Walmart vs Target Financial Analysis

5129 WordsAug 24, 201321 Pages
FINANCIAL ACCOUNTING REPORT – TEAM 8 CASE ANALYSIS OF WAL-MART INC AND TARGET CORPORATION SUBMITTED BY: Amaresh Chandra Panda K H Gupta Mehul Shah SNDS Ramanish Sadhu Upasana Patra Table of Contents EXECUTIVE SUMMARY ....................................................................................................................... 2 RATIO ANALYSIS ................................................................................................................................ 2 PROFITABILITY RATIOS....................................................................................................................... 2 NET MARGIN…show more content…
RATIO ANALYSIS PROFITABILITY RATIOS NET MARGIN Net Margin is the ratio of net profits to revenues of a company. It is used as an indicator of a company’s ability to control its costs and how much profit it makes for every dollar of revenue it generates. Net Margin is calculated using the formula: Net Margin = (Net Profit / Revenues ) * 100 Net margins vary from company to company with individual industries having typically expected ranges given similar constraints within the industry. For example, a retail company might be expected to have low net margins while a technology company could generate margins of 15-20% or more. Companies that increase their net margins over time generally see their share price rise over time as well as the company is increasing the rate at which it turns dollars earned into profits. 2 A snapshot of the Net Margins for Wal-Mart Stores Inc. is shown below: Net Margin Wal-Mart 2010 3.90% 2011 3.50% 2012 3.60% Table 1 - Net Margins for Wal-Mart Inc. Wal-Mart Stores Inc.'s net profit margin deteriorated marginally from 2010 to 2011 but then slightly improved from 2011 to 2012. Net Margin Wal-Mart Target Industry Average 2010 3.90% 4.30% N.A 2011 3.50% 4.20% N.A 2012 3.60% 4.10% 3.3% Table 2 - Net Margins for Wal-Mart Inc. and Target Corp. The Net Margin’s for Target Corp. has also

More about Walmart vs Target Financial Analysis

Open Document