Essay on Wal-Mart Financial Health 2012

1965 Words Jul 31st, 2012 8 Pages
Business Analysis Part II
The following business analysis considers the financial health, technological advantages, the effects of globalization, and a benchmarking analysis of Wal-mart in comparison with comparable organizations in their industry segments using United States companies. Competitors in the supercenter market are Target and Meijer, whereas Costco is a key competitor in the member warehouse-style market. Only Costco (Costco Annual Report, 2011) is currently competing in the international marketplace.
Financial Health
Wal-Mart Stores Incorporated (WMT), Target Corporation (TGT), and Costco Wholesale Corporation (COST) are public held companies with stock traded on the New York Stock Exchange (NYSE) and required to
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However, Target is a better buy for return on investment (ROI) based on current stock prices and dividends paid their stockholders at $.023, which exceeds Wal-Mart’s $.021 per share ROI, and $.011 for Costco as shown in figure 1 below. Return on Investment (figure 1) Cost per Share Dividends paid per share Return on Investment
Wal-Mart $ 74.05 $ 1.59 $ 0.021
Costco $ 95.70 $ 1.10 $ 0.011
Target $ 61.97 $ 1.44 $ 0.023 Source: NYSE stock quote August 3, 2012

Balance Sheet A firm’s balance sheet reports their financial condition on a specific date in terms of assets and liabilities or what it owns and what it owes (Nickels, 2010). Wal-Mart’s current asset’s value is $193,406 million and total liabilities are $62,300 million (Walmart Annual Report, 2012). Costco’s assets and liabilities are $26,761 million and $14,188 million, respectively (Costco Annual Report, 2011). Target reported $46,630 million in assets and $16,522 in liabilities (Target Annual Report, 2011). An analysis of asset to liability ratio indicates Wal-Mart is in a financially healthier position with a debt ratio of 3.11; meaning for every one dollar in debt Wal-Mart has $3.11 in assets as shown in figure two. Following Wal-Mart is Target with a 2.82 debt

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