Annual Report
Yuanyuan Xu
Introduction
• Chief executive officer: Chief executive officer
• Location of home office: 702 SW 8th St,
Bentonville, AR 72716
• Ending date of latest fiscal year: 1/31/2012
• Principal products or services: Supplying
thousands of products to a consuming market,
Wal-Mart Stores Inc. has focused on providing
lower cost items at advertised bottom-end
prices.
• Main geographic area of activity: the United
States
Audit Report
• Wal-Mart Stores Inc.’s independent auditors:
Ernst and Young LLP
• Audit say that financial statements of WalMart Stores Inc. present fairly and are
conformity with accounting principles.
Stock Market Information
• Most recent price of the company’s stock: $74.84
• Twelve month trading range of Walmart’s
stock:$65.99 to $79.86
• Dividend per share: $1.88/share
• Date of the above information: June 2, 2013 9:28
p.m
• I think it is wise to buy walmart stock as an
investment because it has strong financial
position and the share price has rising tendency
over the year.
Income Statement
Income statement
• The format of the income statement is most
like a multistep format.
• The gross profit is steadily increasing from
2011 to 2013. Most revenue of this company
comes from operation.
Balance sheet
Statement of Balance sheet
• According to Walmart Balance sheet of 2012
and 2011, the company’s total assets, total
liabilities and shareholder’s equity increases.
• Total assets and total liabilities all increases
from 2011 to 2012, which indicates that the
company is growing.
Statement of Cash Flows
Statement of Cash Flows
• cash flows from operations are more than net
income for the past two years.
• Wal-Mart Stores Inc. is growing through
operating activities.
• Wal-Mart Stores Inc’s primary source of
financing is net change in short-term
borrowings.
• Cash increased or decreased over the past two
years.
Accounting Policies
• Walmart recognizes sales revenue net of sales
taxes and estimated sales returns at the time it
sells merchandise to the customer.
• The topics of the notes to the financial
statements:
• 1.Summary of Significant Accounting Policies
• 2. Notes about depreciating assets
• 3.Notes about valuing inventory
• 4.Notes to Contingencies
Financial Analysis Liquidity Ratios
(USD $ in millions)
2011
2012
Working capital
(7,325)
(11,878)
Current ratio
0.88
0.83
Receivable turnover
74.76
68.87
Average days’ sales
uncollected
323/365=0.88
115/365=0.32
Inventory turnover
10.90
10.64
Average days’ inventory on 40,714/365=111.5
hand
43,803/365=120.0
Operating cycle
40
38
Wal-Mart Stores Inc.'s receivables turnover, inventory turnover
deteriorated and its ability to pay back its short-term liabilities with its
current asset was reduced from 2011 to 2012 .
Financial Analysis Profitability Ratios
(USD $ in millions)
2011
2012
Profit margin
100 × 15,699 ÷ 418,952 =
3.75%
100 × 16,999 ÷ 466,114 =
3.65%
Asset turnover
443,854÷ 193,406 = 2.29
466,114 ÷ 203,105 = 2.29
Return on assets
100 × 15,699÷ 193,406 =
8.37%
100 × 16,999 ÷ 203,105 =
8.37%
Return on equity
100 × 15,699 ÷ 71,315 =
22.01%
100 × 16,999 ÷ 76,343 =
22.27%
Wal-Mart Stores Inc.'s asset turnover and return on assets keep stable from
2011 to 2012. As an retail company, Wal-Mart Stroes Inc. has pretty low
profit margin which indicates that its low-cost stretagy.
Financial Analysis Market Strength
Ratios
(USD $ in millions)
2011
2012
Price/earnings per share
61.09/4.61=13.25
74.77/5.16=14.48
Dividend yield
1.46/61.01=0.024
1.59/69.95=0.023
Wal-Mart Stores Inc. grow from 2011 to 2012 and Its material benefits to stockholders
had been flat for those years. The P/E ratio of Walmart increased from 2011 to 2012,
which indicates that its earnings were substantially increasing those years to keep the
high stock price.
Financial Analysis Solvency
Ratio
(USD $ in millions)
2011
2012
Debt to equity
0.75
0.71
Financing gap
365/(443,854 ÷ 36,608) 38=-7.9
365/(466,114 ÷ 38,080)40=-10.2
Wal-Mart Stores Inc.'s financing gap keeps negative from 2011 to 2012, which
means it has adequate Fund. It indicates that Wal-Mart Inc. has enough cash
to purchase capital expenditures without borrowing. Wal-Mart Stores Inc.
also maintained low debt-to-equity ratio, which refers that conservative
financing. From that perspective, Wal-Mart Stores Inc. had sustained and
steady earnings those years.
Industry Situation & Company Plans
• Running retail business, Wal-Mart Stores Inc. can attract
customers to gain stable earnings by keeping low-cost
principle. Wal-Mart Stores Inc. will keep enlarging the size
of its market by establishing more stores to cover more
areas.
• Wal-Mart Stores Inc. will continues its global expansion
activities by growing our retail square feet and expanding
our e-commerce capabilities. It means that Wal-Mart
Stores Inc. will increase its investment in technology and
global e-commerce initiatives to develop a global
technology platform. Continuing complete its online system
and globule technology, Wal-Mart Stores Inc. can
strengthens its competitiveness.
•
•
“Next Generation Walmart & the Future of Shopping” brickmeetsclick.com. Bishopsgate, LLC. May 14, 2013
<http://www.brickmeetsclick.com/next-generation-walmart---the-future-of-shopping>
“Walmart 2013 Annual Report”
<http://az204679.vo.msecnd.net/media/documents/2013-annual-report_130108806067963477.pdf>
Executive Summary
• As one of the world’s largest retailer obtaining a permanent
place in the retail market is the goal of Wal-Mart Inc. WalMart Stores Inc. has it’s reputation for providing customer
best services with its lowest prices for a long time.
• By combining experience and technology, Wal-Mart Stores
Inc. will be able to create a high satisfaction level to globe
customers. For the next few years, Wal-Mart Stores Inc. tend
to put its focus on expanding overseas market and cutting its
cost by technological innovation.
• Planning to invest more capital into the development of its
new technology, Wal-Mart Stores Inc. will increase its profits
from its gaining of greater share in overseas retail business.
• Overview, Wal-Mart Stores Inc. sent a signal of bright
earnings outlook to the shareholders through their future
plans.