquidity position but there
The graph above shows a current ratio. It is used for measuring an ability of the company to pay off
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
Wal-Mart’s sheer size gives it unrestrained economic power which allows it to drive down costs in the retail and manufacturing sectors and to enact its own standards with regards to its work force.
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
Ans:Wal-Mart,Inc runs a chain of large, discount department stores.it is the world’s largest public corporation by revenue. Walmart is the largest private employer and the largest grocery retailer in the United States. Walmart is one of the best known industries all over the world. Its concentration of a single business strategy is the basis of its success over the decades by this strategy without having to rely upon diversification to sustain its growth and competitive advantage. The leading marketing strategies of Wal-Mart are low prices, service and smile. However by adapting this strategy, it has risked itself by putting all of a company’s egg in one industry basket. While its global strategy worked elsewhere, the results were bad in Germany and Korea that Wal-Mart withdrew from those countries.
If this ratio is high means company owns too many debts which may decrease their
Wal-Mart Stores Inc. helps individuals around the globe spare cash and live better - at whatever time and anyplace - in retail locations, online and through their cell phones. Every week, more than 245 million clients and individuals visit our almost 11,000 stores under 65 flags in 28 nations and e-trade sites in 11 nations. With financial year 2015 net offers of $482.2 billion, Wal-Mart utilizes 2.2 million partners around the world. (Wal-Mart Corporate) Wal-Mart is a superpower in the business world and has been that way for 50+ years. Understanding how it got to this point and how it has maintained its successful business model starts with its
Wal-Mart is a company which operates in the service sector, more specifically in the “Discount, Variety Stores/Retail” industry. The company’s superior performance is demonstrated through the fact that it was America’s largest company (in terms of revenue) in 2002, and the reputation of the company is reflected in the opinion of “Fortune” who have identified Wal-Mart as one of the world’s most admired companies. In 2004 Wal-Mart had been hiring 1.4 million employees – making it the largest corporation in the world. Wal-Mart’s share prices have also been stable at time of stock market volatility. There are