Analysis Of The Walgreen Co. 's Financial Performance During The Periods Of 2012

Analysis Of The Walgreen Co. 's Financial Performance During The Periods Of 2012

Length: 1056 words (3 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Spring 2016

Walgreen Co.

The following represents an analysis of the Walgreen Co.’s financial performance during the periods of 2012 through 2014. In preparing the analysis, historical financial statements were reviewed and financial ratios calculated based on those, which are included in Exhibits to this analysis. The calculations are utilized to provide additional insight regarding the ability of Walgreen Co.’s leadership to effectively operate the business. Leadership’s strategic plan for the company, along with comparative information of competitors within the industry, are important elements to consider in addition to the information provided herein.
While sales are increasing, and operating profit margin is increasing during the period, there are items within the financial statements that merit further analysis. High level analysis of the balance sheet indicates that Walgreen is able to meet current liabilities with current assets. However, upon further analysis of the inventory, the historical financial statements indicate a dependency on inventory conversion to meet these current obligations. Also, the leverage is low, which provides opportunity to finance expansion, capital expenditures, or potential acquisitions. Walgreen has access to capital through the issuance of stock as well. However, rates of return are trending down during the period of 2012 through 2014. Below is further evidence to support these observations.

Liquidity Ratios

As shown in Exhibit 2, the current ratio, as well as the quick ratio is improved from 2012 to 2014. The improvement in the current ratio during the period demonstrates an increase in the company’s ability to meet its current obligations. The ratio of 1.4, up from 1.2, means that Wal...


... middle of paper ...


...ixed, which is seen in Exhibit 3 in the common size view. Fixed assets have decreased from 36% to 33% of total assets. The details of whether capital expenditures are being reduced as part of the strategy, or is there another reason that investment in property, plant, and equipment is being reduced when considering the balance sheet structure. Also, in the same Exhibit, there is a line item labeled as “other assets,” which has increased from 31.9% to 34.1% of total assets. Or, as shown in the historical financial statements on Exhibit 1, an increase of $2 billion. Given the significance of the investment in this category, the type of purchases should be examined. The ability of Walgreen Co. to provide value from the investment, as well as the marketability of the assets represented in this category is an important factor in assessing the performance of the company.


Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay on The 2012 Dilemma and the Media

- It hasn’t been even ten years and here we are all over again. For some reason the human race can not wait to be extinct, and we are already on track for another “Y2K” scare. Every time you turn on the History Channel there is another new program telling us how the world as we know it will end in a little more than two years, sending every viewer into a state of shock, and turning every Tivo into a doomsday prediction recorder from then on out. Now, I am all about putting out as much information about our everyday world out there for all to bear witness, but I also believe in unbiased coverage of events....   [tags: 2012, media, ]

Better Essays
972 words (2.8 pages)

Case Study : Walgreen Co. Essay examples

- Introduction to company Walgreen Co., is one of the largest drugstores in the United States that was founded in 1901 in Chicago, Illinois. The company’s common stock is also listed in Chicago as well as New York. Where they received their state of incorporations in 1909. Their headquarters are located in Deerfield, Illinois. The President and Chief Executive Officer is Gregory D. Wasson and the Executive Vice-President and Chief Financial Officer is Timothy R. McLevish. The company is considered publicly traded, and is listed number 35 on the Fortune 500 list....   [tags: Balance sheet]

Better Essays
1169 words (3.3 pages)

Essay about Accounting Standards And Financial Performance

- Overview Accounting gives companies, investors, regulators and others with a standardized way to explain the financial performance of an entity. Accounting standards present preparers of financial statements with a set of rules that they have to follow when preparing an entity’s accounts, making sure this standardization is across the market (Robert 2008). Many Companies are required to publish their financial statements in accordance with the relevant accounting standards. To simply International Financial Reporting Standards (IFRS) is one set of accounting standards, which have been established and maintained by the IASB with the purpose of those standards being efficient of being useful...   [tags: International Financial Reporting Standards]

Better Essays
721 words (2.1 pages)

The 2012 Global Financial Crisis Essay

- The 2008 Global Financial Crisis was the most severe economic disaster the world has faced since the Great Depression of 1929. The root cause of the GFC cannot be traced back to a single event but rather, a culmination of events such as debt accumulation, low interest rates, inappropriate risk assessments and the ill-informed decisions to purchase assets with rising prices through debt (Taylor, 2013). Given the rapidly changing nature of the financial markets, increasing globalisation and uncertainty about the future, it is misinformed to believe that the GFC was a once-in-a-hundred-years event and will not occur in the near future....   [tags: Subprime mortgage crisis, Debt, Investment]

Better Essays
813 words (2.3 pages)

Essay about Boeing 's Financial Position And Performance

- Boeing’s Financial Position and Performance To gain an adequate understanding of The Boeing Company’s financial and performance status within the aerospace and defense industry an examination of the financial statement figures and ratios is vital. Boeing’s financial position in relation to the industry standard is strong. For example, Boeing’s net income of $3,715 million is on par with its competitors - such as Lockheed Martin with a net income of $3,717 million. Within this examination Boeing is only - out ranked by the United Technologies Corporation with a net income of $7,204 million....   [tags: Financial ratio, Financial ratios, Balance sheet]

Better Essays
1476 words (4.2 pages)

The Business and Financial Performance of Lenovo Group Ltd. over a Three Year Period

- The Business and Financial Performance of Lenovo Group Ltd. over a Three Year Period 1.Introduction 1.1 Reasons For Choosing The Topic The main reasons for me to choose this topic are as follows: A company’s financial statement provide essential financial information that will help potential investors to better understand the company’s financial performance.Financial information are also significant for company’s management to analysis the company’s financial position.In the coming future I intend to be a perfessional accountant,therefore I need to practice and learn more about analysis skills and knowledge....   [tags: financial statement, SWOT analysis]

Better Essays
2289 words (6.5 pages)

Essay on Financial Statements Of A Company 's Annual Performance

- “Companies’ Annual Reports have become increasingly complex over the years, sacrificing understandability for complexity”. An annual report is a detailed report for shareholders and other business partners on a company’s activities throughout the year. It is a legal requirement from the Companies Act 1985/9 that requires companies to publish their annual report and accounts. Its purpose is to present a true and fair view of the company’s annual performance and provide financial statements that are useful to existing and potential investors, shareholders, lenders and other creditors....   [tags: Financial statements]

Better Essays
1067 words (3 pages)

Will the World Really End in 2012? Essay

- December 21, 2012: This date has many people wondering why scientists and researchers assume the world will come to an end. Generally, everyone is captivated on the concept of the world’s execution. Hollywood even created a film based on 2012. But is the world really going to come to an end. Are we really going to die because of some calendar that is almost done. Is a giant flare from the sun going burn us all, or an enormous volcanic eruption from a super volcano going to destroy the earth. Considering how we were to have a meltdown in 2000, it is unlikely the world will end....   [tags: 2012, world ending,]

Better Essays
997 words (2.8 pages)

Essay on Financial Ratios And Financial Statements

- Financial ratios are instrumental in the process of understanding financial statements. Without a method to compare financial statements among different firms, these arbitrary numbers are insignificant in setting a benchmark nor able to reflect a company’s financial standing. Specialized financial ratios help analysts interpret the myriad of numbers in financial statements (Parrino, Kidwell, & Bates, 2012). There are five widely accepted types of financial ratios that a firm utilizes to gain a meaningful understanding of a financial statement: short-term liquidity ratios, efficiency ratios, leverage ratios, profitability ratios, and market-value indicators....   [tags: Financial ratios]

Better Essays
1140 words (3.3 pages)

Financial Performance And Status From A Balance Sheet Perspective Essay

- Question One: ITStaffing’s financial performance and status from a balance sheet perspective ITStaffing has had a strong financial position between 2009 and 2011. One of the factors that support this is the results of the current ratio for the three years. Current ratio is a liquidity measure which shows the ability of a company to settle its current liabilities using its current assets. (Young and Cohen, 2013). It is computed as current assets divided by current liabilities. In 2009, 2010 and 2011, the current ratio of ITStaffing was 4.96, 7.79 and 9.21 respectively....   [tags: Financial ratios, Revenue]

Better Essays
1309 words (3.7 pages)