Walmart Financial Analysis

Walmart Financial Analysis

Length: 977 words (2.8 double-spaced pages)

Rating: Excellent

Open Document

Essay Preview

More ↓
Investment Banker
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.
Target bank is called the Target National Bank. It is owned by the Target Corporations itself and all the receivables go into Target has approximately 1,600 million dollars worth of lines of credits from twenty five different banks, approximately half the worth of the line is used and is due back for payment June 2005, with an extension all the way up to June 2006. The other half of the payment is due June 2008. The expected long term rate of securities rate for October 31 2004 was 8.5 %.
For 2004, Wal-Mart earned 256 billion in revenues which from sales alone was 26 billion.
The top two reasons for such success in ranking first in retail store market, is because Wal-Mart is convenient globally and so are there prices in the competitive market . Wal-Mart has three segments which are superstores, discount stores, and Sam's Club stores, all of these are scattered in the United States, Canada, Mexico, Europe, Brazil, and Asia. One downfall was from Sam's club because too many were opening all over internationally it decreased the number of customers per location. Overall despite the company's decline on Sam's club sales, the Corporations did well over all with the figures brought in and conditions.
The Target corporations in plans to grow converted retail stores to retail super stores. In 2004 Target added 65 new merchandise stores and eighteen new Target Superstores all across the United States.

How to Cite this Page

MLA Citation:
"Walmart Financial Analysis." 18 Jan 2020

Need Writing Help?

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

Check your paper »

Essay about Walmart: A Strategic Management Case study Financial Perspective

- Pricing Strategy Wal-Mart’s primary competition in US includes department stores of the likes of Target and Kmart. Costco offers competition to Sam Club format of Wal-Mart. In niche small markets, dollar stores are offering strong competition to Wal-Mart. Kroger competes with Neighbor market and supercenters of Wal-Mart especially on the grocery product line. Target competes with Discount stores and supercenter shopping formats of Wal-Mart with Target commanding a small premium on prices as it follows fashion trend....   [tags: kmart, target, walmart, low prices]

Research Papers
972 words (2.8 pages)

Walmart : The Largest Retailer Essay

- 2. S-W-O-T Analysis 2.1 Strengths • Walmart is the largest retailer in the world operating in various formats worldwide (including; discounts stores, supercentres, neighbourhood markets and Sam’s Club), with 3,615 stores today. Leading to consumer awareness and customer loyalties. • In pervious years, Walmart has integrated an e-commerce aspect to their operations. The strength of this aspect is the vast physical advantage when compared with any online retailer. • Due to the convenience and numerous locations of stores, the service of the results in an attractiveness to customers, and a way for Walmart to eventually bring more customers to its stores and increase their purchase...   [tags: Financial ratios]

Research Papers
1603 words (4.6 pages)

Swot Analysis : Walmart And Walmart Essay

- According to Smithson, Walmart can expand its markets to new and emerging markets especially in the third world countries, which can significantly increase its revenues. Secondly, the company can reform is employment practices and improve the quality standard and in doing so, attract more customers and improve its brand image. On the other hand, the company faces threats such as the rising healthy lifestyle trend I that the company in most cases does not provide customers with healthy goods. At the same time, the company can capitalize on this aspect and increase its revenues....   [tags: Retailing, Wal-Mart, Department store, Shopping]

Research Papers
801 words (2.3 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]

Research Papers
1140 words (3.3 pages)

Ratio Analysis : A Company 's Financial Condition Essay

- Ratio Analysis In order to make inferences about a company’s financial condition, its operations, and its attractiveness as an investment we have analyzed financial ratios and compare ratios derived from SVU’s financial statements (see chart 1). Gross Profit Margin The gross profit margin ratio is used to show how much of each sales dollar is left after certain costs are covered (footnote). Looking at the table, Supervalu has increased its gross profit margin from 14.4% in 2015 to 14.7% in 2016 (in millions of dollars)....   [tags: Financial ratios]

Research Papers
1205 words (3.4 pages)

Essay on Swot Analysis : Walmart And Sears

- Competitive Research Target Corporation main competitors are Walmart and Sears. While Walmart is leading their industry of major retail chains, Target is not far behind as they are currently ranked second amongst the major retail chains. In order to maintain their growth and competitive advantage, Target needs to pay close attention to their competitor’s market share, product quality and unique selling proposition in comparison to their own. Target should be analyzing their competition using metrics that will allow them to use that information to set objectives, rate their own performance, and plan for future success for the organization....   [tags: Sales, Marketing, Department store, Kmart]

Research Papers
1147 words (3.3 pages)

Training Needs Analysis Of Walmart Essay

- Training Needs Analysis of Walmart The goals include training on leadership. The objective is for management to gain the proper skills to effectively lead teams, resolve conflicts, and better their management abilities. The training will address employee turnovers to low wages, effective communication strategies, and effective leadership. Management will become more strategic in selecting the right candidates to fill positions. The knowledge and skills attained will be that managers will become better leaders by becoming more empathetic....   [tags: Management, Training, Skill, Leadership]

Research Papers
1312 words (3.7 pages)

Analyzing Financial Statements Essay

- 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....   [tags: stock, business, walmart, performance]

Research Papers
979 words (2.8 pages)

Equity Valuation of WalMart Essay

- EQUITY VALUATION – WALMART Equity valuation is a major tool used to analyse investment choices using the company’s past and current performance, in addition to its business plans, in order to forecast its future financial position and valuate the stock. This paper will examine and valuate Walmart based on my projection for the company’s performance over the next few years. SECTION I Wal-Mart Stores, Inc., branded as Walmart and traded on the NYSE as WME, is a multinational retail corporation headquartered in Bentonville, Arkansas (United States)....   [tags: Major Tool, Analyze Investment Choices, Company]

Research Papers
2456 words (7 pages)

Walmart Essay

- Walmart History: Beginning to Today Wal-Mart is a general merchandise discount retailer, which was incorporated in 1962. Wal-Mart’s history is based on one man, Sam Walton, who changed the course of retailing forever. Sam Walton first entered retailing when he was a management trainee at J.C. Penny Co. in 1940 in Des Moines, Iowa. After serving in the Army in World War II, Walton acquired a Ben Franklin variety store franchise with his brother James Walton in Newport Arkansas, until they lost the lease to the store in 1950....   [tags: GCSE Business Marketing Coursework]

Research Papers
3360 words (9.6 pages)

In plans to stay up to date and dynamic, Target in 2004 also made an addition for bringing in new brand names such as Simply Shabby Chic and C9 by champion. Most of the revenue increases for Target were all due to expansion and comparable retail store prices. Total revenues for Targets 2004 were $1,222 million.
Investment and Financing
Overall Wal-Mart did well in company investments. Ever since 1974 the dividend for the company grew along with stock prices. For 2004 the annual dividends increase more than 44%. Wal-Mart paid more than 10 million dollars to share holders overall. During 2003 Wal-Mart sold the McLane Company Inc. for 1.5 billion dollars because Wal-Mart did not see McLane in the same category as Wal-Mart. The profits gained after taxes of selling McLane Company Inc were 151 million. Although, McLane was sold, it still maintains as one of the suppliers for Wal-Mart today. Before Mclane had been sold, it had generated approximately 14.5 billion in sales.
Cash flow from operations provided Wal-Mart an over all liquidity of 15.9 billion in 2004 from 12.9 billion in 2003, due to improved inventory management. Wal-Mart's accrued liabilities for fiscal year 2004 was 1.8 billion. This was all due to a combination of due to insurance claims, workers comp, salaries, taxes and interest rates. As far as financing for Wal-Marts financed a 500 million dollars to be repaid till 2011 any irregularity in payment will cause a termination fee of 88 million dollars
"The American Jobs creation act of 2004 (The Act) was signed into law in October 2004. The Act introduced a tax deduction for qualified production activities and special one time dividend received deduction for repatriation of certain foreign earnings to a U.S. taxpayer." (Target, 2004). Cash equivalent for the short term investment matures in three or less months from the moment of purchase. Because Target sold Marshall Fields and Mervyn's this increased this increase the cash equivalents to 1,732 million for 2004 from the prior year of 244 million a difference of $1,488 million. Liquidity for Target is approximately 1600 million through lines of credit. For 2004 these lines of credits did not have any outstanding balances under the agreement.
Financial Strengths and Weaknesses
It looks like the strengths for Wal-Mart are within the expansion process itself. Since Wal-Mart is expanding across the glob, there customers overall expand at the same token. Coincidently, one of the events that let to a financial strength was the rate of foreign exchange rates which was to the Wal-Mart advantage in purchase if inventories. There is a slight possibility that too much location and conversion of superstores might back fire because Wal-Mart might have possibly saturated the market with rapid and numerous expansions. Over all the company is a strong stable company.
Regulatory factors on the other can be an event that could lead to Wal-Mart to financially weaken, such as lawsuits. The foreign exchange rate could be considered an outside factor that could lead to a slight financial weakness effect, if the foreign exchange rate is not in favor for Wal-Mart than it could hurt Wal-Mart because Wal-Mart buys inventories from other countries as well that could get less or more for the buck depending on rates.
Return to