Premium Essay

Industry Averages

In: Business and Management

Submitted By ajsmom08
Words 537
Pages 3
Walmart is classified as a department store by the Department of Labor, with the Standard Industrial Classification (SIC) code of 5133. The Department of Labor website states, "…these stores must carry men's and women's apparel and either major household appliances or other home furnishings. These and other merchandise lines are normally arranged in separate sections or departments with the accounting on a departmentalized basis” (United States Department of Labor, 2014, para. 1.). The paper will examine Walmart and other industry department stores according to financial reportings, the Dun and Bradstreet Key Business ratios report, and calculations of financial ratios.
Team Calculations
Solvency Ratio
Solvency ratio = (After Tax Net Profit + Depreciation) / Total liabilities
2013
16,999,000+ 8,478,000/ 126,243,000=
25,477,000/ 126,243,000=20%
2012
15,699,000 + 8,106,000/121,687,000
23,805,000/121,687,000=20%
Profitability Ratio
Return on Sales=Net Income /Net Sales
2013
16,999,000/116,354,000=15%
2012
15,699,000/111,516,000=14%
Efficiency Ratio
Fixed Asset Turnover Ratio=Net Assets/Net Sales
2013
55,846,000/116,354,000=48%
2012
50,664,000/111,516,000=45%
Analysis
When comparing the calculated financial ratios for Walmart for 2012 and 2013 to that of the industry averages in solvency, Walmart was steady at 20% in 2012 and 2013 while the median numbers in 2012 and 2013 respectively for the industry were 64.30 and 46.20 (Dun and Bradstreet, 2014, para. 1). If this number is accurate, it is not a good indicator for how Walmart is handling cash flow. Walmart’s calculated return on sales, or profitability ratio was 14% in 2012 and 15% in 2013, but the median industry average in those respective years according to Dun and Bradstreet were 3.2 and 2.3 (Dun and Bradstreet, 2014, para. 3). There could be a fault in the calculation numbers because it...

Similar Documents

Premium Essay

Industry Averages and Financial Ratios

...Industry Averages and Financial Ratios Team B FIN/370 Date Teacher Industry Averages and Financial Ratios The SIC code in which Team B used in order to determine the ratios is 4841 for cable and other pay television services. The ratios will show Disney accounts receivables are in the billions. In order for the company to be successful they would have to be in good standing with their suppliers. Disney visitor numbers are high due to the high demand in wanting to come to the amusement park. Disney tries their best to keep themselves competitive within the business, because they are always able to supply their consumers with marketing supplies. Keeping their product costs low and coming up with different marketing strategies Disney has been able to successfully create more profit and revenue as years go by. Liquidity Ratios When comparing the quick ratio to the industry ratios from the Dunn and Bradstreet key business ratios we see that Disney has held steady in median level compared to samples in the statement. The higher the quick ratio, the better the company's liquidity position. When comparing the current ratio to industry ratios Disney also falls under the median range. Acceptable current ratios vary from industry to industry. For most industrial companies, 1.5 may be an acceptable current ratio, Disney falls as an average to an acceptable ratio and current ratio means that the company is more likely to meet its liabilities which are......

Words: 970 - Pages: 4

Premium Essay

Industry Averages and Financial Ratios Paper

...Industry Averages and Financial Ratios Paper Manuelita Blow FIN370 Ms. Christine Gordon University of Phoenix March 13, 2015 Industry Averages and Financial Ratios Paper This paper will be discussing Target, a publicly-traded company. This paper will be Locating the SIC code for the company's industry, Finding Targets ratios for the company using the Dun & Bradstreet® Key Business Ratio link in the University Library. This paper will also be assuming that the inventory ratio is based on a traditional inventory system, but globalized markets and the supply chain make it critical to adopt lean principles to create a more efficient system. This paper will also be discussing what a change to a Just- In- Time inventory system would have if adopted by Target and Financial ratios will be calculated and the ratios will be compared with the appropriate industry. Assume According to "Just In Time Vs Traditional Inventory System." (2014), “Traditional inventory systems, seek to have enough inventory on hand so that production may continue even in the face of unexpected shortages or shipping delays. The ideal goal of JIT (Just in Time) manufacturing is to have precisely the right amount of components or materials on hand at any given moment, with as little idle inventory as possible. In a factory run perfectly according to the JIT model, every component delivered to the factory would go directly from the loading dock to the assembly line”. ("Just In Time Vs Traditional......

Words: 803 - Pages: 4

Premium Essay

Industry Averages and Financial Ratios Paper

...Wal-Mart’s Industry Averages and Financial Ratios Paper Wal-Mart Stores, Inc. maneuvers trade warehouses in countless structures worldwide. The business functions in three sections comprising of Wal-Mart International, Wal-Mart U.S., and Sam’s Club. “It operates discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, restaurants, apparel stores, drug stores, and convenience stores, as well as various retail websites, such as walmart.com and samsclub.com.“ (Retrieved by: http://finance.yahoo.com/q/pr?s=WMT) Wal-Mart has an inventory ratio that is based on a traditional inventory system, but desire a change to a Just-In-Time inventory system. Analyzing Wal-Mart’s financial ratios provide an outlook on the financial health of the company. Furthermore, the financial ratios are compared to other industry ratios including profitability, solvency, and efficiency. Wal-Mart Stores, Inc. “As of June 5, 2014, it operated approximately 11,000 stores under 71 barriers in 27 countries; and ecommerce websites in countries.” (Retrieved by: http://finance.yahoo.com/q/pr?s=WMT) In 1945, Wal-Mart was originated and its headquarters is located in Bentonville, Arkansas. Wal-Mart Stores, Inc. SIC Code is 53119901. The company line of business is department stores, but often considered variety stores and miscellaneous general merchandise stores. Wal-Mart Stores, Inc. NAICS is 452112 or 452111. On the other hand, Wal-Mart Stores, Inc. deals with a number of......

Words: 996 - Pages: 4

Premium Essay

Hospital Managemen

...expenditure on medicines Healthcare delivery market is estimated to be Rs. 1,816 billion in 2009-10 – IPD (I (In-patient department) treatments account for 63 per cent ti t d t t) t t t tf t The overall industry is expected to grow at a CAGR of 12 per cent over the next 5 years – Expansions by large private players are skewed towards higher value IPD treatments, as a result IPD share is expected to increase to 66 per cent by 2014 15 2014-15 3. For estimation of market size METHODOLOGY 4. Health-adjusted life expectancy (HALE) HALE takes into account the following factors over a period of time: Geographical and demographic factors It is determined from a number of different data sources: – WHO Global Burden of Disease Survey – WHO World Health Survey – WHO Multi-country Survey Study – Local Medical authorities Severity of disease HALE Incidence of disease HALE is one of the critical variables i f th iti l i bl used to determine market size for the healthcare industry Geographical and demographic factors 5. Estimation of the number of treatments required in a lifetime HALE essentially provides us with the amount of time in one’s lifetime an individual requires medical attention The estimated split of IPD and OPD cases (determined from industry sources and the disease profile of a country) splits the time spent in ill-health into two...

Words: 937 - Pages: 4

Premium Essay

Competitive Landscape & Beginning Literature Review

...could find the signals to buy or sell stocks. The second trading strategy is called Discounted Cash Flow method, which is a part of fundamental analysis strategy. It uses future free cash flow to discount them back to arrive at a present value, which is used to evaluate the attractiveness for a potential investment. However, there are so many different strategies in the world except for what we are working on right now. The most popular five trading strategies are as following: Mean Reversion In the world of technology analysis, moving average is one of the most popular and widely used indicators. What started with the simple moving average and then towards exponential moving average has with the passage of time and advent of computer programmed software's have made technicians to experiment and come up with new types of data calculation [2]. Mean Reversion is a theory suggesting that prices and returns eventually move back towards the mean or average under the above assumption. A...

Words: 1440 - Pages: 6

Premium Essay

Boeing

...the current market for commercial airplanes was depressed because of terrorism risks, war, and SARS, a contagious illness that resulted in global travel warnings. Boeing’s board of directors would need to weigh those considerations before granting final approval to proceed with the project. The task for students is to evaluate the 7E7 project against a financial standard, the investors’ required returns. The case gives internal rates of return (IRR) for the 7E7 project under base-case and alternative forecasts. The students must estimate a weighted-average cost of capital (WACC) for Boeing’s commercial-aircraft business segment in order to evaluate the IRRs. As a result of that analysis, the students identify the key value drivers and distinguish, on a qualitative basis, the key gambles that Boeing is making. The general objective of this case is to exercise students’ skills in estimating a weighted-average cost of capital and cost of equity. The need for students to estimate a segment WACC draws out their abilities to critique different estimates of beta and to manipulate the levered-beta formulas. Boeing competes in both the commercial aircraft and the defense business. Thus, deriving the appropriate benchmark WACC for the 7E7 project requires isolating the commercial aircraft component from Boeing’s overall corporate WACC. In doing so, students...

Words: 7346 - Pages: 30

Premium Essay

Bsg Online

...headed “Company __’s Marketing Effort” represent tentative values for your company’s marketing effort for the upcoming year in each of the four geographic regions. Think of the entries as “preliminary” or “trial” decisions that represent “what if we do this to try to sell branded pairs in this region.” The numbers already in these columns when you first come to the screen are the decisions your company made last year and represent the competitive marketing effort your company employed to achieve last year’s branded sales volumes and market shares in each geographic region. • Your entries in the four columns headed “Your Estimate of the Industry Average” represent your best “guestimates” of what level of competitive effort your company will be up against in the upcoming year — they are, in other words, what you think that rivals, on average, will...

Words: 8174 - Pages: 33

Free Essay

Brzanz

...Acknowledgments This work was funded by the Building Research Levy. Note This report is intended for builders and designers. It provides details of the Auckland Plan and the BRANZ interpretation of the types of housing, location and timing of their construction. i Auckland housing forecasts and the Unitary Plan BRANZ Study Report SR 295 IC Page Abstract The Auckland Plan sets out the strategic direction for the future of Auckland. It covers economic, social and environmental considerations, housing, physical infrastructure, and transport. Included in the Plan are zones for various housing types, with an emphasis on intensification of housing mainly within the planned metropolitan urban limit (MUL). The relevance to the building industry is that housing types are changing and builders and designers need to be aware the predominance of detached housing in new builds is coming to an end. ii Contents 1. 2. 3. Page INTRODUCTION ......................................................................................................................... 1 SUMMARY ................................................................................................................................... 1 MAIN RESULTS...

Words: 8561 - Pages: 35

Free Essay

Samsung Strategy

...has demonstrated economies of learning. While in the 80’s Samsung had to acquire outside technology to begin production, Samsung soon lead industry with important breakthroughs such as “stacking” technique or successes in implementing the 8- and 12-inch wafer mass production. 12-inch wafer versus its predecessor yields a 10% lower cost per chip (Exhibit 10a) thanks to a greater output per step of production. Production Techniques The latter goes in hand with production techniques that ensure better yield rates. Minimizing defective chips brings down scrap and re-processing costs. In Exhibit 10c we can see that Samsung has 20% better yield than its closest competitor in this regards. Moreover, Samsung is able to keep producing legacy products (older than 1 year since launch) efficiently. By 2003, for example, Samsung was producing 16.40 million units of 64Mbit (merely 1.8% of its total production) while keeping fully loaded costs 27% lower than the weighted average cost of its competitors for this particular product (Exhibit 7b). Input Cost Large production volumes trigger high-volume purchases that results in discounts from suppliers. For example, raw materials represent on average 27% of the cost per unit for Samsung, for Micron 29%, for Infineon 32% (exhibits 7a to 7e). Moreover Samsung competes with low average labor cost: it has an average salary of $44k, versus $54k and $72.4k of Micron and Infineon respectively. Residual Efficiency Samsung has built a culture of......

Words: 1230 - Pages: 5

Premium Essay

Servqual for Banking

...Measuring Service Quality Using SERVQUAL |Introduction |Measuring the quality of a service can be a very difficult exercise. Unlike product where there | | |are specific specifications such as length, depth, width, weight, colour etc. a service can have| | |numerous intangible or qualitative specifications. In addition there is there expectation of the| | |customer with regards the service, which can vary considerably based on a range of factors such | | |as prior experience, personal needs and what other people may have told them. | |SERVQUAL – a methodology for |As a way of trying to measure service quality, researchers have developed a methodology known as| |measuring service quality |SERVQUAL – a perceived service quality questionnaire survey methodology. SERVQUAL examines five | | |dimensions of service quality: | | |Reliability | | |Responsiveness | | |Assurance; ...

Words: 1409 - Pages: 6

Premium Essay

Book

...SUBJECT: BUSINESS STATISTICS COURSE CODE: MC-106 LESSON: 01 AUTHOR: SURINDER KUNDU VETTER: DR. B. S. BODLA AN INTRODUCTION TO BUSINESS STATISTICS OBJECTIVE: The aim of the present lesson is to enable the students to understand the meaning, definition, nature, importance and limitations of statistics. “A knowledge of statistics is like a knowledge of foreign language of algebra; it may prove of use at any time under any circumstance”……………………………………...Bowley. STRUCTURE: 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 Introduction Meaning and Definitions of Statistics Types of Data and Data Sources Types of Statistics Scope of Statistics Importance of Statistics in Business Limitations of statistics Summary Self-Test Questions Suggested Readings 1.1 INTRODUCTION For a layman, ‘Statistics’ means numerical information expressed in quantitative terms. This information may relate to objects, subjects, activities, phenomena, or regions of space. As a matter of fact, data have no limits as to their reference, coverage, and scope. At the macro level, these are data on gross national product and shares of agriculture, manufacturing, and services in GDP (Gross Domestic Product). 1 At the micro level, individual firms, howsoever small or large, produce extensive statistics on their operations. The annual reports of companies contain variety of data on sales, production, expenditure, inventories, capital employed, and other activities. These data are often field data...

Words: 134607 - Pages: 539

Premium Essay

Nike

...Nike Case Team 5 – Windsor Cohort (Heidi Limmonen, Oksana Simakina, Masayuki Kondo, Rui Dias, Andres Losada, Zsolt Makai) 1. What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? WACC is the rate that a company is expected to pay to debtors and creditors. A weighted average of the component cost of debt, preferred stock, and common equity. (Birgham & Houston, 2009) This is the minimum rate that a company must earn on its assets in order to satisfy the company’s shareholders (most importantly, the creditors and the owners). WACC is calculated as a weighted average, or composite, of the various types of funds used over time, regardless of the specific financing used in a given year. (Birgham & Houston, 2009) The WACC is a useful tool to measure how a company is financed and what the costs are of its capital. Furthermore WACC sets the minimum level that a company has to earn in order to satisfy creditors and owners (see above), therefore the model can be used as a benchmark figure (a minimum return rate) that a new project has to meet. The expected rate of return when evaluating such new projects has to be higher than the WACC (benchmark) in order to be profitable. We don’t agree with the way Joanna Cohen calculated the WACC. Her assumptions made to calculate the cost of equity by the CAPM were not accurate. She only made general assumptions about the general......

Words: 1930 - Pages: 8

Free Essay

Friendly Card

...valuable information, it makes sense to blend them to arrive at one composite growth rate to use in the valuation. This chapter examines different approaches to estimating future growth, and discusses the determinants of growth. Question 1 - Arithmetic and Geometric Means The following are the earnings per share of Thermo Electron, a company that designs cogeneration and resource recovery plants, from 1987 to 1992: |Year |EPS | |1987 |0.67 | |1988 |0.77 | |1989 |0.90 | |1990 |1.10 | |1991 |1.31 | |1992 |1.51 | A. Estimate the arithmetic average growth rate in earnings per share from 1987 to 1992. B. Estimate the geometric average growth rate in earnings per share from 1987 to 1992. C. Why are the growth rates different? Question 2 - Linear and Log-linear Models of Earnings Growth Consider again the example of Thermo Electron, described in the prior example, using the historical data from 1987 to 1992. A. Estimate the growth rate from a linear regression model. B. Estimate the growth rate from a log-linear regression model. C. Project the earnings per share in 1993 using both models. Question 3 - Dealing with Negative Earnings The earnings per share from 1987 to 1993 are reported below for McDonnell Douglas, an aircraft manufacturer with...

Words: 1084 - Pages: 5

Free Essay

Boeing

...the current market for commercial airplanes was depressed because of terrorism risks, war, and SARS, a contagious illness that resulted in global travel warnings. Boeing’s board of directors would need to weigh those considerations before granting final approval to proceed with the project. The task for students is to evaluate the 7E7 project against a financial standard, the investors’ required returns. The case gives internal rates of return (IRR) for the 7E7 project under base-case and alternative forecasts. The students must estimate a weighted-average cost of capital (WACC) for Boeing’s commercial-aircraft business segment in order to evaluate the IRRs. As a result of that analysis, the students identify the key value drivers and distinguish, on a qualitative basis, the key gambles that Boeing is making. The general objective of this case is to exercise students’ skills in estimating a weighted-average cost of capital and cost of equity. The need for students to estimate a segment WACC draws out their abilities to critique different estimates of beta and to manipulate the levered-beta formulas. Boeing competes in both the commercial aircraft and the defense business. Thus, deriving the appropriate benchmark WACC for the 7E7 project requires isolating the commercial aircraft component from Boeing’s overall corporate WACC. In doing so,...

Words: 7290 - Pages: 30

Premium Essay

Sales

...Market Potential Apple is looking to capitalize the organization’s share in the tablet market for the 2012 fiscal year. Market potential is defined as “the total expected sales of a given product or service for the entire industry in a specific market over a stated period of time” (Spiro & Stanton, 2008, p. 351). The tablet market potential in 2011 was around 116 million units. In 2012, the tablet market potential is expected to grow at the same rate if not more with the number of units totaling 140 million. The market potential for the iPad 2 also can be stated for men and women ages 16-55 years of age in multiple countries around the world. Sales Potential Market potential overviews the forecasted amount of units that will be sold for the industry and not the organization itself. If Apple wants to determine how the organization can capitalize on the 120 million units expected to sell in the tablet industry for 2012, the company must determine the sales potential for the iPad2. Sales potential refers to the “maximum share (or percentage) of market potential that an individual firm can reasonably expect to achieve” (Spiro & Stanton, 2008, p. 351). In the second half of 2011, the iPad 2 has accounted for 68.3% of the approximately 116 million units sold in the tablet market (Peckham, 2011). It is reasonable to agree that in the coming years Apple can expect to see between 55 to 60% market share in the tablet market. In 2012, Apple’s sales potential for the iPad 2 can......

Words: 509 - Pages: 3