I company. He firmly stood by his belief
I have fully researched Walmart stores to evaluate the
strength of the company, its shareholders, employees and future investors in
the company. I feel confident that after reading this summary, you will be able
to make a well-informed decision on future investments with the company.
Walmart was founded 1962 by Sam Walton. Sam or Mr. Sam, as
most people referred to him, felt strongly that Walmart should appreciate and
recognize employees and customers as part of the team. Mr. Sam made employees
partners in the company. He firmly stood
by his belief that a partnership with employees was what would make Walmart
great. Being a part of the team would encourage employees to give their open
and honest opinion of company decisions. Over the years the company has
expanded, flourished and remains an innovative driving force to all competitors
of retail, ecommerce, grocery stores and bricks and online stores.
“Each week, over 260 million customers and members visit our
11,695 stores under 59 banners in 28 countries and e-commerce websites in 11
countries. With fiscal year 2017 revenue of $485.9 billion, Walmart employs
approximately 2.3 million associates worldwide. Walmart continues to be a
leader in sustainability, corporate philanthropy and employment opportunity.”
Walmart’s company assets are 199,581, the company currently has liabilities of 115,970 and owners’ equity amounts 80,546 at the end of fiscal year. If Walmart
were liquidated at the end of the fiscal year, the shareholders are guaranteed
to receive the total shown for owners’ equity because Walmart is stable enough and
has an ample supply of assets to cover company assets, liabilities as well as
the shareholder’s equity amounts for the fiscal year.
Walmart’s noncurrent liabilities for the fiscal year are 51,351 million. The company’s current
ratio for the fiscal year is 86%. Walmart’s net cash provided by operating
activities declined from 2015 to 2016 but then increased from 2016 to 2017
exceeding the 2015 level. For the fiscal year, 12 billion was Walmart’s cash
flow from operations. This not the same amount as the company’s operating
income. The company’s operating income are earning before taxes and interest.
It is calculated by subtracting amortization, gross income and operating expenses.
Walmart recognizes revenue from service transactions
at the time the service is performed. Generally, revenue from services is classified as a component of net
sales in Walmart’s Consolidated
Statements of Income.
Calculated general, administrative, and selling expenses as
a percentage of sales for the past three fiscal years.
This is calculated as Percentage Change = (Current Year % ?
Prior Year %) / Prior Year %.
Year End Net
Sales Revenue Percentage
2015 485.65B 9.31B 52.16%
2016 482.13B -3.52B 136.97% decrease
2017 485.14B 3.01B 161.18%
Walmart’s total asset turnover for the fiscal year:
Net sales/Total company assets=turnover ratio This ratio
will give investors and stock holders an idea of how stable a company is. A low
number indicates that the company is not stable, may have some investment issues.
The company may not be selling off its inventory in a timely manner. Unsold
inventory can result in delayed or lost sales.
Net sales (millions)/Total company assets (millions)=turnover
Beginning Assets 199,581
Year End Assets 198,825
Net Sales 458,873
Turnover Ratio 2.30
Walmart’s prepaid expenses and other current assets account
at the end of fiscal year.
Prepaid expenses 1,941
Current Assets 198,825
Information retrieved from The New York Stock Exchange
website. The company report 66,928 million of deferred rent and other
liabilities at the end of fiscal year. This information was retrieved from the
Morning Star Financials.
Prepaid rent and deferred rent are different in the aspect
that prepaid rent is paid well in advance. It is accounted for prior to when
the costs are incurred by the business. Deferred rent is paid in installments over
a long period of time. Accrued liabilities are unpaid expenses such as rent,
wages and taxes listed under accounts payable a company’s obligation to pay for
goods and services that have been rendered, but payment is not yet due for the
services. Interest earned from investments or cash that was not initially part
of the original investment would generate the interest income that is reported
on the income statement.
Walmart stores company earnings per share for the three
Walmart stores company net profit margin computed for the
three years reported.
Walmart stores net profit margin has gone down from 2016 to
2016 but the company has managed to maintain the same amount of profit from
2016 and 2017. Even though the company suffered a 0.4% decrease, the company
has invested more money into its workers, training, ecommerce and buildings. Those
investments would account for much of the net profit the company has spent for
the last year. Walmart is on trend to increase the percentage of profit after a
profit from ecommerce and buildings that have been opened for the last year.
Walmart stores reported cash and cash equivalents of 11.6 billion
at the end of the fiscal year. The change in accounts receivable Walmart’s accounts
receivables for the fiscal year that
ended in October 2017 was 5.84, in 2016 the company ended with 5.62 in
accounts receivable. The change in accounts receivable will lower the
company’s net income and equity of the shareholders.
Walmart stores company gross profit percentage computed for
the most recent two years.
January 2016 25.19% January 2017 25.35%
The company’s gross profit percentage for the most recent
two years has risen slightly. The change shows that the company has increased
its overall sales and decreased the cost of goods sold slightly. Based on the
research and information provided to you, I would recommend Walmart stores as a
viable, solid and profitable investment for Walton stores. The company has
shown increased and steady growth with plans to row tremendously over the next