Decision Making

Decision Making

Three Publicly Traded Companies

Three publically traded that has been selected are as followed:

Wal-Mart Stores: It is an American multinational retail company famous as largest grocery retailer.

Target Stores: It is second largest in discount department store of America offer different products to the people.

Verizon Wireless Company: Verizon is from Wireless telecommunications industry that offers mobile network operator in America.



Annual report of companies

Annual report of the companies has been obtained from company's website. Data for analysis has been taken form most recent annual report i.e. 2012. Annual report was easily available on their website.

Cash Available for debt

Wal-Mart Stores: Cash during 2012 was $6,550 while it 2011 it was higher i.e. $7,395 which means that cash has been reducing. Wal-Mart might face difficultly in covering their current debts portion since cash has been reducing and at the same time current debt has been increasing with 6.31% [(62300-58603)/58603]. From cash perspective company is not in good position as declining trend is unattractive to investors and shareholders. If all Current Assets will be converted into cash before all of the Current Liabilities become due, then company would have $54,975 cash on hand in 2012 while it was less in 2011 $52,012. B This shows a good position of company as cash position would be increasing and company would be having more cash to overcome their Current Liabilities (Walmart Annual Report, 2012).

Target Stores: Cash balance at end of 2012 was $794 and current liabilities $14,287. In 2011, cash balance as $1,712 and current liabilities $ 10,070. A reduction in cash position as well as in current debt state that company has been using money/cash to pay off their debt. Looking at this, reduction in cash is not good for company. There are possibilities that company might face problems in future. If all Current Assets will be converted into cash before all of the Current Liabilities become due, then Target Stores cash position will still not be attractive as it was $17,213 in 2011 while it decline to $16,449 in 2012. The reason for this decline is Cash and cash equivalents. Hence, Target is less liquid and has less capacity to overcome their current liabilities (Target Corporation Annual report 2012).

Verizon Wireless Company: in 2012, Cash and cash equivalents was $3,093 while it was $ 13,362 in 2011. A huge reduction in cash state that Verizon would be facing problem in paying ...