Preview

Analysis of Wal-Mart's 2004 Financial Statements

Powerful Essays
Open Document
Open Document
4660 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Analysis of Wal-Mart's 2004 Financial Statements
ANALYSIS OF A FIRM’S FINANCIAL STATEMENTS

An Analysis of Wal-Mart’s 2004 Financial Statements

LeTourneau University

I. Executive Summary

A. Objective of paper

My objective is to analyze financial statements from the 2004 Wal-Mart Annual Report. Based on my findings and any relevant supplementary information provided about Wal-Mart and its operating environment, I will identify areas in which the company is performing well and advise management of any problem areas.

B. Summary of findings

Based on the information that I found on the financial statements, Wal-Mart Stores, Inc. is currently on the rise. They have increased their cash flow while decreasing their long-term debt. Their investing activities have decreased, but can be remedied with a good solid investment.

II. Firm, Industry, and Environment

A. Description of firm and its management

Wal-Mart Stores, Inc. (Wal-Mart), incorporated in October 1969, operates retail stores in various formats around the world. The Company operates through three segments: Wal-Mart Stores segment, which includes Supercenters, Discount Stores and Neighborhood Markets, Sam 's Club segment and International segment. The Wal-Mart Stores segment segment consists of three different traditional retail formats, all of which operate in the United States, and Wal-Mart 's online retail format, walmart.com. The Sam 's Club segment consists of membership warehouse clubs, which operate in the United States, and the segment 's online retail format, samsclub.com. At January 31, 2007, its International segment consisted of retail operations in 12 countries and Puerto Rico. In October 2006, the Company disposed of its South Korean and German operations (Reuters, 2007).

At January 31, 2007, the Company operated 1,075 discount stores, 2,256 supercenters, 579 Sam 's Clubs and 112 Neighborhood Markets in the United States. Internationally, at January 31, 2007, the Company operated


Bibliography: Annual Report. (2004). Wal-Mart Stores Inc. Retrieved June 6, 2007 from http://online.letu.edu/@@6e5edd58d08a141eb17dcc5346a0b857/courses Juhasz, A. (2005, December 13). Wal-Mart: Reaping profits from WTO & NAFTA. Organic Consumers Association Wikipedia. Wal-Mart Stores Inc. Retrieved June 23, 2007 from http://en.wikipedia.org/wiki/Wal-Mart Wikipedia
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Mgt/521 Management
    • 916 Words
    • 4 Pages

    Mgt/521 Management

    The company that is listed as number one on the Fortune 500 list is Wal-Mart. This company has much strength that makes it very interesting for investment. Wal-Mart was founded by Sam Walton in the 1950’s and faced competition among many regional discount stores. In 1962 Wal-Mart officially began with its first store in Rogers, Arkansas. Wal-Mart now has over 600 discount stores in the United States and stores located in 28 countries. No matter the size of the company its purpose has not changed over the years. Mr. Sam Walton said, “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.”(1)…

    • 916 Words
    • 4 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Walmart Swot Analysis Paper
    • 170 Words
    • 1 Page

    Walmart Swot Analysis Paper

    Wal-Mart Stores, Inc. is an American based international retail chain headquartered in Bentonville, Arkansas. The corporation operates within the Miscellaneous General Merchandise Stores SIC classification and the All Other General Merchandise Stores NAICS classification. Wal-Mart specializes in the retail of groceries, electronics, apparel, appliances, home furnishings, hardware, sporting goods and health care products. The corporation is split into three business segments: Walmart US, Walmart International, and Sam’s Club. Wal-Mart currently resides atop the Fortune 500 list as the highest grossing corporation in the United States with a reported $485 billion in revenues for the year ended January 31st, 2015.…

    • 170 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Good Essays

    Wal-Mart Economic Indicators
    • 1203 Words
    • 5 Pages

    Wal-Mart Economic Indicators

    Although Wal-Mart is a very successful company, there are still many areas of improvement they need to consider. The problem a lot of companies make is that once they reach a certain revenue dollar amount they feel they have arrived. Although having increasing revenues consistently is key to success, there are many other factors that measure a company’s success.…

    • 1203 Words
    • 5 Pages
    Good Essays
    Read More
  • Better Essays

    Mgt/330 Week 2 Team Paper External/Internal Factors of Planning
    • 1307 Words
    • 6 Pages

    Mgt/330 Week 2 Team Paper External/Internal Factors of Planning

    During the past decade, retail markets have undergone many changes in their processes, services, and formats. The last part of distribution of the market strategy, retailing serves as a bridge between the final consumer and the mass producers of products. Retailing has reached every corner of the globe, and Wal-Mart has been eying areas where the retail market is unorganized or poorly organized. It, along with other corporations, has used liberalization, privatization, and globalization to become potential players in the commercial opportunities these areas embody. “Wal-Mart Stores, Inc. operates Wal-Mart discount stores, Supercenters, Neighborhood Markets and Sam’s Club locations in the United States. The Company operates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom.”…

    • 1307 Words
    • 6 Pages
    Better Essays
    Read More
  • Powerful Essays

    Wal-Mart Financial Analysis - Fin515
    • 2024 Words
    • 9 Pages

    Wal-Mart Financial Analysis - Fin515

    Surprisingly, at least to me, it seems as though Target is better equipped to handle it’s short-term…

    • 2024 Words
    • 9 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Walmart
    • 6499 Words
    • 26 Pages

    Walmart

    The first Wal-Mart store was opened in Rogers Arkansas in the Year 1962. From Wal-Mart’s company website a common misconception people have in regards to discount retailing is put to rest. That being this was the year it all started, When Kmart, Target, and Wal-Mart first opened. In actuality however, the chain of variety stores Sam Walton owned during the 1950’s faced stiff competition for many regional discount stores. In 1972, Wal-Mart stock was offered for the first time on the New York Stock Exchange. With this infusion of capital, the company grew to 276 stores in 11 states by the end of the decade. Also from the company’s official website, it is important to note that in 1983 the first Sam’s Club members-warehouse store opened. The first Supercenter opened in 1988, featuring a complete grocery, and 36 departments of general merchandise. By 1989, there were 1,402 Wal-Mart stores and 123 Sam’s Club locations. Employment had increased tenfold. Sales had grown from $1 billion in 1980, to $26 billion. Wal-Mart’s company website states that Today, 7,262 stores and club locations in 14 markets employ more than 1.9 million associates,…

    • 6499 Words
    • 26 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Wal-Mart vs. Target Essay Example
    • 3752 Words
    • 15 Pages

    Wal-Mart vs. Target Essay Example

    Wal-Mart originated in 1969 under the leadership of Sam Walton. Wal-Mart is the largest superstore chain in the United States. Their products vary from groceries and perishable items to car care in some stores. However Wal-Mart is not just made up of the traditional supercenters that over 100 million people frequent weekly. Wal-Mart is comprised of three separate segments. A segment of a company is defined by a subsidiary or part of a corporation that makes up more than ten percent of its assets or revenues. “Wal-Mart Stores” is a heading that includes the company’s supercenters, discount stores, and neighborhood markets that are located in the United States as well as walmart.com. The “Sam’s Club” segment comprises the warehouse membership clubs in the United States and samsclub.com. The “International” segment is made up…

    • 3752 Words
    • 15 Pages
    Powerful Essays
    Read More
  • Good Essays

    Wal-Mart Financial Health Evaluation
    • 887 Words
    • 4 Pages

    Wal-Mart Financial Health Evaluation

    When analyzing the annual financial reports for Wal-Mart it is easy to see a positive outlook in Wal-Mart 's future of financial health. Looking at and comparing the ratios with other companies in the same industry, Wal-Mart seems to be the easy frontrunner. A review of the current, debt/equity, inventory turnover, net profit margin, Return on Total Assets (ROA), Return on Equity (ROE), and quick ratios all indicate that the trend of leading the retail industry will continue. The current ratio (which is the current assets divided by current liabilities) is a measure of how much in liabilities a company has compared to its assets. Wal-Mart in 2010 had a current ratio of 0.9 and the industry had a 1.1. The quick ratio (which is current assets minus inventory divided by current liabilities) is a measure of a company 's ability meet short-term obligations. In 2010 Wal-Mart had a quick ratio of 0.3 compared to the industry of 0.4. The next ratio is the inventory turnover ratio which, according to Fraser, L. M., & Ormiston (2007), is defined as the cost of goods sold divided by the remaining inventory at the end of the accounting cycle. In 2010, Wal-Mart’s inventory turnover ratio was 9.1 times compared to a 9.2 times in 2009. Even though this inventory turnover ratio is a little lower than 2009 it is still about the same as industry average, which is 8.5. This indicates that Wal-Mart is trending about the same as similar companies. Now looking at the debt/equity ratio for 2010 was 0.73 compared to the industry of 0.67. This indicates that Wal-Mart is trending in debt ratio also with their competitors. The return on assets was 9.1 in 2010 compared to 8.5 for the industry. This indicates that Wal-Mart is making more money on their investments than their competitors. Wal-Mart is also staying consistent because in 2009 they also…

    • 887 Words
    • 4 Pages
    Good Essays
    Read More
  • Powerful Essays

    Best Buy Internal and External Analysis
    • 5772 Words
    • 24 Pages

    Best Buy Internal and External Analysis

    Best Buy has positive growth from 2007 to 2010. However these growths falls below S&P retailing group and S&P 500.…

    • 5772 Words
    • 24 Pages
    Powerful Essays
    Read More
  • Best Essays

    Comparison Of Wal-Mart And Target Corporation
    • 2257 Words
    • 10 Pages

    Comparison Of Wal-Mart And Target Corporation

    Wal-Mart is a multinational retail corporation that was founded by Sam Walton in 1962 in Rogers, Arkansas. It operates in various chains of large discount departmental stores and warehouse stores. Wal-Mart operates in three segments: Wal-Mart U.S., online retail operations, walmart.com; and Wal-Mart International which includes several formats of retail stores, restaurants, wholesale clubs, including Sam 's Clubs. Wal-Mart’s segments have business in six merchandise units: grocery, electronics, pharmacy, stationery, apparel and furniture’s. The unique aspect of this company is that the segment also provides financial services and related products, including money orders, prepaid cards and wire transfers. Today, Wal-Mart still remains a family owned business and is the biggest private employer in the world. Its top competitor include: target, Kmart, Costco, and BJ’S Wholesale…

    • 2257 Words
    • 10 Pages
    Best Essays
    Read More
  • Powerful Essays

    Organizational Structure
    • 1489 Words
    • 6 Pages

    Organizational Structure

    Wal-Mart has been sectioned into a three product divisional structure. The three include Wal-Mart Stores (located here in the United States), Sam 's Club (Located here in the United States), and some global…

    • 1489 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Walmart Research Paper
    • 1876 Words
    • 8 Pages

    Walmart Research Paper

    I have chosen Wal-Mart Stores Inc for my final paper topic selection they are also known as WMT on the New York Stock Exchange (NYSE) . I am intrigued with their success but also scared about how dependant I have become with my shopping at their stores. This store is not only a retail giant it is also retail bully that forces other stores to go out of business. Wal-Mart not only specializes in retail items such as clothing, jewelry, lawn, and garden they also have super stores that specialize in pharmacy, groceries, auto repair, and check cashing in addition to the services mentioned above. The only other store that has similar retail items and services is Super K Mart which has seriously declined in retail status over the past 10 years. Wal-Mart offers many services and has found a way not only to be competitive but to be dominate when it comes to cost savings. Their product lines are name brand in most cases and are offered at below retail prices on a regular basis which most stores in their competition range can't compete with. These stores are easily accessible in rural and urban city settings, Wal-Mart has 8,970 stores across the world. This global giant is currently the biggest private employer across the world employing over 2 million people world wide and still growing. This store has a great impact on the US economy it helps boost US consumer spending habits and helps the employment rate. I can’t think of another privately owned company that has this big of an impact on the economy. There are a lot complaints about the low pay rates the company offers to its employees but Wal-Mart is offering jobs when other industries and companies are laying off and putting hiring freezes on new positions. These job opportunities may not pay well but it’s most definitely an alternative to being unemployed with no income. Overall Wal-Mart is a solid company that has a broad business portfolio in investments, social responsibility, and ethics which for the most part…

    • 1876 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Kroger's Grocery Case Summary
    • 1117 Words
    • 5 Pages

    Kroger's Grocery Case Summary

    The company operates about 3,620 stores, including some 2,465 supermarkets and multidepartment stores, in about 30 states.…

    • 1117 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Mis 525 Final Project
    • 2887 Words
    • 12 Pages

    Mis 525 Final Project

    The company operates under three different business segments which include Wal-Mart U.S., Wal-Mart International, and the Sam’s Club segment. The Wal-Mart segment at the end of 2012 accounted for 60% of its net sales, Wal-Mart international for 28% and Sam’s Club for 12%.…

    • 2887 Words
    • 12 Pages
    Powerful Essays
    Read More
  • Good Essays

    Supermarkets of the United States and Total Sales
    • 2625 Words
    • 11 Pages

    Supermarkets of the United States and Total Sales

    Volume total represents combined sales of all Wal-Mart formats in the U.S. and Canada, which account for approximately 74% of total corporate sales. WalMart operates 2,882 supercenters in the U.S. and 109 in Canada; 723 discount stores in the U.S. and 212 in Canada; and 608 Sam’s Clubs, 181 Neighborhood Markets, four Marketside stores and two Supermercados in the U.S. Supercenters, discount stores, Neighborhood Markets and other U.S. formats accounted for an estimated $262 billion, or 62% of total sales; Sam’s Club for $49 billion, or 12%; and international for $109 billion, or 26%.…

    • 2625 Words
    • 11 Pages
    Good Essays
    Read More