Analyzing Financial Statements

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Analyzing the financial statement is essential before making any investment decision. When an investor purchases a stock they are becoming the owner of the company. An investor has to understand about the business and need to analyze the financial statement before making any investment in order to protect the amount invested and to avoid losses (Hudspeth, 2012). Every investor makes investment with an intention to earn higher return; this is possible only if the investor understands about the current financial health of the company.
Financial statements provides for more information about the financial condition, performance and position of the company (Financial Review, n.d). Financial statement will provide an outline about the current business situation, past trend, any improvement or decrease in the performance of the company. This will enable the investor is understanding about the future business trend, because an investor can earn higher returns only if the company generates higher revenue and cash flow. Continuous monitoring of the company will enable the investor in understanding about the financial situation like percentage of debt, any risk like liquidity or bankruptcy and so on which is vital for all investors (Krantz, 2012).
Walmart is one of the world’s leading retailers and is currently operating in more than 27 countries with about 10,700 retail stores and serving 245million of customers every week (Walmart, 2013). First the financial performance of the company has to be analyzed which is the income statement of the company. Growth in the revenues is always positive but the percentage of growth differs every year (Morningstar, n.d.). There are more fluctuations only in the non-operating activity of the company th...

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...n.d.). Balance Sheet for Wal-Mart Stores Inc (WMT) from Morningstar.com. Retrieved March 3, 2014, from http://financials.morningstar.com/balance-sheet/bs.html?t=WMT®ion=usa&culture=en-US&ownerCountry=USA

Morningstar (n.d.). Income Statement for Wal-Mart Stores Inc (WMT) from Morningstar.com. Retrieved March 3, 2014, from http://financials.morningstar.com/income-statement/is.html?t=WMT®ion=usa&culture=en-US&ownerCountry=USA
Morningstar (n.d.). Cash Flow for Wal-Mart Stores Inc (WMT) from Morningstar.com. Retrieved March 3, 2014, from http://financials.morningstar.com/cash-flow/cf.html?t=WMT®ion=usa&culture=en-US&ownerCountry=USA

Walmart (2013). Walmart Annual Report 2013. Retrieved from http://c46b2bcc0db5865f5a76-91c2ff8eba65983a1c33d367b8503d02.r78.cf2.rackcdn.com/88/2d/4fdf67184a359fdef07b1c3f4732/2013-annual-report-for-walmart-stores-inc_130221024708579502.pdf
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