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Business level strategy of walmart
Walmart financial statement analysis
Wal mart analysis case
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Wal-Mart Evaluation Report Analyzing Wal-Mart's annual report provides a positive outlook on Wal-Mart's financial health. Given the specific ratios and its comparison to other companies in the same industry, Wal-Mart is leading and more than likely continue its dominance. Though Wal-Mart did not lead in all numbers, its leadership and strong presence of the market cements the ongoing success. The review of the current ratio, quick ratio, inventory turnover ratio, debt ratio, net profit margin ratio, ROI, ROE, and P/E ratio all indicate an upbeat future for the company. The current ratio, which is defined as current assets divided by current liabilities, is a measure of how much liabilities a company has compared to its assets. Wal-Mart in the year of 2007 had a current ratio of .90, and as of January 2008 it had a current ratio of .81. The quick ratio, which is defined as current assets minus inventory divided by current liabilities, is a measure of a company's ability pay short term obligations. Wal-Mart in the year of 2007 had a quick ratio of .25, and as of January 2008 it had a ratio of .21. Both the current ratio and quick ratio are a measure of liquidity. Wal-Mart is not as liquid as its competitors such as Costco or Family Dollar Stores Inc. I believe the reason why Wal-Mart is not too liquid is because they are heavily investing their profits for expansion and growth. Management claims in their financial report that holding their liquid reserves in other currencies have helped Wal-Mart hedge against inflationary pressures of the US dollar. The next ratio to look at is the inventory ratio which is defined as the cost of sales divided by average inventory. In the year of 2007, Wal-Mart’s inventory ratio was 7.68, and as of January 2008 it was 7.96. Wal-Mart has a lot of sales therefore it doesn’t have too much a problem of holding too much inventory. Its competitors have similar ratios though they don’t have as much sales as Wal-Mart. Wal-Mart’s ability to sell at lower prices for same quality, gives them the edge against its competition. As of the year 2007, Wal-Mart had a debt ratio of .58, and as of January 2008, it had a debt ratio of .59. The debt ratio is calculated by dividing the total debt by its total assets. Wal-Mart has a lot more assets than it does debt so Wal-Mart is not overleveraged.
Wal-Mart represents the sickness of capitalism at its almost fully evolved state. As Jim Hightower said, "Why single out Wal-Mart? Because it's a hog. Despite the homespun image it cultivates in its ads, it operates with an arrogance and avarice that would make Enron blush and John D. Rockefeller envious. It's the world's biggest retail corporation and America's largest private employer; Sam Robson Walton, a member of the ruling family, is one of the richest people on earth. Wal-Mart and the Waltons got to the top the old-fashioned way: by roughing people up. Their low, low prices are the product of two ruthless commandments: Extract the last penny possible from human toil and squeeze the last dime from its thousands of suppliers, who are left with no profit margin unless they adopt the Wal-Mart model of using nonunion labor and shipping production to low-wage hellholes abroad." (The Nation, March 4th 2002 www.thenation.com/doc.mhtml?i=20020304&s=hightower).
My objective is to analyze the two retail giants’ methodology to satisfy and maintain customer although that I anticipate Wal-Mart’s to be a better buy than Costco because of the gargantuan scale of Wal-Mart has constructed its commerce on saving the customer Our decision is to invest in Wal-Mart. The choice for Wal-Mart is on the basis that their functional-level strategy is really robust, nevertheless of the fact that they do not treat their employees well. The fact remains that they are financially stronger, have a better business-level strategy, and have a corporate-level strategy than Costco. Costco v. Wal-Mart: What must we learn about them?
In Wal-Mart: The Bully of Bentonville author Anthony Bianco explains the love-hate relationship of consumers and the corporation. First, I must say that this was an enjoyable read! All of the elements and statistical data that a historian looks for are present B Bianco=s anti-Wal-Mart slant notwithstanding. Wal-Mart tells the story of master retailer Sam Walton B who himself may have been the bully of Bentonville B and the Wal-Mart corporation. Bianco recounts the elements which made Walton so loved and innovative (e.g., omni-directional integration, self-service checkout and automated performance monitoring) and his corporation so reviled. He also delves into Wal-Mart=s battles against unionization, their fair trade practices and importation of foreign-made goods. Finally, he explores the real sociological cost of Wal-Mart=s low prices.
The purpose of this business report is to gain familiarity with Wal-Mart and to learn about the different aspects that make Wal-Mart a successful company. This report gives an in-depth analysis of the company history, services and products provided, the company philosophy, business methods, organizational structure, and financial and competitive analysis.
Since January 31, 2004, the investment banker for Wal-Mart has been Moody's investor services. Wal-Mart plans to refinance for their long term dept with Mood's Investor Services and also a few other investment banking for other corporate purposes that are not mentioned. Wal-Mart also plans to bowwow 3.3 billion dollars and an additional 1.1 billion for commercial paper By January 31, 2004 the, Wal-Mart had already established a 5.1 billion dollar lines of credits from 77 different banking industries and investment and used up approximately 145 million in the production of commercial paper. During the same time period Wal-Mart had 6 billion dollar debt of securities under a shelf registration regulation which derived from the SEC. Wal-Mart sold 1.25 billion in notes and maturity. The notes bear an interest of 4.1.25 % and mature by February 2011. The total quantity of notes allowed to be sold to is up to 4 billion.
Overall, Horizontal analysis and financial ratios are essential factors that businesses use to monitor its liquidity. Therefore, in order to improve Apple’s ratios and profitability, the company needs to implement a strategy to increase the company’s liquidity. Business owners or managers should monitor current ratio and acid test ratio as these ratios help us to ensure the company has the proper liquid assets to pay current liabilities, to stay in operations and to expand the company. As we noted in our acid test ratio and current ratio for the company, we show a lower ratio for acid test ratio than the current ratio, which means that the company’s current assets rely on inventory. Therefore, the company needs to convert old inventory into
Looking at the 2016 financial statements of the two retail giants Target and Walmart is extremely interesting. Outside of the financials of the reports, both statements include a title page that contains the company logo, as well as a letter from the CEO summarizing progress on past goals and vision for future goals. They each include a page that lists a Board of Directors and Management, shareholder information, stockholder information, and legal information. Visually, the Walmart report is more visually appealing, as it includes multiple images and graphics, various colors, and uses a blue font, versus the Target report, which primarily uses a black font, uses a red font for titles and has few images and graphics. With that said, the Target
Wal-Mart’s competitive environment is quite unique. Although Wal-Mart’s primary competition comes from general merchandise retailers, warehouse clubs and supermarket retailers also present competitive pressure. The discount retail industry is substantial in size and is constantly experiencing growth and change. The top competitors compete both nationally and internationally. There is extensive competition on pricing, location, store size, layout and environment, merchandise mix, technology and innovation, and overall image. The market is definitely characterized by economies of scale. Top retailers vertically integrate many functions, such as purchasing, manufacturing, advertising, and shipping. Large scale functions such as these give the top competitors a significant cost advantage over small-scale competition.
On to Walmart one of the biggest supply retail chains in the world and their social responsibility takes a radical turn. Under all that ‘save money, live better’ is a world that not many people see or experience. Walmart uses differesnt tactics to hide, manipulate, and operate under the scrutiny of the public. With such things as the environment, giving back to the community, responsible resourcing the wrongs have succeeded in being in the forefront of what consumers, employees, and the world sees. By setting up a smoke screen Walmart portrays themselves as a great company however, evidence shows the opposite.
Wal-Mart Stores Inc. is in the discount, variety stores industry. It was founded in 1945, Bentonville in Arkansas which is also the headquarters of Wal-Mart. Wal-Mart operates locally as well as worldwide. It operated 1209 discount stores, 1980 super centers, and 567 Sam’s Club by January 31, 2006. It has also extended its operations to many international countries. It runs its retail stores in two forms: Sam’s Club and Wal-Mart Stores. The Sam’s Club sells assorted product lines such as hardwares, electronics, jewelry, and to mention a few. The Wal-Mart stores also offer similar products in addition to the following: health and beauty products, apparel for women, men and children, household appliances etc (www.yahoo.finance.com). The Vision Statement, Mission Statement, Values and Code of Conduct, Corporate Governance: Directors, Executive Management, Committees and Stakeholder will be the key elements that will discussed in this report as it relates to Wal-Mart. In addition to that, the major trends in the general/macro environment and industry will be analyzed.
Wal-mart Stores Inc. and Procter & Gamble’s adopted the notion of continuous replenishment to implement an IT-dependent strategic initiative which features real-time scanner data transferring between Wal-mart and Procter & Gamble through its satellite-based network infrastructure. As a result, Wal-mart will be able to provide low cost products to its customers. Do you think Wal-mart can sustain this competitive advantage? Why do you think Wal-mart can or cannot sustain its competitive advantage? Which barriers to erosion can or cannot prevent the imitation and how?
Starbucks’ solvency ratios provide valuable insight into whether the company is generating sufficient cash flow to meet short-term and long-term obligations. At the end of 2014, Starbucks current assets of $4169 million and current liabilities of $3039 million produced a current ratio of 1.37. During this same period, Starbucks had quick assets of $2474 million (cash of $1708 million + short-term investments of $135 million + accounts receivable of $631 million) with current liabilities of $3039 million resulting in a quick ratio of 0.81. These ratios imply that Starbucks was reasonably liquid at the end of 2014 with $1.37 in current assets and $0.81 in quick assets for every $1 in current liabilities. In 2013, Starbucks had a current ratio of 1.02 and a quick ratio of 0.71 and the previous year the company’s current ratio was 1.90 with a quick ratio of 1.14. This data shows that Starbucks’ current ratio and quick ratio decreased considerably from 2012 to 2013 indicating a reduction in liquidity. Starbucks liabilities increased dramatically in 2013 because of an accrued
Wal-Mart has difficulty developing and implementing a process that can improve the product material quality since there are so many vendors, manufacturers and international companies involved. They need to implement a set of standards that every company needs to adhere to by setting acceptable standards that must be met across the board whether the company is a local business or a foreign company. Most of the material defective products come from overseas. The process that can afford the opportunity to fix this dilemma is the process known as Six Sigma. This method is designed to manage process variations which cause defects. The concept of this process is to take an already established defect variation and use a step-by-step chain of events that will work towards managing variation in order to eliminate the established acceptable defects. The purpose behind selecting this process is because Six Sigma has the ability to provide high-performance, reliability, and value to the products Wal-Mart purchases which offers a better quality product to the customer. The process was originated by Bill Smith while working at Motorola in 1986. The process was initially defined as a metric for measuring defects and improving quality which would set precedence and standardize defective measures for all vendors and suppliers for Wal-Mart.
The percentage of merchandise flowing through distribution centres is higher for Wal-Mart compared to competitors. These features permit high efficiency: Wal-Mart inventory turns is 7.6 compared to 5.4 of Kmart and 6.1 of Target. Wal-Mart inventory cost accounts for only 2-3% of revenues compared to 4-5% of other retailers in 2003. The Scan’n pay system reduces the risks of unsold items for Wal-Mart and it’s an indication of its huge bargaining power.... ...
Environmental Studies is the academic field, which systematically studies human interaction with the environment in which we live in. It is a broad field of study that includes the natural environment, built environment, and the sets of relationships between them. Environmental studies takes into account many different factors that help provide an enjoyable, fruitful way of life, such as national policies, politics, laws, economics, sociology and other social aspects, planning, pollution control, natural resources, and the interactions of human beings and nature.