Sears-Walmart Case

Financial Management

Assignment 4 On

CASE REVIEW AND ANALYSIS OF:

HARVARD BUSINESS SCHOOL CASE STUDY : 9-101-011

Sears, Roebuck and Co. vs Wal-Mart Stores, Inc.

by, Gregory S Miller Christopher Noe

Date of Submission : 7th January 2011, 24:00 hours

Submitted by, Samir Saini PRN: 10020243009 MBA – E&E (2010-12)

We begin this case analysis by showing the balance sheets of both the companies , namely Sears & Wal-Mart as Wal shown in Figure-1 below. Figure-2 shows the Proforma Income Statement of both the companies and Figure 2 Figure-3 shows the ratio calculations for both the companies. The data shown and calculations carried out are basically for the operations and activities of the year 1996 & 1997 1997.

Balance Sheets:

FIGURE -1

FIGURE – 2

RATIO ANALYSIS:

FIGURE – 3

A) Case summary & description : The case starts by introducing Mr.Don Edwards who has just earned his MBA and is now a fresh financial analyst for a prestigious investment bank. Looking at the premise this case has been written in, it is well understood that besides the fact that the financial analysis has to be done, the more important focus highlighted right in the beginning is the ROE (Return on Equity) that is compared between Wal-Mart and Sears. From here on in the analysis, we put ourselves in the shoes of Mr.Don Edwards and continue the analysis, with the view that our analysis could be the basis for a buy/sell recommendation from his investment bank to his peers or to other clientele. Our analysis of this case focuses primarily on the following points : a) Measuring, analysing and contrasting both the firm’s financial performance. b) Looking at how the companies have grown in size, what are the sources of their funds and what is they gameplan for their future growth One of the major points according to thorough reading of the case is to determine moreover not just what has happened in the past ( as shown by the data in the case) but to determine with...