Assignment 1 Financial Analysis Paper
Assignment 1: Financial Analysis
Financial Accounting for Managers Acc 556
May 17, 2015
Walmart is the largest brick-and- mortar retailer in the world. In 2014 Walmart had 11,000 retail units under 71 banners in 27 countries. Walmart employs around 2.2 million associates around the globe with 1.3 million just in the U.S. alone. ‘’In the fiscal year ending January 31, 2015 Walmart delivered net sales of more than $288 billion, an increase of 3.1 percent ‘’ (Walmart 2015 Annual Report pg .7). Walmart delivered ‘’consolidated net sales growth of $482.2 Billion which allowed Walmart to return $7.2 Billion to the shareholders through dividends and share purchases’’ (Soni, P. Market Realist, 2015 pg.1). Walmart is a growing corporation …show more content…
One financial issue is their liquidity ratio. Fiscal year ending January 31, 2015 their liquidity ratio ‘’which measures the short-term ability of the company to pay maturing obligation and meet unexpected needs for cash’’ (Kimmel, P.D. Financial Accounting: Tool for Business Decision Making.2015, Pg 59.) Walmart Current ratio as of 1/31/2015 was 0.97, this is calculated by Current Assets/Current Liabilities= Current ratio which in Walmarts financial data (USD$ in millions) was 63,278 Current assets/ Current liabilities 65,272, in 2014 it was 0.88 in 2013 it was 0.83. Their liquidity has improved from 2013 to 2015.Thier competitors like Target had a 1.20 current ratio. Walmart Quick ratio which is calculated by Quick ratio=Total quick assets/ Current liabilities = (USD $ in millions) 15,913/ 65,272= 0.24. Walmart quick ratio has climb slightly from 2014 which was 0.20. Target had a ratio of 0.19. The last ratio is Cash which is calculated by cash ratio=Total cash assets/Current liabilities= (USD in millions) 9,135/65,272=0.14 which has increased from 0.11 in 2013 to .014 in 2015. Walmart Current ratio is trending higher than years before; this indicates that they are able to pay their short – term debts. Walmart seems to right in line with industry …show more content…
Despite their sales growth through the year, their gross profit rate also declined for Walmart’s US operations. ‘’This declined seems to stem from the company’s initiative on its meat products and prescription plan for Medicare. The rollout of the Plus Cash Reward program and a somewhat poor merchandising mix also impacted results’’ (Soni, P. Market Realist.2015.Pg.12). Walmarts operating margin also took a hit and declined slightly to 5.6%. Higher healthcare and utility cost were the primary reason for the drop. Their net margin stayed the same from last year of 3.4%. Looking at their stock analysis they seem to be about the same percentage for the last five (5) years. Walmart has its good years and bad, but they are still
Financial Accounting for Managers Acc 556
May 17, 2015
Walmart is the largest brick-and- mortar retailer in the world. In 2014 Walmart had 11,000 retail units under 71 banners in 27 countries. Walmart employs around 2.2 million associates around the globe with 1.3 million just in the U.S. alone. ‘’In the fiscal year ending January 31, 2015 Walmart delivered net sales of more than $288 billion, an increase of 3.1 percent ‘’ (Walmart 2015 Annual Report pg .7). Walmart delivered ‘’consolidated net sales growth of $482.2 Billion which allowed Walmart to return $7.2 Billion to the shareholders through dividends and share purchases’’ (Soni, P. Market Realist, 2015 pg.1). Walmart is a growing corporation …show more content…
One financial issue is their liquidity ratio. Fiscal year ending January 31, 2015 their liquidity ratio ‘’which measures the short-term ability of the company to pay maturing obligation and meet unexpected needs for cash’’ (Kimmel, P.D. Financial Accounting: Tool for Business Decision Making.2015, Pg 59.) Walmart Current ratio as of 1/31/2015 was 0.97, this is calculated by Current Assets/Current Liabilities= Current ratio which in Walmarts financial data (USD$ in millions) was 63,278 Current assets/ Current liabilities 65,272, in 2014 it was 0.88 in 2013 it was 0.83. Their liquidity has improved from 2013 to 2015.Thier competitors like Target had a 1.20 current ratio. Walmart Quick ratio which is calculated by Quick ratio=Total quick assets/ Current liabilities = (USD $ in millions) 15,913/ 65,272= 0.24. Walmart quick ratio has climb slightly from 2014 which was 0.20. Target had a ratio of 0.19. The last ratio is Cash which is calculated by cash ratio=Total cash assets/Current liabilities= (USD in millions) 9,135/65,272=0.14 which has increased from 0.11 in 2013 to .014 in 2015. Walmart Current ratio is trending higher than years before; this indicates that they are able to pay their short – term debts. Walmart seems to right in line with industry …show more content…
Despite their sales growth through the year, their gross profit rate also declined for Walmart’s US operations. ‘’This declined seems to stem from the company’s initiative on its meat products and prescription plan for Medicare. The rollout of the Plus Cash Reward program and a somewhat poor merchandising mix also impacted results’’ (Soni, P. Market Realist.2015.Pg.12). Walmarts operating margin also took a hit and declined slightly to 5.6%. Higher healthcare and utility cost were the primary reason for the drop. Their net margin stayed the same from last year of 3.4%. Looking at their stock analysis they seem to be about the same percentage for the last five (5) years. Walmart has its good years and bad, but they are still