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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.
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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.