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Expanded Analysis on Financial Statements for Wal-Mart

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1. Do an expanded analysis of the financial statements (horizonal and vertical analysis, selected liquidity, profitability, and solvency ratios) of Wal-Mart.

2. Write an executive summary for Wal-Mart that defines its financial health, as well as calculation and appendices completed in Excel for an opinion of Wal-Mart's forecasted financial health.

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Solution Summary

The expert examines the expanded analysis on financial statements for Wal-Mart.

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1- Wal-Mart is the biggest retail chain in world having turnover of more than $400 billion. During the fiscal year ended January 31, 2010 (fiscal 2010), The Walmart U.S. segment accounted for 63.8% of its net sales, and operated retail stores in different formats in the United States, as well as Walmart's online retail operations, walmart.com. The International segment consists of retail operations in 14 countries and Puerto Rico. During fiscal 2010, the segment generated 24.7% of the Company's net sales.
Reference: http://www.reuters.com/finance/stocks/companyProfile?symbol=WMT.N
Purpose:
Saving people money to help them live better was the goal that Sam Walton envisioned when he opened the doors to the first Walmart more than 40 years ago. Today, this mission is more important than ever to our customers and members around the world. We work hard every day in all our markets to deliver on this promise. We operate with the same level of integrity and respect that Mr. Sam put in place. It is because of these values and culture that Walmart continues to make a difference in the lives of our customers, members and associates
Reference: http://walmartstores.com/AboutUs/

2- Financial Analysis
Financial Ratios is the relationship between two or more financial variables such as sales and profits. Financial ratios help in knowing about the performance of the organization.
Important ratios
Current ratio measures the liquidity position of the organization. It indicates the ability to pay the short-term obligations of the organization. It is computed by Current Assets/Current Liabilities.
As per the below mentioned table, Wal-Mart's liquidity has improved but still its less than the ideal current ratio of 2:1

Strengths
Solvency ratios measure the long-term solvency of the ...

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