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Gad (2010) wrote that a business entity 's annual report is the foremost means of displaying the potential of the entity to prospective investors since it financial situation and general operations of the business. That being said, in what follows the author endeavours to analyse the annual report of Wal-Mart for 2015; afterwards, feedback will be provided as to the findings.
Based on Walmart (2016), the stores of Walmart and its e-commerce mechanism, provide goods and services to approximately 260 million shoppers worldwide. Doug McMillon (CEO of the Wal-Mart) indicated in report that the company 's fiscal proceeds for 2015 increased by over $9 billion to almost $486 billion, while earnings per share grew to $4.99 from $4.85, which …show more content…
This means that Walmart’s net sales grew at a slower rate than the growth of operating cost over the two-year period (Walmart, 2016, p.22). Further to the preceding, based on the Consolidated Balance Sheets - it is obvious that Walmart had a problem in terms of working capital because it could not have paid off, short-term liabilities from current assets in fiscal year 2015 if the need aroused. Since current assets reported for the period read $63.2 billion while current liabilities equal to $65.2 billion (Walmart, 2016, p.22). As per the current ratio indicator below, the company would require an additional three cents on each dollar of current assets to offsets total current liabilities. The aforementioned is far from acceptable because according to Merrill Lynch, Pierce, Fenner & Smith Incorporated (2009) In general, the current ratio of 2-to-1 is seen as satisfactory – this means that two dollars of current assets would be available to cover each dollar of current liabilities …show more content…
This is because in both years, for each dollar of merchandise sold,3.4 cents in profits was realised by Walmart (Merrill Lynch, Pierce, Fenner & Smith Incorporated, 2009, p.30)
In spite of the foregoing, Walmart’s consolidated cash flow statement ending January 31, 2015 - clearly demonstrated managed to improve from 2014 to 2015 as total cash surpassed total liability in 2015, whilst it was the reverse for 2014 (Walmart, 2016, p.39). From the above, it can be discerned that Walmart ought to endeavour to intensify its return on sales in order to meet the demand of its expansion drive and investment activities. The company may also strive to reduce operating costs if possible in order to drive down expenditure and increase
Gad (2010) wrote that a business entity 's annual report is the foremost means of displaying the potential of the entity to prospective investors since it financial situation and general operations of the business. That being said, in what follows the author endeavours to analyse the annual report of Wal-Mart for 2015; afterwards, feedback will be provided as to the findings.
Based on Walmart (2016), the stores of Walmart and its e-commerce mechanism, provide goods and services to approximately 260 million shoppers worldwide. Doug McMillon (CEO of the Wal-Mart) indicated in report that the company 's fiscal proceeds for 2015 increased by over $9 billion to almost $486 billion, while earnings per share grew to $4.99 from $4.85, which …show more content…
This means that Walmart’s net sales grew at a slower rate than the growth of operating cost over the two-year period (Walmart, 2016, p.22). Further to the preceding, based on the Consolidated Balance Sheets - it is obvious that Walmart had a problem in terms of working capital because it could not have paid off, short-term liabilities from current assets in fiscal year 2015 if the need aroused. Since current assets reported for the period read $63.2 billion while current liabilities equal to $65.2 billion (Walmart, 2016, p.22). As per the current ratio indicator below, the company would require an additional three cents on each dollar of current assets to offsets total current liabilities. The aforementioned is far from acceptable because according to Merrill Lynch, Pierce, Fenner & Smith Incorporated (2009) In general, the current ratio of 2-to-1 is seen as satisfactory – this means that two dollars of current assets would be available to cover each dollar of current liabilities …show more content…
This is because in both years, for each dollar of merchandise sold,3.4 cents in profits was realised by Walmart (Merrill Lynch, Pierce, Fenner & Smith Incorporated, 2009, p.30)
In spite of the foregoing, Walmart’s consolidated cash flow statement ending January 31, 2015 - clearly demonstrated managed to improve from 2014 to 2015 as total cash surpassed total liability in 2015, whilst it was the reverse for 2014 (Walmart, 2016, p.39). From the above, it can be discerned that Walmart ought to endeavour to intensify its return on sales in order to meet the demand of its expansion drive and investment activities. The company may also strive to reduce operating costs if possible in order to drive down expenditure and increase