Walmart : Corporate Cash Flows Essay

Walmart : Corporate Cash Flows Essay

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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 ...

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...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.

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