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Walmart Finacial Analysis

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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

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