Wal-Mart Business Analysis Part 2
This paper compares Wal-Mart’s financial health to its competitors such as Target and K-Mart, which are also designed in retail multi-shopping department stores. Further review will detail how Wal-Mart’s rates in comparison of profitability through its income statement, balance sheet, and cash flow in relationship to Target and K-Mart. Upon examination, this information will illustrate the future perspective success of Wal-Mart and determine areas of improvement such as sales, operating income, return on investments, liabilities, and cash flow. Further information will identify the processes that Wal-Mart has designated to comply with the Security Exchange Commission (SEC) regulations. Detailed evaluations will specify Wal-Mart’s financial performance and the principal tools of benchmarking analyses that differentiates Wal-Mart’s position in best practices, operational processes and procedures in the domestic and global markets as well as the technology advantages in relationship to Target and K-Mart (University of Phoenix, 2011).
Financial Statements
Wal-Mart implemented a new financial system, which reflects the retail method of accounting for inventory. This procedure affects the operating income and the consolidated net income for all comparable periods. Wal-Mart reclassified expense and revenue items within these statements of income for the purpose of reporting. However, the reclassifications did not affect consolidated operating income or net income to Wal-Mart (Wal-Mart 2011 Annual Report, 2011).
Cash Flow
Wal-Mart generated a positive cash flow of $10.9 billion, $14.1 billion and $11.6 billion for January 31, 2011, 2010, 2009 respectively. The decline in fiscal 2011 was because of an investment increase in inventory and accounts payable. Nevertheless, an increase in cash flow is the result of improved operating costs