Financial_Project__2

Financial_Project__2 - Financial Project I I Walmart...

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Unformatted text preview: Financial Project I I Walmart Stores, Inc. Meeting time: April 1 st , 5 th and 11 th at 7pm, Snell Library [Type the company name] Financial Project I I Financial Project #2 (Wal-Mart Store, Inc.) Jiesheng (Nick) Zhou, Lingyu Yu Profitability: 1. What is your assessment of the profitability of your firm in the most recent year? How does your firms profitability compare with that of the competitor? We believe that the companys profitability is measured by comparing with major competitors within the same industry, which, for Wal-Mart Stores, Inc., would be Carrefour in this case. Return on equity Return on assets Earnings per share Profit margin Wal-Mart Stores, Inc., 2008 20.2% 9.2% $3.14 per share 3.4% Carrefour, 2008 22.3% 6.0% $1.85 per share 3.0% The above table shows a comparison of different ratios that indicate profitability of a company between Wal-Mart Stores, Inc. and Carrefour in 2008. The first ratio reflects that Wal-Mart Stores, Inc. earned 20.2 percent on the owners investment, which is close to Carrefours 22.3 percent. Furthermore, the ratio of return on assets indicates how effectively management is utilizing assets. According to the statistics, the return on assets for Wal-Mart Stores, Inc. is 9.2 percent, higher than Carrefours 6 percent. In addition, in terms of earnings per share, Wal-Mart Stores, Inc. has higher ratio than Carrefour, which indicates that Wal-Mart Stores, Inc. investors are receiving more returns on investment that Carrefours. Lastly, we found that Wal-Mart Stores, Inc. and Carrefour have a relatively close figure on profit margin, while Wal-Mart Stores, Inc.s is 0.4 percent higher than Carrefours. Overall, we can draw a conclusion that Wal-Mart Stores, Inc. and Carrefour have a relatively similar profitability based on our computations. 2. Compare the cash flows from operating activities for your firm with the net income for the most recent year. What factors have contributed to the difference between these two numbers? Page 2 Financial Project I I According to what we found on the statement of cash flow, the net income of Wal-Mart Stores, Inc. in 2008 prior to any adjustment is $12731. After subtracting the loss from discontinued operations, we have an income from continuing operations that is ready to be reconciled. We found depreciation and amortization expense and other operating activities expense have been added back to the original net income while deferred income taxes has been subtracted. In addition, there are certain items that are found under the category of changes in certain assets and liabilities, such as increase in accounts receivable or increase in inventories. After making adjustment of these specific items, we receivable or increase in inventories....
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This note was uploaded on 03/11/2010 for the course BS 112 taught by Professor Mike during the Spring '10 term at N. Essex.

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Financial_Project__2 - Financial Project I I Walmart...

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