Financial Statment for Wal-Mart Stores Inc.

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Comparing the financial performance between Wal-Mart and Amazon by the metrics :

Return on Equity Ratio(ROE):
This ratio demonstrates how efficiently the business is utilizing and deploying the equity, either invested in the business or generated by the business, to generate profits. ROE= Net income/ avg shahloder equity

ROE in Wal-Mart stores is: 2.726840403
A ration of 272.6% would show the business is earning $2.73 in pretax or operating profit for each $1of equity employed in the business ROE in Amazon is: 0.171580749(2009)
A ration of 17.2% would show the business is earning $0.172 in pretax or operating profit for each $1 of equity employed in the business

It shows the percentage of profits earned for each dollar of equity in the business. This is essentially the return for the money and time business owners and their investors have invested in the business. Further, the higher return on equity ratio is the better. As it shows the Wal-Mart stores ratio is higher than the Amazon's this indicate that Wal-Mart is better than Amazon in this metrics.

Return on Assets ratio (ROA):
This ratio demonstrates how efficiently the business is utilizing and deploying business assets to generate profits (not sales but overall operating profits).

ROA = Earning before interest / average total assets

ROA in Wal-Mart stores is: 0.089552578

A ratio of 9.00% would show the business is earning $0.09 in pretax or operating profit for each $1 of assets in the business

ROA in Amazon is: 0.066907336
A ratio of 6.7% would show the business is earning $0.067 in pretax or operating profit for each $1 of assets in the business

Shows the percentage of profits earned for each dollar of assets in the business. Management's main task in any business is to employ all the assets in the business in the most efficient manner to generate the greatest profits. The bigger this ratio, the better for the business. And as it shows, the Wal-Mart stores ratio is higher than the Amazon's; this indicates that Wal-Mart is better than Amazon in this metrics.

Account Payable turnover ratio (APT):

This ratio demonstrates how efficiently the business is managing and paying its bills. Businesses want to take as much time as they can to pay bills as these payments are essentially taking cash flow out of the business. However, this should never be done if it costs the business to do so - e.g. late payment fees or added interest. APT= Cost of goods sold/ account payable

APT in Wal-Mart stores is: 6.026844708

A ratio of 6.03 designates that obligations (payables) are being paid 6.02 times per period or every 60.53days (if the period of the Cost of Goods in question is one year or 365 days).

APT in Amazon is: 2.577131993
A ratio of 2.58 designates that obligations (payables) are being paid 2.58 times per period or every 141.47 days (if the period of the Cost of Goods in question is one year or 365 days).

The slower the business can pay its obligations without penalty, the better for the business as more cash stays in the company longer - cash which can be used to generate more business, sales or profits. Thus, the smaller the ratio, the slower cash is leaving the business - providing more time to convert those assets, purchased by these payables, to generate more revenue for the business. The longer cash can be held in the business, the better for the business. The Amazon ratio is better than Wal-Mart stores.

Account receivable Turnover Ratio (ART):

This ratio demonstrates how efficiently the business is managing and controlling its accounts receivables. Accounts receivables are sales that have not turned into cash yet. The faster the business can get cash for these sales, the faster it can pay its bills and realize its profit. Holding accounts receivables is essentially providing free credit to your customers and if not managed properly can adversely affect operations and profits.

ART = sales revenue/ accounts...
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