These two charts all are the important ratios come from war-Mart. Walmart Financial Ratio Liquidity Ratios 2011 2010 Working Capital -6,591 -7,511 Current Ration 88.73% 86.48% Receivable Turnover 88.2 88.2 Avg. days $5.22 $4.39 sales uncollected Inventory Turnover 8.8 8.6 Avg. days 45 42 inventory on hand All liquidity ratios have increased slightly from year to year, except we see a decrease in working capital, and a constant receivable turnover. With the inventory driver, Wal-Mart maintains an efficient supply chain by keeping low levels of inventory Wal-Mart is a leader in its use of the information driver to improve responsiveness and decrease inventory investment. Build nearby new stores increasing efficiency of its transportation assets. Profitability Ratios 2011 2010 Profit Margin 3.90% 3.50% Asset Turnover 2.3 2.4 Return of Assets 10.20% 8.90% Return on Equity 23% 19.80% Walmart has increased their return on assets and equity since the last fiscal year. The profit margin increases by a mere .4, but the asset turnover decreased by .1. The company has increased their profits according to this information. This refer low price strategy as cost driver Wal-Mart practices "everyday low pricing"for its products. This ensures that customer demand stays steady and does not fluctuate with price variations. Wal-Mart feeds them large orders, allowing them to be efficient by exploiting economies of scale. Solvency Ratio 2011 2010 Debt to Equity Ratio 65.80% 52.50% By dividing the company’s total debt by the amount of shareholders equity the math shows that since 2010 there is a larger percentage of the company indebted. Market Strength Ratios 2011 2010 Price per share $4.07 $1.23 Dividend yield 2.76% 2.35% Walmart increased its profits from 2010 to 2010 and therefore their prices per share had an increase. The company is also paying out more dividends in relation to their share prices. Current ratio 2010: Wal-Mart - $51,893,000 / $58,484,000 = .89 Target - $17,213,000 / $10,070,000 = 1.71 Quick ratio 2010: Wal-Mart – ($51,893,000 - $36,318,000) / $58,484,000 = .27 Target – ($17,213,000 - $7,596,000) / $10,070,000 = .96 Activity ratios 2010: Wal-Mart - $421,849,000 / $34,739,000 = 12.14 Target - $68,466,000 / $7,596,000 = 9.01 Receivables turnover 2010: Wal-Mart - $421,849,000 / $5,089,000 = 82.89 Target - $68,466,000 / $6,153,000 = 11.13 Wal-Mart has a much better turnover rate on its accounts receivables than Target does. Fixed asset turnover 2010: Wal-Mart = $421,849,000 / Show More
