Walmart Financial Analysis

The Financial Analysis for Walmart

Abstract:

Based on recent years financial statements, we gave simplified analysis and evaluation about Walmart’s financial position. Also, to make our conclusion more sensible and meaningful, we choose Target, whose revenue occupied the third place in the United States in 2012, for comparison. The original data is gathered from “finance.yahoo.com”.

1. Methods used in this paper:

In general, there’re three common methods to analyze, they’re: comparative analysis, trend analysis and ratio analysis. When we are comparing same data with different accounting periods or comparing same index with different company, we are using comparative method. This is easy to know the difference in numbers, but it’s hard to tell whether good or not and make explanation. Trend analysis needs a base period, and then compares other periods in percentage with base one. This method tells us what happened during last periods and make more sense to reflect firm’s operating position. But we also need to compare those numbers to explain the connotation. Lastly, ratio analysis visually tells us a high or low proportion. However, it also has limitation that the ratio is static and cannot be used to predict future. Therefore, we must combine these three methods together to give an overall effective analysis.

2. Calculations of Walmart’s financial statements:

Because the information is all given, we don’t show the data here. We just calculate the ratios and numbers we want. The results are summarized as followed:

a. Basic information: (with data of 2011 and 2012 annual data)

Growth of scale: (from balance sheet)

| 2011-2012 | 2012-2013 |

Growth of total assets | 6.98% | 5.01%↓ |

Growth of total liabilities | 8.81% | 3.74%↓ |

Growth of owner’s equity | 4.05% | 7.05%↑ |

Growth of profit: (All in thousands, from income statement)

| 2012-2013 | Percentage change |

Growth of net revenue | 22,212 | 5.00% |

Growth of COGS | 17,361...