Resources: Appendix A, Ch. 1 PowerPoint®, and Ch. 6 of Understanding Financial Statements Write a 750- to 1,050-word paper evaluating the financial health of a company. Highlight the importance of...

Financial analysis – Wal-Mart Stores Inc. 1
Financial Analysis – Wal-Mart Stores Inc.
Financial analysis – Wal-Mart Stores Inc. 2


Financial Analysis – Wal-Mart stores Inc.
Introduction
Wal-Mart stores Inc. is largest multinational departmental and warehouse store
incorporated in United States of America. Wal-Mart Stores was established in year 1962 by its
founder Sam Walton. The basic vision of Sam Walton was to make goods available to the
consumers at very low cost so that the consumer will derive the benefit and in turn the stores will
increase the total number of customers it have. (10K Wal-Mart Stores Inc. )
Wal-Mart stores have been into the list of Fortune’s Global 500 for many years and also
ranked as number one. Wal-Mart is the world’s largest employer in terms of the number of
employees with more than 2 million people working for it. Sam Watson has given 3 policy goals
to define Wal-Mart business. First “respect for the individual”, second “Service to customers” &
third “Strive for excellence”. He built the organization on these three principles and these three
principles have helped the organization to become the world’s largest multination departmental
store company. (10K Wal-Mart Stores Inc. )
Company’s performance (fiscal year 2000 to 2012)
Sales of Wal-Mart doubled from year 2000 to 2008; in year 2000 company made total
sales of $153 billion which resulted in total earning $5.3 billion whereas in year 2008 company
made total sales of $375 billion which resulted in total earning $12.7 billion. (Appendix – 1)
Increase in sales by almost 100% within a period of 8 years shows the efficient marketing
and pricing strategy of Wal-Mart. With the increase in sales revenue by 100% the profits has also
increased and that’s to by more than 100%, this shows that company has not only improvised its
pricing strategy rather it has also developed very efficient cost management techniques. The
increased in profits by more than 100% also reflects the advantages of large scale of operations.
Financial analysis – Wal-Mart Stores Inc. 3

The company has opened up 3378 new stores which have helped company to achieve such huge
sales target. On the whole company is doing well and the future looks prosperous. (Appendix –
1)
Financial highlights Wal-Mart Vs. Target Corporation Inc.
Investment in Wal-Mart seems better as compared to Target Corporation Inc. return on
asset is more in case of Wal-Mart as compared to target even though the profit margin of target is
higher than that of Wal-Mart. Also asset utilization of Wal-Mart is...