Wal-Mart
Essay Preview: Wal-Mart
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Background Information
Wal-Mart Inc.
Corporate Headquarters
702 Southwest 8th street
Bentonville, Ar 72716-8001
Top Executives
President and CEO: H. Lee Scott
Chairman of the Board: S. Robson Walton
Chairman, Executive Committee of the Board: David D. Glass
Chief Financial officer & Executive Vice President: Thomas M. Schoewe
Industry
General Merchandise, SIC code: 5399
Divisions
Wal-mart stores
Sams Club
International
Major Products
Hardware
House-wares
Auto Supplies
Small Appliances
Domestics
Grocery
Candy
Tobacco
Pharmaceuticals
Electronics
Health & Beauty Aids
Sporting Goods
Stationary
Jewelry
Shoes
1-hour Photo
Major Competitors
Target
Sears Roebuck & Co.
Kmart
Costco Wholesale
Most Successful Wal-mart Brands
Ol Roy
Great ValueТ
EquateТ
Financial Analysis
Profitability
Wal-mart experienced sales growth of 20% in the fiscal year of 2000. This impressive increase is a direct result of the companies expansion program. Wal-mart has also acquired a few international stores, which are doing very well and adding to the companies profit. As the table shows wal-mart is no stranger to climbing profits, in fact wal-mart has managed to increase sales by no less than 12% (typically more) each year for 11 consecutive years.
Net Earnings
Net Sales
Profitability
$5,377
$165,013
0.0326
$4,430
$137,634
0.0322
$3,526
$117,958
0.0299
$3,056
$104,859
0.0291
$2,740
$93,627
0.0293
Analysis
Liquidity
Wal-marts liquidity has been decreasing since 1996, which is a good sign from a growing company.
In 2000 wal-marts liquidity dropped off drastically, this is on account of their expansion projects. They are willing to take some short-term risks, because they are very confident it will pay off down the road. A lot of wal-marts money is being pumped into the super centers and also financing the over seas expansion.
Current Assets
Short-term Debt
Liquidity
$24,356
$25,803
0.9439
$21,132
$16,762
1.2607
$19,352
$14,460
1.3383
$17,331
$11,454
1.5131
$15,338
$9,973
1.5380
Analysis
Capital Management
To say wal-mart is healthy is an under statement, thriving is a bit more fitting. The company has plenty of assets to cover their overall debt. Wal-mart continues to widen the gap between total assets and overall debt, the companies leverage has been increasing for 5 years running. By keeping their assets high and debt low wal-mart is assuring increased profits and happy shareholders for years to come.
Total Assets
Overall Debt
Leverage
$70,349
$25,803
2.7264
$49,996
$16,762
2.9827
$45,384
$14,460
3.1386
$37,541
$11,454
3.2775
$32,819
$9,973
3.2908
Analysis
Asset Management
Once again wal-mart demonstrates why it is looked at as the 5th most admired company in the United States. Wal-marts inventory ratio has been on the rise for at least five years. As wal-mart grows and gains experience it creates a very strong base for it self. It is one of the few companies today that actually learns from and builds on its mistakes.
Cost of goods Sold
Total Inventory
Inventory Turnover
$129,664
$19,973
6.4920
$108,725
$17,076
6.3671
$93,438
$16,497
5.6639
$83,510