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Wal-Mart ratio analysis

Resource: Financial Statements for the company assigned by your instructor in Week 2.

Review the assigned company's financial statements from the past three years.

Calculate the financial ratios for the assigned company's financial statements, and then interpret those results against company historical data as well as industry benchmarks:

- Compare the financial ratios with each of the preceding three (3) years (e.g. 2014 with 2013; 2013 with 2012; and 2012 with 2011).
- Compare the calculated financial ratios against the industry benchmarks for the industry of your assigned company.

Write a 500 to 750 word summary of your analysis.

Show financial calculations where appropriate.

Walmart Stores ratio analysis, I am looking for at least 12 comparative ratios (for current and prior year) spread across the four major categories of ratios.

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1. Current Ratio = Current assets/current liabilities
Data in $ millions
2014 2013 2012 2011
Current assets 61,185 59,940 54,975 51,893
Current liabilities 69,345 71,818 62,300 58,484
Current ratio 0.88 0.83 0.88 0.89
Industry - 1.14 1.22 1.24

Current ratio deteriorated slightly from 0.89 in 2011 to 0.88 in 2012. In 2013, it further deteriorated to 0.83. However there was an improvement in 2014.
2. Quick Ratio = Total quick assets รท Current liabilities
2014 2013 2012 2011
Cash & cash equivalents 7,281 7,781 6,550 7,395
Net receivables 6,677 6,768 5,937 5,089
Total quick assets 13,958 14,549 12,487 12,484
Current liabilities 69,345 71,818 62,300 58,484
Quick Ratio 0.20 0.20 0.20 0.21
Industry 0.60 0.65 0.62

The quick ratio deteriorated slightly from 2011 to 2012. It was then constant from 2013 to 2014. As compared to the industry, quick ratio is much less than it should be.
3. Cash Ratio = Total cash assets/Current liabilities
2014 2013 2012 2011
Cash & cash equivalents 7,281 7,781 6,550 7,395
Current liabilities 69,345 71,818 62,300 58,484
Cash ratio 0.10 0.11 0.11 0.13
Industry 0.29 0.33 0.31

Wal-Mart's cash ratio deteriorated from 2011 to 2012. From 2012 to 2013 it remained constant but decreased in 2014. As compared to the industry average, the cash ratio falls far behind the benchmark.
Wal-Mart's current ratio has been stable but its low due to which there is a concern over company's ...

Solution Summary

Ratio analysis of Wal-Mart

$2.19