Ratio Analysis

Wal-Mart Stores Inc.

Company profile

Wal-Mart Stores Inc. is a global American Retail Group , the major part of the U.S. market dominated one. Fortune Global 500 Wal-Mart is in the list of Fortune Global 500 number one of the largest companies listed on the world. Wal-Mart employs over two million employees, making it the largest private employer in the world. (www.walmart.com)

The turnover of Wal-Mart in fiscal year 2009, climbed from the previous year by 1% to 405.6 billion U.S. dollars. The profit rose by about 7% to 14.3 billion U.S. dollars.

Wal-Mart Stores operates retail stores in a range of formats. Co.'s operations comprise three business segments: Walmart U.S., which operates retail stores in different formats in the U.S. under the Walmart or Wal-Mart brand, as well as Walmart's online retail operations, walmart.com; International, which consists of retail operations in 14 countries and Puerto Rico, and comprises of retail stores and restaurants including discount stores, supercenters and Sam's Clubs; and Sam's Club, which consists of membership warehouse clubs in the U.S. and the segment's online retail operations, samsclub.com. As of Jan 31 2010, Co. had a total of 4,304 domestic stores and 4,112 international stores. (www.walmart.com)

Wal-Mart follows a policy of competing on price, with low margin and high turnover. It is able to keep its prices low by various means such as selection of product range, location of stores in areas with low property prices, efficient logistics management, effective buying, and keeping the operational costs down. Also it focuses on selling more popular products. This enables Walmart to make more efficient utilization of shelf space in its stores.

Customer service orientation of Wal-Mart is to make improve its in-store management to make it easier and faster for the customer to shop. It does not follow the policy of providing add-on service that increases the cost of their product disproportionately.

Operation and locations

Wal-Mart Stores Inc. is principally engaged in the operation of mass merchandising stores located worldwide. As reported on January 31, 2001, the Company operated the following numbers and types of stores: 1,736 discount stores, 888 Supercenters, 475 SAM'S Clubs and19 Neighborhood Markets. The Company operates internationally in the following countries:

Argentina (11) Brazil (20) Canada (174) Germany (94) Korea (6) Mexico (499) Puerto Rico (15) China (11) United Kingdom (241)

Segments

The Company operates through three segments, the Wal-Mart Stores segment, the SAM'S Club segment and the International segment. Walmart operates discount department stores, warehouse membership clubs and a combination full-line supermarket and discount department store. Revenues reflect comparative store sales increases and higher sales at Wal-Mart, SAM'S CLUB and McLane. It should be noted that net income was partially offset by lower gross margins, reorganization costs and higher operating and SGA expenses.

Ratio Analysis

Profitability Ratios

2010

2009

2008

2007

2006

ROA % (Net)

8.58

8.17

8.09

7.8

8.69

ROE % (Net)

21.08

20.58

20.18

19.67

21.9

ROI % (Operating)

21.82

20.98

20.96

21.29

21.44

EBITDA Margin %

7.63

7.27

7.47

7.46

7.36

Calculated Tax Rate %

32.35

34.19

34.2

33.56

33.43

Revenue per Employee

194,388

192,618

180,380

183,500

175,363

 

 

 

 

 

 

Liquidity Ratios

2010

2009

2008

2007

2006

Quick Ratio

0.22

0.2

0.16

0.2

0.19

Current Ratio

0.87

0.88

0.81

0.9

0.9

Net Current Assets % TA

(4.24)

(3.94)

(6.65)

(3.42)

(3.62)

 

 

 

 

 

 

Debt Management

2010

2009

2008

2007

2006

LT Debt to Equity

0.51

0.53

0.52

0.5

0.57

Total Debt to Equity

0.58

0.65

0.69

0.63

0.73

Interest Coverage

12.71

12

12.23

13.41

15.81

 

 

 

 

 

 

Asset Management

2010

2009

2008

2007

2006

Total Asset Turnover

2.44

2.47

2.41

2.41

2.44

Receivables Turnover

101.43

107.02

116.66

126.74

144.23

Inventory Turnover

9

8.79

8.32

8.02

7.8

Accounts Payable Turnover

13.77

13.66

12.96

13.04

13.42

Accrued Expenses Turnover

20.99

22.72

23.53

23.1

22.35

Property Plant & Equip ...