Financial Management
Company: Walmart
- evaluate its health based on its financial statements (which you may download from EDGAR or the company’s website).
- Compute the company’s current ratio, its debt ratio, its profit margin, and two other ratios you deem relevant to the understanding of the company as a whole.
- Compare these ratios to industry standard calculations. Also, try to identify major changes in the company’s balance sheet and income statement from one year to the next to identify trends in the company’s health. Is it improving or deteriorating over time? Briefly comment (in approximately 250 words) on your assessment of the health of the company given its ratios and the changes in its financial statements over time.
Solution Preview
Retail business is one of the crucial sectors in the business environment as the individuals or institutions involved in this sector are the final contact to the consumers, supplying them with the ready to use product. The retail sector is therefore the most productive in terms of its annual revenues, rates of employment creation and increasing the investment levels of a country. In the US, retail business is the 2nd largest economic activity which contributes to over $3.8 trillion sales in the food sector according to statistics taken in 2015 (Martínez, 2017). The sector also contributed to approximately 12% of the total employment rates in the US (Martínez, 2017). Wal-Mart is one of the most significant retailers dealing with all types of food supplies to the population. The store focuses on providing organic and fresh food items including vegetables, fruits, grains, fish, meats and other households putting into consideration the aspects of quality and variety for the consumers (Martínez, 2017). Judging from its financial records, Wal-Mart is doing well as the records are improving on an annual basis taking into account the gross profit, revenue, net income, earning per shares and other financial details.
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