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Wal Mart Financial Analysis

1079 words - 4 pages

Financial statements are heavily relied upon by business of all sizes from mom and pop restaurants to billion dollar companies. Financial statements give management a sense of understanding how much money they have, where it came from, where it should go and how much are they expecting to receive. Financial statements are not only useful to the management of a company, but also to potential investors. According the U.S. Securities and Exchange Commission, "no one financial statement tells the complete story. But combined, they provide very powerful information for investors. And information is the investor's best tool when it comes to investing wisely."Retail Manufacturing Company - Wal-MartWal-Mart is a global retailer and one of the best-managed companies in the world. Discounter Wal-Mart Stores, Inc. had sales over $400 billion, nearly 10 percent of U.S. retail sales, in year that ended in January 2009. Wal-Mart held the top spot on the 2008 edition of the Fortune 500 list of America's largest corporations, but it fell to Number 2 behind Exxon Mobil (XOM) in 2009.Quick liquidity ratio (acid test): 0.20Current Liquidity ratio: 0.88DuPont ratio (ROE): 21.13 %Net Profit Margin: 3.3 %Asset Utilization: 8.286Financial Leverage: a) debt ratio: 0.60 b) debt to equity ratio: 0.69Wal-Mart is one of the handful of companies where inventory is almost immediately convertible into cash, so the Quick Test Ratio does not apply to it. The retailer has achieved a hefty average return on equity of about 22% in the past five years. Although the company is operating on net margins of less than 5%, it has made fortunes for its shareholders. The low Financial Leverage signifies that Wal-mart has not taken on a lot of financial risk.International Manufacturing Company - SonySony Corporation was established in Japan in May 1946 as Tokyo Tsushin Kogyo Kabushiki Kaisha, a joint stock company under Japanese law. In January 1958, it changed its name to Sony Kabushiki Kaisha. In the Electronics segment, the Company is engaged in the development, design, manufacture and sale of various kinds of electronic equipment, instruments and devices for consumer and professional markets. Sony's main manufacturing facilities are located in Japan, Malaysia, China, the U.S., Singapore, Spain and Mexico and its products are marketed by sales subsidiaries and unaffiliated local distributors and sold through direct sales via the Internet throughout the world.(SNE Profile, 2009).Over the last few years Sony has been affected by the global downturn in the market resulting in adverse affects to the companies publicly traded stock as shown in the 2 year chart in Figure 1 (SNE Charts, 2009).SonyQuick liquidity ratio (acid test): 1.1%Current Liquidity ratio: 0.6%DuPont ratio (ROE): 3.8%Net Profit Margin: 34% (gross)Asset Utilization:Financial Leverage: 3.9%Service Company - StarbucksStarbucks is the #1 specialty coffee retailer in the world, from 2004 - 2008 they doubled their number of shops...

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