Walmart Financial Analysis

Wal-Mart’s Financial Reporting Analysis 1
SECTION 1: EXECUTIVE SUMMARY
In this section provide a brief overview of the corporation. Participants are not
limited but, at a minimum, should provide the following information:
• Official name of the corporation
Wal-Mart Stores Inc.
• Location of the corporate headquarters
702 SW 8th Street Bentonville, AR 72716
• The state in which the company is incorporated
Arizona
• Company Internet address
http://www.walmart.com
• Stock symbol of the corporation and the exchange on which it is traded
WMT
• Fiscal year-end of the corporation
January 31, 2011
• Date of the 10-K filing according to the financial statements provided
Last Tuesday of March
• The Company’s independent accountant/auditor
Wal-Mart's independent accountants are responsible for auditing Wal-Mart's
• The primary products(s) and/or services (s) of the corporation
Wal-Mart is one of the largest chains, which operates in three large segments: The
Walmart U.S., the Walmart International, and the Sam’s Club. In this report we are
focusing mainly on Walmart US. This latter is has a momentous presence in the retail
industry, operating throughout the United States. “ The Walmart U.S segment includes
the Company’s mass merchant concept under the Walmart or Wal-Mart brand, as well
as walmart.com.” (Reuters, n.d)
Walmart offers various lines of products and services including the following:
● Retail goods, which consists of a large variety of categories, namely electronics,
home furnishing, sporting goods, baby products, and grocery items (Washington,
n.d)
● Photo Services: Walmart makes a photo lab available for customers inside the
stores and online. They are provided the possibility to upload their photos via the
company’s website, or drop them off for developing via a store kiosk
(Washington, n.d)
● Pharmacy: Walmart started pharmacy operations as of 2006. Since then, it has
been providing customers with prescriptions, which they could pick-up in-store or
be shipped by mail. Walmart has available a catalog of 300 generic medications
for no more than four dollars in-store, and ten dollars for a 90-day supply
(Washington, n.d)
● Financial Services: Besides the aforementioned products and services, Walmart
also provides its customers with a wide range of financial services, namely a
non-annual-fee credit card, a debit card ready to obtain in-strore or online, money
transfer service through MoneyGram, and check cashing and check printing. At
Walmart, customers can also purchase money orders, gift cards, and pays bills
(Washington, n.d)
● Wireless Services: Last but not least, Walmart partnered with T-mobile only to
give birth to The Walmart Family Talk Wireless, which is a service that provides
customers with a family plan for unlimited text and voice calls (Washington, n.d)
SECTION2: BALANCE SHEET ANALYSIS
Vertical Analysis
WAL-MART STORES INC (WMT) BALANCE SHEET
Fiscal year ends in January 2013-01 % 2012-01 %
Assets
Current assets
Cash
Cash and cash equivalents 7781000 3.83% 6,550,000 3.39%
Total cash 7,781,000 3.83% 6,550,000 3.39%
Receivables 6,768,000 3.33% 5,937,000 3.07%
Inventories 43,803,000 21.57% 40,714,000 21.05%
Prepaid expenses 1,588,000 0.78% 1,685,000 0.87%
Other current assets 89,000 0.05%

Total current assets 59,940,000 29.51% 54,975,000 28.42%
Non-current assets
Property, plant and equipment
Land 25,612,000 12.61% 23,499,000 12.15%
Fixtures and equipment 43,699,000 21.52% 41,916,000 21.67%
Other properties 102,413,000 50.42% 95,523,000 49.39%
Property and equipment, at cost 171,724,000 84.55% 160,938,000 83.21%
Accumulated Depreciation (55,043,000) (27.10)% (48,614,000) (25.14)%
Property, plant and equipment, net 116,681,000 57.45% 112,324,000 58.08%
Goodwill 20,497,000 10.09% 20,651,000 10.68%
Other long-term assets 5,987,000 2.95% 5,456,000 2.82%
Total non-current assets 143,165,000 70.49% 138,431,000 71.58%
Total assets 203,105,000 100.00% 193,406,000 100.00%
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt 12,392,000 6.10% 6,022,000 3.11%

Capital leases 327,000 0.16% 326,000 0.17%
Accounts payable 38,080,000 18.75% 36,608,000 18.93%
Taxes payable 5,062,000 2.49% 1,164,000 0.60%
Accrued liabilities 15,957,000 7.86% 18,154,000 9.39%
Other current liabilities 26,000 0.01%
Total current liabilities 71,818,000 35.36% 62,300,000 32.21%
Non-current liabilities
Long-term debt 38,394,000 18.90% 44,070,000 22.79%
Capital leases 3,023,000 1.49% 3,009,000 1.56%
Deferred taxes liabilities 7,613,000 3.75% 7,862,000 4.07%
Minority interest 5,395,000 2.66% 4,446,000 2.30%
Other long-term liabilities 519,000 0.26% 404,000 0.21%
Total non-current liabilities 54,944,000 27.05% 59,791,000 30.91%
Total liabilities 126,762,000 62.41% 122,091,000 63.13%
Stockholders' equity
Common stock 332,000 0.16% 342,000 0.18%
Additional paid-in capital 3,620,000 1.78% 3,692,000 1.91%

Retained earnings 72,978,000 35.93% 68,691,000 35.52%
Accumulated other comprehensive
income (587,000) (0.29)% (1,410,000) (0.73)%
Total stockholders' equity 76,343,000 37.59% 71,315,000 36.87%
Total liabilities and stockholders'
equity 203,105,000 100.00% 193,406,000 100.00%
Year to Year Change
Fiscal year ends in January 2013-01 2012-01 +/- $ %
Assets
Current assets
Cash
Cash and cash equivalents 7,781,000 6,550,000 1,231,000 18.79
Total cash 7,781,000 6,550,000 1231000 18.79
Receivables 6,768,000 5,937,000 831000 14.00

Inventories 43,803,000 40,714,000 3089000 7.59
Prepaid expenses 1,588,000 1,685,000 (97000) (5.76)
Other current assets 89,000 (89000) (100.00)
Total current assets 59,940,000 54,975,000 4965000 9.03
Non-current assets
Land 25,612,000 23,499,000 2113000 8.99
Fixtures and equipment 43,699,000 41,916,000 1783000 4.25
Other properties 102,413,000 95,523,000 6890000 7.21
Property and equipment, at cost 171,724,000 160,938,000 10786000 6.70
Accumulated Depreciation (55,043,000) (48,614,000) (6429000) 13.22
Property, plant and equipment, net 116,681,000 112,324,000 4357000 3.88
Goodwill 20,497,000 20,651,000 (154000) (0.75)
Other long-term assets 5,987,000 5,456,000 531000 9.73
Total non-current assets 143,165,000 138,431,000 4734000 3.42
Total assets 203,105,000 193,406,000 9699000 5.01

Liabilities
Current liabilities
Short-term debt 12,392,000 6,022,000 6370000 105.78
Capital leases 327,000 326,000 1000 0.31
Accounts payable 38,080,000 36,608,000 1472000 4.02
Taxes payable 5,062,000 1,164,000 3898000 334.88
Accrued liabilities 15,957,000 18,154,000 (2197000) (12.10)
Other current liabilities 26,000 (26000) (100.00)
Total current liabilities 71,818,000 62,300,000 9518000 15.28
Long-term debt 38,394,000 44,070,000 (5676000) (12.88)
Capital leases 3,023,000 3,009,000 14000 0.47
Deferred taxes liabilities 7,613,000 7,862,000 (249000) (3.17)
Minority interest 5,395,000 4,446,000 949000 21.35
Other long-term liabilities 519,000 404,000 115000 28.47
Total non-current liabilities 54,944,000 59,791,000 (4847000) (8.11)
Total liabilities 126,762,000 122,091,000 4671000 3.83

Common stock 332,000 342,000 (10000) (2.92)
Additional paid-in capital 3,620,000 3,692,000 (72000) (1.95)
Retained earnings 72,978,000 68,691,000 4287000 6.24

823000 (58.37)
income (587,000) (1,410,000)
Total stockholders' equity 76,343,000 71,315,000 5028000 7.05
Total liabilities and stockholders'
equity 203,105,000 193,406,000 9699000 5.01
Horizontal Analysis
Current Prior
Fiscal year ends in January. Year/Base Year/Base
Assets
Current assets
Cash
Cash and cash equivalents 105.22% 88.57%
Total cash 105.22% 88.57%
Receivables 132.99% 116.66%
Inventories 120.61% 112.10%
Prepaid expenses 53.65% 56.93%
Other current assets 0.00% 67.94%
Total current assets 115.51% 105.94%
Non-current assets
Land 105.03% 96.36%
Fixtures and equipment 106.88% 102.52%
Other properties 114.79% 107.07%
Property and equipment, at cost 111.16% 104.17%
Accumulated Depreciation 118.09% 104.30%
Property, plant and equipment, net 108.16% 104.12%
Goodwill 122.28% 123.19%
Other long-term assets 145.00% 132.14%

Total non-current assets 111.18% 107.50%
Total assets 112.42% 107.05%
Liabilities
Current liabilities
Short-term debt 217.94% 105.91%
Capital leases 97.32% 97.02%
Accounts payable 113.48% 109.09%
Taxes payable 3224.20% 741.40%
Accrued liabilities 85.33% 97.08%
Other current liabilities 0.00% 55.32%
Total current liabilities 122.80% 106.52%
Long-term debt 94.35% 108.30%
Capital leases 95.97% 95.52%
Deferred taxes liabilities 113.93% 117.66%
Minority interest 199.45% 164.36%

Other long-term liabilities 127.21% 99.02%
Total non-current liabilities 102.44% 111.47%
Total liabilities 113.06% 108.89%
Common stock 0.00% 0.00%
Additional paid-in capital 101.20% 103.21%
Retained earnings 114.09% 107.39%
income (58.82%) (141.28%)
Total stockholders' equity 111.38% 104.05%
Total liabilities and stockholders' equity 112.42% 107.05%
Balance sheet Analysis
The vertical, horizontal and year to year change analysis of the balance sheet of
Walmart shows that the company’s current assets for the current year has increased
from the previous year with a significant increase in cash and account receivables. The
company has also invested in long-term assets in the current year. Though the
company got rid of some of its current liabilities from the previous year, its short-term
debt has increased by more than 100%. The company has also been successful in
paying off a significant portion of its long-term debt.

Though the increase in cash indicates profitability, a persistent increase in cash
also indicates that the company is unable to make the most of its cash in hand.
Therefore, the company should watch its cash in hand closely. The company also
needs to revisit its credit policies to ensure that it does not have a lot of money stuck in
account receivables.
There has been a slight drop in the goodwill of the company from the previous
year, which indicates a loss of confidence of the shareholders in the company. The
company’s short-term liabilities have increased by more than 12%. It has a significant
investment in Land and other long-term assets. The company’s retained earnings form
a major part of their equity. The company has been very successful in keeping a
balance between its debt and equity financing.
SECTION 3: INCOME STATEMENT
Vertical Analysis
WAL-MART STORES INC (WMT) INCOME STATEMENT
Fiscal year ends in
January 2013-01 % 2012-01 % 2011-01 %
Revenue 469,162,000 100.00% 446,950,000 100.00% 421,849,000 100.00%
Cost of revenue 352,488,000 75.13% 335,127,000 74.98% 315,287,000 74.74%

Gross profit 116,674,000 24.87% 111,823,000 25.02% 106,562,000 25.26%
Operating expenses
Sales, General and
administrative 88,873,000 18.94% 85,265,000 19.08% 81,020,000 19.21%
Total operating expenses 88,873,000 18.94% 85,265,000 19.08% 81,020,000 19.21%
Operating income 27,801,000 5.93% 26,558,000 5.94% 25,542,000 6.05%
Interest Expense 2,251,000 0.48% 2,322,000 0.52% 2,205,000 0.52%
Other income (expense) 187,000 0.04% 162,000 0.04% 201,000 0.05%
Income before income taxes 25,737,000 5.49% 24,398,000 5.46% 23,538,000 5.58%
Provision for income taxes 7,981,000 1.70% 7,944,000 1.78% 7,579,000 1.80%
Minority interest 757,000 0.16% 688,000 0.15% 604,000 0.14%
Other income 757,000 0.16% 688,000 0.15% 604,000 0.14%
Net income from continuing
operations 17,756,000 3.78% 16,454,000 3.68% 15,959,000 3.78%
Net income from
discontinuing ops -67,000 -0.01% 1,034,000 0.25%
Other -757,000 -0.16% -688,000 -0.15% -604,000 -0.14%

Net income 16,999,000 3.62% 15,699,000 3.51% 16,389,000 3.89%
Year to Year Change
Fiscal year ends

+/- $ % +/- $ %
in January 2013-01 2012-01 2011-01
Revenue 469,162,000 446,950,000 22,212,000 4.97 421,849,000 47,313,000 11.22
Cost of revenue 352,488,000 335,127,000 17,361,000 5.18 315,287,000 37,201,000 11.80
Gross profit 116,674,000 111,823,000 4,851,000 4.34 106,562,000 10,112,000 9.49
Operating
expenses
Sales,
General and
administrative 88,873,000 85,265,000 3,608,000 4.23 81,020,000 7,853,000 9.69
Total operating
expenses 88,873,000 85,265,000 3608000 4.23 81,020,000 7,853,000 9.69
Operating income 27,801,000 26,558,000 1,243,000 4.68 25,542,000 2,259,000 8.84

Interest Expense 2,251,000 2,322,000 (71,000) (3.06) 2,205,000 46,000 2.09
Other income
(expense) 187,000 162,000 25,000 15.43 201,000 (14,000) (6.97)
Income before
income taxes 25,737,000 24,398,000 1,339,000 5.49 23,538,000 2,199,000 9.34
Provision for
income taxes 7,981,000 7,944,000 37,000 0.47 7,579,000 402,000 5.30
Minority interest 757,000 688,000 69000 10.03 604,000 153,000 25.33
Other income 757,000 688,000 69000 10.03 604,000 153,000 25.33
Net income from
continuing 1302000 7.91
operations 17,756,000 16,454,000 15,959,000 1,797,000 11.26
Net income from
discontinuing ops (67,000) 67000 (100.00) 1,034,000 (1,034,000) (100.00)
Other (757,000) (688,000) (69000) 10.03 (604,000) (153,000) 25.33
Net income 16,999,000 15,699,000 1300000 8.28 16,389,000 610,000 3.72

Horizontal Analysis
Current Prior Two Years
Fiscal year ends in January Year/Base Year/Base ago/Base
Revenue 111.22% 105.95% 100.00%
Cost of revenue 111.80% 106.29% 100.00%
Gross profit 109.49% 104.94% 100.00%
Operating expenses
Sales, General and
administrative 109.69% 105.24% 100.00%
Total operating expenses 109.69% 105.24% 100.00%
Operating income 108.84% 103.98% 100.00%
Interest Expense 102.09% 105.31% 100.00%
Other income (expense) 93.03% 80.60% 100.00%
Income before income taxes 109.34% 103.65% 100.00%

Provision for income taxes 105.30% 104.82% 100.00%
Minority interest 125.33% 113.91% 100.00%
Other income 125.33% 113.91% 100.00%
Net income from continuing
operations 111.26% 103.10% 100.00%
Net income from discontinuing ops 0.00% (6.48%) 100.00%
Other 125.33% 113.91% 100.00%
Net income 103.72% 95.79% 100.00%
Income Statement Analysis
Among the items to consider:
a. The money a business makes from its products and services is considered
the company's Total Revenue. Wal-Mart Stores Inc.'s net sales increased
from 2011 to 2012 and from 2012 to 2013
b. Cost of revenue taken out from Sales revenue gives the Gross Profit. Total
revenue and Cost of revenue both were observed to increase over years.
Wal-Mart Stores Inc.'s Gross Profit increased from 2011 to 2012 and from
2012 to 2013
c. Income taxes are excluded from the Business Total income which is
calculated as the Net income. Wal-Mart Stores Inc.'s Net income decreased
from 2011 to 2012 as the net income from discontinued ops was in loss and
increased from 2012 to 2013
d. Operating Income divided by the total revenue gives the Profit margin. It
means that means that a company can deliver merchandise or services to
customers at much cheaper prices than competitors and still make money.
Wal-Mart Stores Inc.'s Profit margin increased from 2011 to 2012 and from
2012 to 2013.
e. Revenues are calculated as the total amount made by the sales in that annual
period where as Expenses are calculated as the total amount used to make
those products. According to the Income sheet walmart’s revenue and
expenses have a positive increased from 2011 to 2013. This implies walmart
sold more products within the same period of time than their previous year
f. Discontinued Operations - there was a positive Net income from discontinued
operations in 2011,which turned into loss in 2012. This improved in 2013
where is there was no positive net income but did not run into loss either. This
implies that walmart made income by discontinuing some operations in 2011
but could not achieve the same continuing forward in the future years.
Extraordinary items - There are no Extra-ordinary items in the income
statement.
Changes in the accounting policy - EBITDA increased from 2011 to 2013
each year. There are no good or bad EBITDA numbers. Any positive number
implies the company has profits. The income sheet implies that walmart has
profitability improved every year from 2011 to 2013.

SECTION 4: RATIO ANALYSIS
Compute the ratios for the most current year in following categories. The calculations used to
determine the answers for the ratio analysis must be included in the appendix.
Liquidity Ratios
Formula Ratio
Current Ratio Current assets/current liabilities 0.83
Acid (Quick) Ratio (Cash equivalent+marketable 0.20
securities+net receivable)/
current liabilities
Working Capital Current assets- current liabilities (11,878)
Cash Ratio (cash equivalents+marketable 0.11
securities)/ current liabilities
Days Sales in Receivables Gross receivable/(net sales/365) 5.3
Accounts Receivable Turnover Net Sales/Average Gross 68.87

Receivables
Accounts Receivable Turnover in Days Average Gross Receivables/(Net 5 days

Sales/ 365)
Days Sales in Inventory Ending Inventory/(Cost of Goods 45.3578

Sold/365)
Inventory Turnover Cost Of Goods Sold/ Average 10.64

Inventory
Inventory Turnover in Days Average Inventory / (Cost of 34 days

Goods Sold/365)
Operating Cycle Account Receivable Turnover in 39 days
Days+ Inventory Turnover in
Days
Sales to Working Capital Sales/ Average Working Capital -48.54
Operating Cash Flow to Current Operating Cash Flow/ Current No debt
Maturities of Long-term Debt and Maturities of Long Term Debt payable within
and Current Notes Payable one year

Current Notes Payable
Long-Term Debt Paying Ability
Formula Ratio
Times Interest Earned Recurring Earnings, 12.43

Excluding Interest Expense,
Tax Expense, Equity
Earnings and Non-
controlling Earnings ÷
Interest Expense, Including
Capitalized Interest
Debt Ratio Total Liabilities / Total 0.62
Assets
Debt / Equity Ratio Total Liabilities / 1.65
Shareholders Equity
Debt to Tangible Net Worth Ratio Total Liabilities ÷ 1.65
(Shareholders Equity –
Intangible Assets)
Operating Cash Flow / Total Debt 0.47
Profitability Ratios
Formula Ratio
Net Profit Margin Net Income Before Non- 3.62
Controlling Interests, Equity
Income and Non recurring
Items / Net Sales
Total Asset turnover Net Sales/ Average Total Sales 469162000/4
58055000=1.
0242
Return on Assets Net Income Before Non- 8.57

Controlling Interests and Non-
Recurring Items/ Average Total
Assets
Sales to Fixed Assets Net Sales/ Average Fixed 469162000/5
Assets (exclude Construction in 7457000=8.1
progress) 654
Return on Investment Net Income Before Non 18.2%
Controlling Interest & Non
Recurring Items + {(Interest
Expense) + (1- Tax Rate)} / Avg
(Long term Liabilities + Equity)
Return on Total Equity Net Income Before Non 22.27
recurring Items - Dividend on
Redeemable Preferred Stocks /
Avg Total Equity
Return on Common Equity
Gross Profit Margin Gross Profit / Net Sales 24.38
Investor Ratios
Formula Ratio
Degree of Financial Leverage Earnings Before Interests and 27988000/257
Taxes/ Earning Before Tax 37000=0.9709
EPS - Basic ( Net Income- Preferred Dividends)/ 5.04
Weighted Average Number of
Common Shares Outstanding
EPS - Diluted (Operating Cash Flow- Preferred 5.02
Dividends)/ Diluted Weighted
Average Common Shares
Outstanding
Price / Earnings Ratio Market Price Per Share/ Diluted 14.48
Earning Per Share, before non-
returning items
Percentage of Earnings Retained (Net Income before non-returning
Items – All Dividends)/ Net Income
Before Non-returning Items
Dividend Payout Dividends Per Common 1.59
Share/Diluted Earning Per Share
Before Non-returning Items
Dividend Yield Dividends Per Common Share/
Market Price Per Common Share
Book Value ( Total Shareholders’ Equity- 23.04
Preferred Stock Equity)/ Number of
Common Shares Outstanding

Operating Cash Flow / Cash Operating Cash Flow/Cash 25591000/1.59
Dividends Dividends =16094968.55
ANALYSIS FOR LIQUIDITY RATIOS
Liquidity Ratios & Long term Debt Paying Ratios
 In the above table, we are measuring the liquidity & Long term Debt Ratio. Those
latter are measuring the ability of our company to pay-off its short-term debt
obligations & Long term Debt paying ability of the company
 By comparing the company’s liquid assets and its liabilities, the greater the liquid
assets compared to short term & Long term debt liabilities the better because it
shows that the company can pay its debts that are due. Nevertheless, when the
opposite happen, the company will have difficulties meeting its obligation and that is
a bad sign for investors
 Our corporation is in a good stand point, as the assets exceed liabilities, meaning
that the company will be able to pay off debt that are due now and the ones that are
upcoming in the future
 Testing a company’s liquidity & Long Term Debt ratio is the primary step for
investors in analyzing a company. The firm’s personnel use this information to
compare the firm to its competitors and allow them to implement changes within the
industry
PROFITABILITY RATIOS:
 In the table above, we are discussing the profitability ratios, which is the business’s
ability to generate earnings and comparing them to the expenses.
 Every firm is concerned about its profitability ratio. The profitability helps us
determine the company’s bottom line and its return to investors. It also shows the
overall efficiency and performance of the company.
 Looking at the net profit margin, we can say that 3.62 cents of every dollar is a profit
and that is pretty fair for our corporation.
 Users of this information are company managers and owners because they are the
ones looking at the firm’s ability to transform sales dollars into profit.
INVESTORS RATIOS
 In this category we are measuring the investor’s ratios which are very important to
consider when you want to invest in any company.
 Investors should look closely into this category in order to know if the company is
paying dividends, how much earning per share will they get, and how sensitive is the
company to those earnings per share.
 In our case, the Walmart Company is standing in a fair position. We can tell that from
the degree in financial leverage that for every 1% change in operating income. EPS
should change by 0.98% and that is fair for the company. As far as dividends,
Walmart is paying high dividends compared to its competitors and it continues to
raise every year.
 Investors are the main users of this information because they are concerned about
how much money they will get per share if they invest in this certain corporation.
SECTION 5: CONCLUSIONS/RECOMMENDATIONS
Walmart should build some alliances and strategic joint ventures with other
global retail companies in order to expand itself at the international front, enhance
penetration into the global market and withstand the cultural shocks not coming in
between the path to success.
From the financial analysis that the account receivables are very high, we recommend
that the company should revisit its credit policy. The company should ensure that its
credit policy is not too lenient since it might in order to not have a lot of cash stuck in
receivables. The company should be able to ensure that their accounts receivables
turnover is quicker.
We recommend Walmart should stick with its current policies and strategies for the
continued best rewards it is reaping. Walmart needs to maintain consistency in its
operations so that there are no significant changes in their statements across the years.
Appendix
Liquidity Ratios
 Current ratio = Current assets ÷ Current liabilities
= 59,940 ÷ 71,818 = 0.83
 Quick ratio = Total quick assets ÷ Current liabilities
= 14,549 ÷ 71,818 = 0.20
 Working Capital = Current Assets – Current Liabilities
= 59,940 – 71,818 = (11,878)
 Cash ratio = Total cash assets ÷ Current liabilities
= 7,781 ÷ 71,818 = 0.11
 Days Sales in Receivables = (Gross receivables* 365) ÷ Net sales
= 6768/(466114/365) = 5.3
 Accounts Receivable Turnover = Net Sales ÷ Avg Gross Receivables
= 466,114 ÷ 6768 = 68.87

 Accounts Receivables Turnover in Days = Avg Gross Receivables * 365 ÷ Net
Sales
=6768* 365 ÷ 466114 = 5
 Days Sales in Inventory = (Ending Inventory * 365) / Cost Of Goods Sold
= 43803000/(352488000/365) = 45.3578
 Inventory turnover = Net sales ÷ Inventories
= 466,114 ÷ 43,803 = 10.64
 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 10.64 = 34
 Operating cycle = Average inventory processing period + Average receivable
collection period
= 34 + 5 = 39
 Sales to Working Capital = Sales ÷ Avg Working Capital
= 466,114 ÷ {(-11,878) + (-7325)}/2 = -48.54
Long-Term Debt-Paying Ability Ratios
 Times Interest Earned = Recurring Earnings, Excluding Interest Expense, Tax
Expense, Equity Earnings and Non-controlling Earnings ÷ Interest Expense,
Including Capitalized Interest.
= 27,988 ÷ 2,251 = 12.43
 Debt Ratio = Total Liabilities ÷ Total Assets
= 126,243 ÷ 203,105 = 0.62
 Debt / Equity Ratio = Total Liabilities ÷ Shareholders Equity
= 126,243 ÷ 76,343 = 1.65

 Debt to Tangible Net Worth Ratio = Total Liabilities ÷ (Shareholders Equity –
Intangible Assets)
= 126,243 ÷ (76,343 – 0) = 1.65
 Operating Cash Flow / Total Debt = 25591 / 54136 = 0.47
Profitability
 Gross profit margin = 100 × Gross profit ÷ Net sales
= 113,626 ÷ 466,114 = 24.38
 ROE = Net Income Before Non recurring Items - Dividend on Redeemable
Preferred Stocks / Avg Total Equity
= 16,999 ÷ 76,343 = 22.27
 Return on Investment = Net Income Before Non Controlling Interest & Non
Recurring Items + {(Interest Expense) + (1- Tax Rate)} / Avg (Long term
Liabilities + Equity= 39,091 / 215,016 = 18.2%

Walmart Financial Analysis

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Walmart Financial Analysis

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Wal-Mart’s Financial Reporting Analysis 1

SECTION 1: EXECUTIVE SUMMARY

limited but, at a minimum, should provide the following information:

• Official name of the corporation

Wal-Mart Stores Inc.

• Location of the corporate headquarters

702 SW 8th Street Bentonville, AR 72716

• The state in which the company is incorporated

• Company Internet address

• Stock symbol of the corporation and the exchange on which it is traded

• Fiscal year-end of the corporation

January 31, 2011

• Date of the 10-K filing according to the financial statements provided

Last Tuesday of March

• The Company’s independent accountant/auditor

Wal-Mart's independent accountants are responsible for auditing Wal-Mart's

• The primary products(s) and/or services (s) of the corporation

as walmart.com.” (Reuters, n.d)

● Retail goods, which consists of a large variety of categories, namely electronics,

● Pharmacy: Walmart started pharmacy operations as of 2006. Since then, it has

be shipped by mail. Walmart has available a catalog of 300 generic medications

● Financial Services: Besides the aforementioned products and services, Walmart

SECTION2: BALANCE SHEET ANALYSIS

WAL-MART STORES INC (WMT) BALANCE SHEET

Fiscal year ends in January 2013-01 % 2012-01 %

Cash and cash equivalents 7781000 3.83% 6,550,000 3.39%

Total cash 7,781,000 3.83% 6,550,000 3.39%

Receivables 6,768,000 3.33% 5,937,000 3.07%

Inventories 43,803,000 21.57% 40,714,000 21.05%

Prepaid expenses 1,588,000 0.78% 1,685,000 0.87%

Other current assets 89,000 0.05%

Total current assets 59,940,000 29.51% 54,975,000 28.42%

Property, plant and equipment

Land 25,612,000 12.61% 23,499,000 12.15%

Fixtures and equipment 43,699,000 21.52% 41,916,000 21.67%

Other properties 102,413,000 50.42% 95,523,000 49.39%

Property and equipment, at cost 171,724,000 84.55% 160,938,000 83.21%

Accumulated Depreciation (55,043,000) (27.10)% (48,614,000) (25.14)%

Property, plant and equipment, net 116,681,000 57.45% 112,324,000 58.08%

Goodwill 20,497,000 10.09% 20,651,000 10.68%

Other long-term assets 5,987,000 2.95% 5,456,000 2.82%

Total non-current assets 143,165,000 70.49% 138,431,000 71.58%

Total assets 203,105,000 100.00% 193,406,000 100.00%

Liabilities and stockholders' equity

Short-term debt 12,392,000 6.10% 6,022,000 3.11%

Capital leases 327,000 0.16% 326,000 0.17%

Accounts payable 38,080,000 18.75% 36,608,000 18.93%

Taxes payable 5,062,000 2.49% 1,164,000 0.60%

Accrued liabilities 15,957,000 7.86% 18,154,000 9.39%

Other current liabilities 26,000 0.01%

Total current liabilities 71,818,000 35.36% 62,300,000 32.21%

Long-term debt 38,394,000 18.90% 44,070,000 22.79%

Capital leases 3,023,000 1.49% 3,009,000 1.56%

Deferred taxes liabilities 7,613,000 3.75% 7,862,000 4.07%

Minority interest 5,395,000 2.66% 4,446,000 2.30%

Other long-term liabilities 519,000 0.26% 404,000 0.21%

Total non-current liabilities 54,944,000 27.05% 59,791,000 30.91%

Total liabilities 126,762,000 62.41% 122,091,000 63.13%

Common stock 332,000 0.16% 342,000 0.18%

Additional paid-in capital 3,620,000 1.78% 3,692,000 1.91%

Retained earnings 72,978,000 35.93% 68,691,000 35.52%

Accumulated other comprehensive

income (587,000) (0.29)% (1,410,000) (0.73)%