Explore BrainMass

Walmart's Financial Health

I choose Walmart.

Provide a financial summary of your selected company's financial health.

Define 2 financial concepts and how they played a major part in the company's financial press.

Based on your research of your company's financial health, describe the company's financial health.

Solution Preview

Here you go - hope this helps. Good luck!

According to Michael Duke, President and Chief Executive Officer of Walmart, the company is performing well financially. Net sales increased to $443.9 billion, growing by 5.0 percent, and operating income grew 4 percent to $26.6 billion. Shareholders enjoyed increased earnings at $4.54 per share, up from $4.18 last year. The chain "added 52.2 million square feet through 1,160 additional units" (Walmart, 2012). Furthermore, operating expenses are growing at a slower rate than sales.

Return on investment (ROI), a performance measure, is defined as adjusted operating income (operating income plus interest income, depreciation and amortization, and rent expense) for the fiscal year divided by average invested capital during that period. Basically, it measures how effectively a company is employing its assets. Return on investment must be looked at over several years since it can fluctuate over time as management balances long-term strategic actions with short-term impacts. For Walmart, ROI was fairly stable for the last two fiscal years at 19.2 percent (2011) and 19.3 percent (2010) (Walmart 2011 Financial ...

Solution Summary

This detailed solution provides a financial summary for Walmart's financial health.It also defines two financial concepts and explains how they played a major part in the company's financial press. It describes Walmart's financial health.