Financial Statement Analysis: A Financial Analysis Of Wal-Mart

For the final assignment of this class we were given the task of completing a financial statement analysis of a publicly traded company and I have chosen to use Wal-Mart. I chose Wal-Mart because it is the only major company that is in my home town. There are a few small hardware stores but nothing as big as Wal-Mart. I also happen to enjoy going to Wal-Mart to do my food shopping and to get everyday household supplies. There is so much to learn about the financial aspects of a business through accounting. It is important to understand financial reports and how they relate to the success of a company. These reports include balance sheets and income statements, which help accountants/owners and the public to grasp the overall financial condition
Wal-Mart was founded by Sam Walton, he is known for many different ways of doing business over his lifetime, which includes keeping prices down to entice more customers. Sam Walton wanted to make it easier for customers to shop in one location for all their day to day needs. Sam Walton was said to be the richest man in the world at one time and this was due to putting the customer first by cutting prices to make goods affordable for everyone. Wal-Mart is a one stop shopping center for most customers, it has everything you will need including some specialty items. For me it is the convenience of getting an oil change on my truck while I shop and it is always done by the time I finish shopping. Sam was in the military from 1942 until 1945. After serving his time in the military he moved his family Newport, Arkansas and gained many years in retail. This experience gave Sam the idea to open Walton’s 5&10 in the downtown area near his residence in 1950. I remember a small party store near my home in Jackson, Michigan when I was growing up. It was called a 5 and dime store and I believe this was similar to Sam Walton’s first store. In 1962 he opened his first Wal-Mart store. By this time Sam Walton had plenty of
The current ratio reveals the relative amount of working capital by dividing current assets by current liabilities: The quick ratio of cash + accounts receivable, divided by current liabilities brought their percentage to 20% in 2014 which shows an increase to 24% in 2015. This ratio is calculated by dividing quick assets by current liabilities. Quick assets are cash and other assets that are readily and quickly converted to cash. Then there’s the cash to liabilities ration where the cash is divided by the current liabilities which put Wal-Mart at 10.50% in 2014 and increased in 2015 to 14.00%. The recommendations for Wal-Mart based on the analysis that has been performed. Investors would have no problem to investing in this corporation. In 2014 the company had a few financial problems which they quickly overcame. According to the National Retail Federation (2015) “Wal-Mart has ranked number 1 in over 100 retailers. The positive in Wal-Mart is the increased revenue over the years. Wal-Mart has done so well for themselves that they have stores internationally as well as in the United