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Analyzing Financial Aspects of Walmart

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Focus on the financial aspects of your selected company from Phase 3, Task 1. Your analysis will include the following 6 sections:

*I Choose Walmart

Financial leadership profile: Study the Web site, and look for the following information:

1. Identify the chief executive officer and the chief financial officer or other financial director. Read their profiles. (Hint: This information is generally labeled on the investor relations website as Corporate Governance, Company Leadership, Corporate Officers, Management Bios, etc.).

2. Look for the company's annual report.

3. Analyze the experience of the financial leader of your chosen company.

Current Company Performance: Visit your company Web site to locate the annual report. If your company does not have an annual report, find a company in a similar industry. You may visit the following Web site for free annual reports: http://www.annualreportservice.com/

4. Read the management discussion section of the annual report.

5. Summarize how the company is currently performing.

6. Include information about successful products or services, new products in development, customer segments, and anything else that helps explain what the company is doing.

7. Business risk: Use the annual report to explore the business risks faced by the company. Identify the top 3 risks faced by the company.

8. Financial performance: Use the annual report to find out more about the company's financial performance. Look at the Web site for financial press releases. Study 4 quarters of financial performance of the company, and explain the company's performance for the 4 financial quarters of the year. Write a financial brief about how the company performed financially.

9. Investment opportunities: Write a conclusion that states whether you would be interested in investing in your company based on its financial performance. Explain your reasons why you would or would not invest in your chosen company.

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Solution Summary

This detailed solution reviews Walmart's annual report, identifies its' CEO and CFO and their experience. It also reviews the company's website and other sources to summarize how the company is performing, and why, the amount of business risk, financial performance and business risk. APA references are included.

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Financial Leadership Profile

Walmart's chief executive officer and president is Mike Duke. From 2005 to 2009 Mr. Duke was vice chairman of the company and in charge of Walmart International. He has worked at Walmart for 17 years, leading the logistics, distribution, and administration divisions, and Walmart U.S. He has focused on corporate strategy, including a redesign of the logistics and distribution system. Before joining Walmart, Mr. Duke worked at Federated Department Stores and May Department Stores. He is also a member of the Walmart board of directors. He has a bachelor's degree in industrial engineering.

Walmart's chief financial officer is Charles M. Holley, Jr. Mr. Holley is also the company's chief risk officer. He has moved up the organization over the past 18 years, previously serving as executive vice president, finance and treasurer, and before that he was senior vice president and controller. Previously he held several executive roles in Walmart International, and is credited with pioneering the company's international expansion efforts. Before Walmart, Mr. Holley was managing director for Tandy Corporation and also spent more than 10 years with Ernst & Young. He has an MBA in finance and is a Certified Public Accountant.

Walmart believes in developing existing talent through programs within the company. Both men joined the company and moved up the ranks to his current position. This is typical of the leadership within the company.

Company Performance:

Walmart had a strong year, with a 5.9 percent increase of sales to $443.0 billion, and a 4 percent growth in consolidated operating income. The earnings per share increased from $4.18 the previous year to $4.54 per share this year. The company has cut their operating expenses for two years in a row. In addition, the company added 52.2 million square feet through 1,160 additional units, and acquired companies in the United Kingdom and South Africa (Walmart 2012 Annual Report). The company returned $11.3 billion to shareholders in the form of dividends and share repurchases.

The company is focused on growth and improving sales as well as price leadership. The Walmart 2012 Annual Report states the company closed the year with two quarters of positive sales comps and positive traffic. In addition, the company has pledged to invest $2 billion in lowering prices through expense reductions and productivity improvements ...

Solution provided by:
Sally Baldwin, Ed.D
Education
  • BA, University of Southern California
  • MSS, United States Sports Academy
  • Ed.D, Boise State University
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