Please write an essay in Word that addresses the following questions about Walmart:
Would you estimate that Walmart has an effective cash management strategy? Why or why not? Please justify your decision.
In general, what are the four main factors in Walmart's credit policy? Please name and describe each of these factors.
How would a tight short-term financial management policy compare to an easy short-term financial management policy?
What are some techniques that companies can use to monitor accounts receivable?
What's the maturity matching approach to financing assets?
What are the risks of financing long-term assets with short-term liabilities?
What are the risks of financing short-term assets with long-term liabilities?
Wal-Mart Stores, Inc.: Cash Management
Note that this essay serves as a guide for the student in writing the final paper as required for class.
I discuss here the cash and financial management policies and strategies of Wal-Mart Stores, Inc.'s (NYSE: WMT). A discussion of the company's cash, accounts receivable, short- and long-term liabilities, and credit policies is also included
Cash management strategy
Based on the above table (Please refer to the list of References for the link to the sources of the cash and cash equivalents, and total assets figures for 2011 to 2014, and to the attached Excel file for the computation of the percentages.), we observe that the increase in total cash from one year to another has been steadily declining. This results to a smaller percentage of cash and cash equivalents to total assets.
Wal-Mart Stores, Inc. has one of the largest cash reserves of all the Fortune 500 companies. In spite of the decline in cash and cash equivalents, the still relatively high cash balance of the company is bad news for its stockholders. What this means for stockholders is that, the company cannot find any profitable opportunity where it can invest its money into and yet chooses not to distribute the excess cash to stockholders.
The four main factors affecting a ...
Walmart cash management techniques are analyzed. The risks of financing long-term assets with short-term liabilities are determined.