Walmart : Corporate Cash Flows Essay

Walmart : Corporate Cash Flows Essay

Length: 931 words (2.7 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Based on the operating cash flows to current liabilities, Walmart takes the lead. From fiscal 2012-2016, Walmart has consistently had a higher percentage of cash to cover its current liabilities. Kroger usually did better than Costco over this same period except for fiscal 2013, but even in this year Kroger and Costco were pretty much neck and neck. The five year averages for the operating cash flows for Walmart, Costco, and Kroger were 38.85%, 25.11%, and 31.89%, respectively.
However, the quick ratio says the opposite. When inventories are subtracted from current assets, and then current assets are divided by current liabilities Costco is king. Kroger comes in second, while Walmart trails closely behind Kroger. The five-year averages for Walmart, Costco, and Kroger regarding the quick ratio is 0.24, 0.53, and 0.27 times. Therefore, when the inventories (much of which is perishable food items) are excluded, Costco seems to be more liquidable than Kroger and Walmart.
Costco makes enough money to pay dividends every year since 2004. Moreover, these dividends have increased over the years (Soni Part 16). Back in 2004 Costco paid dividends of $0.40 per share, compared to fiscal 2015 dividends of $1.50 per share. For fiscal 2016 Costco pays $1.60 per share. Though it is true that Costco’s dividend yields are lower than those of Walmart and Kroger, it helps that Costco pays special dividends which average an upwards of 4 percentage points higher than its usual 1.1% dividend yields (Soni Part 16). Costco shareholders received these special dividends of $7 per share in fiscal 2013 and $5 per share in fiscal 2015. Given Costco’s high cash balances, investors should expect more special dividends to come.
Kroger has set a long-term goal to ...


... middle of paper ...


...n many. They are also adding more online options, which could add even more value to the firm. Costco derives much of its value from its wholesale and membership model. This is their largest appeal and value driver. It gives the consumer wholesale prices, which really adds to the value of each firm. Kroger is primarily a grocery store, they sell groceries at lower prices to people with Kroger membership cards. This is their main value driver.
Walmart, Costco, and Kroger are the largest firms in the retail industry. The retail industry is one the largest industries in the world. Many of the companies are leaning towards e-commerce. All three of these companies are investing in their online presence. This could be why the retail industry is employing less people than past years. The retail industry could start to grow again once more companies are established online.

Need Writing Help?

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

Check your paper »

Cash Flows Of Australian Company Essay

- PART C PROBLEM SOLVING: Cash flows of Australian company (Westpac Group) From the cash flow statements of Westpac annual report (2013 and 2014), they were highly followed the AASB 107. This report analysis the Westpac annual reports by the structure, which AASB 107 provided for cash flow reporting (paragraph 18-34). Reporting cash flow from operating activities (direct vs indirect) According to AASB 107 paragraph 18, an entity may report their cash flow from operating activities using indirect or direct method....   [tags: Cash flow, Cash flow statement]

Better Essays
1025 words (2.9 pages)

Financial Strength Of Cash Flows Essay

- In a business, it is important to know how funds are generated and spent. The statement of cash flows can provide this type of information. The statement of cash flows is important as it can give an overview that other income statements or balance sheets cannot. The following will give an overview of what a statement of cash flows is, what information it provides and why they are important in assessing the financial strength of an organization. What is the Statement of Cash Flows. Organizations needed a way to present how cash was flowing in and out of their operations....   [tags: Cash flow statement, Cash flow, Balance sheet]

Better Essays
708 words (2 pages)

Essay about The Statement Of Cash Flows

- The statement of cash flows is a very important tool available to business leaders to help them make intelligent decisions regarding the future of an organization. “The main purpose of the statement of cash flows is to report on the cash receipts and cash disbursements of an entity during an accounting period” (Edwards & Hermanson, 2007). This statement answers questions that may arise during the analysis of an income statement or balance sheet. The statement of cash flows will illustrate exactly how an organization utilized its income....   [tags: Cash flow statement, Cash flow, Income statement]

Better Essays
823 words (2.4 pages)

Outline Of A Company 's Cash Flows Essay

- It’s Important for any owner to have a successful and healthy business What attracts other investors is to see that a company is eligible to meet their obligations with their creditors, employees and the investors. Creditors look for a company that is profitable enough to pay their liability (debt). Employees want to work for a company where they can know that they would get pay every month. This is why people look at the company 's cash flows. They’re 4 types of Financial statements. The income statement, reports a company 's revenues and expenses....   [tags: Balance sheet, Cash flow]

Better Essays
801 words (2.3 pages)

Essay on Mutual Fund Cash Flows And Stock Market Performance

- Mutual Fund Cash Flows and Stock Market Performance* During the decade of the 1990’s through the year 2001 there were some major shifts in the deployment of investment assets. Based on a variety of measures, mutual funds grew dramatically as vehicles for investing in portfolios of stock. Specifically net cash flows into equity funds grew from $13 billion in 1990 to $310 billion in the year 2000.1 During that same period the number of equity funds rose from 1,100 to 4,395, while the number of accounts in those funds increased from 22 million to 162 million....   [tags: Economics Stock Investment Cash Analysis]

Free Essays
1802 words (5.1 pages)

The Technology of Cash Flows Essays

- ... It accomplishes this task by making adjustments to the net income figure from the income statement to add back non-cash related transactions (Gibson, 2011; Megan et al., 2009). As noted by Ohlson and Aier (2009), “cash in a literal sense must have been exchanged for it to have an effect on the statement of cash flows” (p. 1093). Therefore, expenses such as depreciation and amortization that do not involve the use of cash are added back to the net income for computing the cash flows (Gibson, 2011; Megan et al., 2009)....   [tags: companies management, trading goods, services]

Better Essays
1450 words (4.1 pages)

Corporate Social Responsibility : Walmart Essay

- The corporate social responsibility is a commitment by a business to contribute to economic development while improving the quality of life for employees and their families’ as-well as contributing to the society. Walmart is a well-known company that offers customers the items they want and need at a low cost, with nearly 4,000 stores in the United States. According to the Fortune 500, Walmart was ranked number 1 in 2015. Just like any other superstore Walmart needs to continue the use of social responsibility by recreating a relationship between business and the community especially if they want to dominate the competition in 2016....   [tags: Social responsibility]

Better Essays
970 words (2.8 pages)

Corporate Social Responsibility Essay

- Corporate Social Responsibility WALMART Corporate.Walmart.com Walmart.com Table of Contents An Overview 2 Walmart Contribution & Activities in CSR 2 • Ethical sourcing 3 • Worldwide women’s economic empowerment 3 • Hunger relief 4 • Healthy food 4 • Giving 4 • Disaster relief 5 Criticisms 5 Labor and Employer Affairs “Illegally Firing and Punishing Employees” 5 Rapacious Pricing and Supplier Issues “Stop the Bullying, Walmart” 6 Final Words 7 References 8 An Overview Walmart is an American worldwide renowned retail corporation that runs chains of large discount department stores and warehouse stores which offers its customer a one-stop shopping experience around the world....   [tags: WalMart, Coporate, Contributions, Activities]

Better Essays
1516 words (4.3 pages)

Essay about Key Value Of Future Cash Flows

- PART A If Sam received two payment of £100; one payment today £100 and another next year. Sam would be more likely to have a higher value of the £100 today as Sam could invest the money in to saving account which would bring interest’s, such as if the £100 was invest in to an account with 5% payed yearly Sam would get interest meaning future value over time the £100 would be higher value, also Sam would know and have the current currency value of the pounds on the exchange rate Sam £100 would be subject to interest rate charged to commercial banks as well as other depository institutions for loans received from the Bank 's discount window which mean Sam money value would also refers to t...   [tags: Investment, Rate of return, Net present value]

Better Essays
1347 words (3.8 pages)

Statement of Cash Flows Essay

- Statement of Cash Flows Paper The Statement of Cash flows is a very useful financial statement that can benefit investors, managers and even auditors. The statement of cash flows has not been around as long as the other financial statements such as the balance sheet or income statement. It basically “illustrates the way accounting evolves to meet the requirements of users of financial statements.” (Marshall, 2003) The statement of cash flows is designed to provide important information about the cash that a company has received or has paid out during a certain time period....   [tags: essays research papers]

Better Essays
452 words (1.3 pages)