...Introduction: Financial Statement Analysis is used by interested parties such as inventors, creditors, and management to evaluate the past, current and projected condition and performance of the firm. Its analysis helps user make better desiccations. Ration analysis is the most common form of financial analysis. It provides relative measures of the firm’s conditions and performance. Horizontal analysis and Vertical analysis are also popular forms. Horizontal analysis is used to evaluate the trend in the accounts over the years, while vertical analysis, also called a common size Financial Statement discloses the internal structure of the firm. It indicates the existing relationship between sales and each income statement account. It shows the mix of assets debt that produces income and the mix of the sources of capital, where by current or long-term debt of by equity funding. Financial Statement Analysis prepared for the internal auditors, Many different financial measures are used to analyze financial statements and rank the performance of competing investment opportunities, including growth in sales, return to stockholders, profit margin, and return on equity. These are just four possible measures considered and evaluated by investors and creditors. Financial statements presented in various formats to help facilitate analysis. A classified set of financial statements groups items with similar characteristics together. Groupings include categories such as current assets; property...
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...Welcome To Wal-Mart!!! Welcome To Wal-Mart!!! TABLE OF CONTENTS I. Introduction……………………………................................................................1 II. The Auditors……………………………………………………………………………………….2 III. Events Affecting The Financial Statements………………………………………..2 IV. Assets & Liabilities………………………………………………………………………………3-4 V. Company Stock……………………………………………………………………………………4-5 VI. The Income Statement………………………………………………………………………..5-6 VII. The Statement of Cash Flows……………………………………………………………...6-8 VIII. Summary……………………………………………………………………………………………..8 IX. Works Cited…………………………………………………………………………………………9 WELCOME TO WAL-MART!!! Everyone enjoys shopping at Wal-Mart. They always have the lowest prices on products in town whether it be tools, video games, or groceries. However, everyone wants to know how do they keep such low prices and have such a high profit every year. These questions will be answered in this analysis of the 2013 annual report for Wal-Mart. It is very important to look at the annual report for a business in order to be able to see how they are doing financially. This is a great way to predict where the company is headed as far as the future goes. It is equally important to analyze the information in the annual report so that one might ensure that the data is as accurate as possible. In this report, we will explore how exactly Wal-Mart is a trillion-dollar industry. We will explore their...
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...Wal-Mart Case Valuing Wal-Mart Stock Questions: 1. Assess the financial health of Wal-Mart based on an analysis of the financial statements. 2. Based on any additional available information (including annual reports and 10-K filings) assess the economic conditions (as of the time of the case), the industry key success factors and competitive situation, and Wal-Mart’s strengths and weaknesses. 3. Develop a pro forma income statement and balance sheet for Wal-Mart for the fiscal year ending January 31, 2006. Assume the following (in addition to information in the case): selling, general and administrative expenses at 17.3 percent of anticipated net sales; interest on debt at an average rate of four percent; similar number of shares outstanding as of January 31, 2005: similar prepaids, other assets, accrued liabilities, deferred taxes and minority interest as in 2005. State any other key assumptions. How profitable do you anticipate Wal-Mart will be? Will Wal-Mart need to increase its reliance on external borrowing? 4. Determine the intrinsic value of Wal-Mart (on a per share basis) using the dividend discount model (DDM). Assess the value based on three forms of the DDM: the constant growth version, an assessment based on three years of projected dividends and a projected future stock price, and the three-stage DDM. Clearly state any assumptions including an estimation of Wal-Mart investor required returns. 5. Determine the intrinsic value of Wal-Mart (on a per share basis)...
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...Vijay Reddy Husson University BA 620 – Project 3 –Company Analysis 2/23/15 Spring 2015 Professor Shayne Question 1 Response All required documents are attached Question 2 Response WMT business strategy, goals & objectives: According to page 5 of the 2014 Annual Report, Wal-Mart’s goals and objectives include: “positioning to serve customers, expand opportunities for store associates; drive operational excellence by driving productivity loop to leverage operating expenses; earning trust in communities; ensuring solid performance in challenging environment of retail industry; and embracing the challenge to change in order to make customers save money and live better. Finding the best team in retail is Wal-Mart’s core strategy” (Wal-Mart, 2014). Business challenges/risks facing WMT: According to page 17, Item 1A of the 2014 Form 10-K Wal-Mart faces various risks that may adversely affect business operations: “1) General domestic/international macro-economic factors such as high gas and energy prices; 2) Unable to respond to consumer demands or consumer preference trends in a timely fashion (ex. online shopping); 3) Impediments in expanding in the US such as constructing Supercenters; 4) Impediments to expanding Wal-Mart international operations; 5) Failure to attract and retain qualified associates, changes in laws and other labor issues; 6) Strong competition...
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...important role in a company’s financial environment. In large corporations, such as Wal-Mart, who employ 2.1 million employees worldwide and 9029 retail units fewer than 60 different banners in 15 different countries is a prime example of how ethics and compliance practices are used effectively (Walmartstores.com) (2011). An assessment of the role ethics and compliance plays in Wal-Mart's financial environment along with procedures Wal-Mart has in place to ensure ethical behavior will be examined and discussed in this paper. Also covered in this paper: An explanation of how financial markets work in the United States and identifying the processes Wal-Mart uses to comply with SEC regulations, and an evaluation of Wal-Mart’s financial performance during the past two years using financial ratios and the trend each ratio tells about the financial health of the company. Assess the role of ethics and compliance in your organization’s financial environment The role of ethics and compliance in Wal-Mart’s financial environment is founded on the three Basic Beliefs set forth by Sam Walton (founder of Wal-Mart). The three Basic Beliefs as stated in Wal-Mart’s ethics statement are: Respect for the individual, Service to our customers and striving for excellence (Wal-Mart, n.d.). The open door communications process is another role of ethics and compliance in Wal-Mart’s financial environment. The open door communications process according to "Wal-Mart-Statement of Ethics", (n.d.) the...
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...Wal-Mart Financial Analysis Well everyone knows the history of Walmart, the great American success story, or do you? Let me fill you in. In 1950s Sam Walton opened his first store in Arkansas with the believe in fair play and providing American produce goods at low prices and undercutting his competition by keeping his profit margin even lower. Mr. Walton was able capitalize on this philosophy through cultivate his business and leveraging capital by means of encouraging managers and associates to take advantage of his situation and become stakeholders thereby inspiring the manager’s and associates to improve their skill sets and take ownership and pride in the business. In the 60’s, the first true Wal-Mart open its doors permanently. By the 80’s Walmart was a billion dollar company with stores operating across 28 states. (http://walmart1percent.org/) Today Wal-Mart is the largest corporation in the world employing 2.3 million people (Dun & Bradstreet, 2014, para. 1) However todays Wal-Mart does not share Sam Walton visions or his values. Today Wal-Mart does whatever it needs to maximize revenue at the expense of its employees and customers. Today’s Wal-Mart has little or no respect for their employees. For the majority of their employees’ wages lower than their closest competitors (Costco and Target) since Wal-Mart encourage their employees to get on government funded programs such as food stamps, Medicaid, and public housing thereby passing some of their overhead...
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...WAL MART Financial Analysis Managerial Finance FI515 Keller Graduate School of Management of DeVry University Introduction and Overview The history of Wal-Mart can be traced back to 1940s when Sam Walton began his career in retail at JC Penny. Walton would only stay at JC Penny for 18 months before begging his career as a entrepreneur. On May 9, 1950, Walton purchased a store from Luther E. Harrison in Bentonville, Arkansas, and opened Walton's 5 & 10. Thus, the Ozark Mountain town of 2,900 residents would become the headquarters for the world's largest retailer. By 1962, he had eleven Walton's stores Inspired by the successes of other discount department store chains, Walton opened the first store in his own discount chain in Rogers, Arkansas that year. Responsible for the purchase and maintenance of signage, Walton's assistant, Bob Bogle, came up with the name "Wal-Mart" for the new chain. By 1967, the company grew to 24 stores across the state of Arkansas, and had reached $12.6 million in sales, and by 1968, the company opened its first stores outside of Arkansas in Sikeston, Missouri and Claremore, Oklahoma. In February 1988, Sam Walton stepped down as Chief Executive Officer, and David Glass was named to succeed him. Walton remained on as Chairman of the Corporate Board of Directors, and the company also restructured their senior management positions, elevating a cadre of executives to positions of greater responsibility...
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...A summary of Wal-Mart’s financial performance in fiscal year 2008 can be found in Wal-Mart’s 2008 Annual Report, which is available on walmartstores.com. Wal-Mart’s fiscal year 2008 ended on January 31, 2008. Unless otherwise stated, references to years in this report relate to fiscal years, rather than to calendar years. Key highlights from the Annual Report are discussed below. Item 1. Revenue Recognition Wal-Mart Stores, Inc. reported record sales for fiscal year 2008. During this period, total net sales (sales net of sales taxes and estimated sales returns) were $374,526 million, which represents an increase of 8.6 percent over the previous fiscal year. Wal-Mart recognizes sales revenue at the time the merchandise is sold to the customers. Two exceptions to this are layaway transactions and gift card purchases. Sales revenue from layaway transactions is recognized when the item is fully paid for and the customer has the item in his/her possession. Sales revenue from gift card purchases is recognized when the card is redeemed. In addition to sales revenue, Wal-Mart also recognized $1,038 million in Sam’s Club membership fees in fiscal year 2008. Sam’s Club membership fee revenue is recognized over the term of the membership. Membership fees that are not recognized are recorded as deferred membership fee revenue (unearned revenue) and are rolled over until the following fiscal year. Item 2. Income Trends for 2004 to 2008 In order to get a better...
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...Wal-Mart and the Ethical Dilemma Presented to: Dr. Robert D. Gulbro In completion of MGT 5013 Organizational Behavior Florida Institute of Technology By: Felix Knight Wal-Mart was started by Sam Walton in 1962; the first store was in Rogers Arkansas. By the beginning of the 1970’s, Wal-Mart had grown to 1,500 employees and 44.2 million dollars in sales. The company also went public in 1970. The company’s growth continued throughout the decade, with the employee count reaching 21,000 by 1980 with $1.2 billion dollars in sales. Wal-Mart made its first acquisition, buying 16 Mohr-Value stores. In 1983, the first Sam’s Club warehouse opened followed by the first Wal-Mart Supercenter in 1988. By the end of the decade, the company had over 1,402 Wal-Mart and 123 Sam’s Club locations and $26 billion dollars in sales – an increase of 2,600% over the decade. Today, Wal-Mart is the world’s largest retailer, with $405 billion in sales, over 4,300 stores, and 2.1 million employees (Duke, 2010, p. 0). One hundred shares of Wal-Mart stock purchased for $1,650 when the company went public would have grown to 204,800 shares worth over $10.1 million as of July 9, 2010 for a return of 613,431% (“Dividends & stock splits”, 2010, July 9) (“Wal-Mart (WMT) stock quote” 2010, July 9). Daft (2008) stated “Wal-Mart is the largest retailer in the United States” (p. 129). Wal-Mart’s 2010 annual report provides the mission statement of the...
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...|Wal-Mart Stores, Inc. (WMT) |February 25, 2006 | |Hold | |WMT: Competitive and Financial Analysis | |By: Ryan Hummer | Company Profile Wal-Mart Stores, Inc. (Wal-Mart) operates retail stores in various formats worldwide. The Company organizes its business into three principal segments: Wal-Mart Stores, SAM'S CLUB and International. The Wal-Mart Stores segment is the largest segment of Wal-Mart's business, accounting for 67.3% sales during the fiscal year ended January 31, 2005 (fiscal 2005). The segment consists of three different retail formats, all of which operate in the United States. The Company's SAM'S CLUB segment consists of membership warehouse clubs that operate in the United States, and accounts for 13% of fiscal 2005 sales. The international segment consists of retail operations in eight countries and Puerto Rico, and generated 19.7% of Wal-Mart's fiscal 2005 sales. In addition, the Company owns an unconsolidated...
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...overview of Wal-Mart’s Annual Report. The purpose of a corporate annual report is to communicate to stockholders and other interested parties its financial statements. The annual report is a summary of the corporation’s operations over the previous 12 month time period and states the corporation’s plans for the future. Many annual reports are created to resemble a corporate brochure, using lots of pictures, color, charts and graphs. Despite the fancy look, the main purpose of the report is to provide the year’s financial data, which comes from the corporation’s accounting system. This paper identifies and explains the main sections of the annual report. I try to discuss the key factors that influenced the company’s financial performance during the year and the primary assets held by the company. Lastly, I explain how management characterizes the internal control environment of the company. Identify and explain the main sections of the annual report. A company's annual report is a comprehensive report of its activities throughout the preceding year. They help in understanding the past performance of the company and making future predictions about the company. Annual reports are intended to give shareholders, employees, potential investors, banks, government agencies and other parties who are outside the business information about the company's financial performance. The most common components of the annual report are the balance sheet, the income statement, and the statement...
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...Flags After analyzing Wal-Mart’s annual report for 2010, attention has been brought to several items that require closer examination. A common “red flag” to questionable accounting has been found within Wal-Mart’s statement of cash flows and income statement. There is an increasing gap between the company’s reported income and the cash flow from operating activities. In the year 2008 reported income and cash flow from operating activities differed by $484 million. However the difference increased a considerable $2,249 and $4,183 billion in the years 2009 and 2010 respectively. This increasing gap is a significant warning sign that the company may be changing accrual estimates. Another factor to consider when analyzing Wal-Mart’s financial position is the firm’s uncertain tax position. At the current time, Wal-Mart has $1.0 billion of unrecognized tax benefits related to continuing operations. However note 8 of the consolidated financial statements observe, “During the next 12 months, it is reasonably possible that tax audit resolutions could reduce unrecognized tax benefits by between $350 million and $500 million, either because the tax positions are sustained on audit or because the company agrees to their disallowance.” The company also states that any change should not have a significant change on financial position; however in my opinion an investor should not over look this red flag. * Step two: Identify Principal Accounting Policies Wal-Mart has several policies...
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...nice case study |Bull Story |Bear Story | |Financial Strength and Stability |Economy Changes Discretionary Spending | |Dominant Market Position |May Not be Embraced Overseas | |Asset Play: own about 70% of properties |Large Debt | |Innovation Efforts | | Table of Contents |Company Overview | |3 | |Company History | |3 | |Recent History ...
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...I. The Theme Wal-Mart was built to save people money so they can live better. Hints to their slogan: “Save Money. Live Better.” Their mission has allowed the company to grow around the world. The culture and the values of their employees help strive for success of Wal-Mart while serving over 200 million customers and members each week(Wal-Mart Annual). We strongly believe that Wal-Mart is the best- positioned global retailer and that they will continue to progress. Cost leadership is the corner stone of how Wal-Mart goes to market. Doing our analysis of Wal-Mart Stores, Inc., we gathered our information and different figures from the Hoover’s online through the Willis library’s website, Reuters.com, and Morningstar.com databases which gave us insight to several financial aspects of the firm, including its stock, cash flows, risk, dividends, sales, earnings, debt, and overall performance. II. Business Analysis Profile of the company “If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life.” Wal-Mart founder, Sam Walton, summarized his vision back in 1962 for a new type of discount store that consumers would appreciate. As an owner of a much smaller discount store Walton had the experience, did the research, and then put up 95 percent of the startup costs for his new company in which he and his wife truly believed in. The first store opened in Rogers, Arkansas and was...
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...Title: Wal-Mart’s Purchasing Process To: Dr. Franklin Mitchell From: Mark Bieker Class: Class: AC 550 Accounting Information Systems Date: October 10, 2011 Introduction Wal-Mart was founded by Sam Walton in 1962 with the first Wal-Mart discount store opening in Rogers, Arkansas. The company was officially incorporated as Wal-Mart Stores Inc. on October 31, 1969. Currently, Wal-Mart has stores in 50 states in America and 15 countries worldwide, including Argentina, Brazil, Canada, Chile, Costa Rica, El Salvador, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Puerto Rico, and the United Kingdom. The growth of Wal-Mart over a period of 49 years is remarkable and has lead Wal-Mart to become the biggest retailer in the world. Wal-Mart also has a strong community presence in the areas the stores are located. Wal-Mart’s purpose is to save people money and to help them live better. In 2007, Wal-Mart changed its slogan from “Always low prices” to “Save money. Live better.” This slogan is demonstrated in the products that Wal-Mart sells. Wal-Mart will not be undersold. Wal-Mart caters to the low income and middle income people by offering goods at low prices. These low prices are demonstrated in the products Wal-Mart sells. The products include: food, drink, clothing, jewelry, electronics, automobile supplies, sporting goods, toys, and furniture. Basically, Wal-Mart offers customers a one stop shopping experience. In order to provide this variety of...
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