Submitted by: Submitted by chico1201
Views: 424
Words: 2566
Pages: 11
Category: Business and Industry
Date Submitted: 12/02/2011 09:02 AM
Assessment of WalMart as an Investment
Table of Contents
1. Introduction 1
2. Company Overview 2
3. Financial Analysis 3
3.1 Profitability 3
Table 1 Gross profit margin 3
Table 2 Operating profit margin 4
Table 3 Net profit margin 5
Table 4 Earning per share 6
3.2 Efficiency 6
Table 5 Return on assets 7
Table 6 Return on equity 8
3.3 Liquidity 8
Table 7 Current ratio 8
3.4 Capital Structure 9
Table 8 Debt/equity ratio 9
4. Share Price 10
Figure 1 Share price movement 10
References 11
1. Introduction
WalMart is the world’s largest retailer and has proven itself to be able to cope with a recession. The ongoing performance of the company and the potential recovery of the retail industry as the world moves slowly out of recession may make WalMart a form which may be worth considering as a stock investment. To assess WalMart as a potential investment the background of the firm, the financial performance and the performance of the share price can all be considered.
2. Company Overview
WalMart is an international retail firm with supermarkets in many countries. Founded in 1962 by Sam Walton, the firm has grown to a position where they are competing in 28 different countries with 9,667 business units, as well as the online sales (Wal-Mart, 2011). The company’s major banners are the WalMart supermarket and Sam’s Club, which is the discount club. In many international markets, where the firm has grown through acquisition, there has been the retention of the local names, with the company operating under 60 different banners internationally. The main market is the US WalMart operation, which accounted for 62.1% of the net sales, international stores accounted for 26.1% of revenue and Sam’s club accounted for 11.8% of revenue (WalMart, 2011).
In terms of products sold the company sells more than simply groceries, however, groceries remain the most important segment, accoutring for 54% of the US WalMart sales, and 55% of Sam’s Club sales ....