The financial and strategic analysis

MBA 542: Managerial Finance
Company Report
STUDENT NAME: .
Please note:
1. Please submit (1) this report, and (2) Excel file for ratio calculation through Moodle.
2. Your answers should be typed below each question (12 Times New Roman, black fond
color). Please do not change the format of the document. Content of your answers and
references should follow APA style with single space.
3. Make sure you read each question and its specific requirement carefully to meet all
requirements.
4. Please note that whenever the questions mention “your company”, it refers to the
company you choose to analyze.
Your Report consists of three parts:
Part 1: Background
Part 2: Financial Analysis including your spreadsheet ratios
Part 3: Managerial Actions
Part 1: Background of your company (10 points each)
1.Company
1.1 Brief business description:
 What does your company do? Which industry/industries?
 What is the company’s business model?
Type your answers starting from here:
Walmart Company operates as one of largest American Multinational Retail Company
which operates a number and chain of hypermarkets, discounted department stores and various
other grocery stores. The financial and strategic analysis of the company in particular has been
done for the time period of five years whereby crucial and relevant movement in the financial
performance of the company were taken into account for the purpose of analysis. The analysis of
the Walmart Company in particular has been carried out with the help of the interpretation and
discussion of various strategic issues that has been in faced by the company in particular.
Industry Analysis for the company has been well conducted with the help of PESTEL Analysis
and Life Cycle Analysis of the company. Key economic factors that in particular would be
affecting the performance of the firm has been taken into consideration for better analysis.
Financial Analysis for the company has been done in particularly with the help of ratio analysis
whereby important ratio’s that would be giving us an overview of the financial performance and
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position of the company. The Weighted Average Cost of Capital for the Walmart Company in
particular has been done for the purpose of analysis of the company for the trend period analyzed
(Pope & Pope, 2015).
Company Background
Walmart Company operates as an American Multinational Retail Company whereby the
company operates a chain of hypermarkets, discounted department stores and various other
grocery stores that is headquartered in Bentonville, Arkansas. The company was established and
founded in the year 1962 and is owned and controlled by Sam Walton Retail Warehouses. The
company as per the latest report had stated that they are having around 11,438 stores and various
other clubs that operates in 27 different countries and primarily operates under 55 different
names that are directly linked with the Walmart Company (LeCavalier, 2016). The company
operates under its own name of Walmart in the United States and Canada. On the other hand, the
operations of the company are solely controlled and managed in Argentina, Chile, Canada and
South Africa. It is important to note that analyzed company is said to be one of the largest
company in terms of revenue earned whereby the company reported around US$514.405 Billion
of revenue in accordance with the Fortune Global 500 Report published in the year 2018. The
company also acts as one of the largest employer thereby employing around 2.2 million
employees in the total work force that the company operates. It is important to note that US acts
as the key market for the US whereby majority of the revenue for the company comes from the
economy contributing around 65% of the total revenue that has been reported by the company.
The total amount of sales that has been reported by the company from the US Operations has
been around US$510.3289 Billion (McGee, 2018).
The key sources of revenue that is earned by the company is primarily done with the help
of wide range of products that it caters and that is particularly shown below:
 Electronics: Movies and Music
 Home and Furniture: Home Improvement and Refurbishments.
 Clothing: Apparels
 Footwear
 Jewelry
 Toys
 Health and Beauty
 Pet and Supplies
 Sporting goods and fitness
 Photo Finishing
 Craft and Party Supplies
 Grocery and Retail Items
Business Model
The company operates as a key business model unit whereby the three primary units that
are in 2018 comprises of the Walmart U.S (Approximately 65% of the net sales that have been
reported by the company). Walmart as a company serves to approximately 270 million customers
who visits its total 11,700 reported stores (Muñoz, Kenny & Stecher, 2018). The strategy in
particular that has been followed by the company is primarily based on the leading in the market
with competitive pricing strategy and investing in differentiation of its products which would
provide the company a better edge and a experience of the products offered. It is accordingly
important at the same time to evaluate the distribution process that is followed by the company
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whereby approximately 78% of the purchases done by the U.S Walmart for their store
merchandize were shipped through their 157 distribution facilities that located throughout the
U.S. The remaining merchandize gets shipped directly from the various suppliers that the
company has which has been well shown below with the help of snapshot provided:
Now examining the international level, it is important to note that the Walmart Utilizes in
an all total of 188 distribution facilities that is located particularly in Argentina, Brazil, Canada,
Central America, Chile, Japan South Africa and UK. The facilities that are in particularly owned
by the company processes and distributes both the imported and domestic products to the
operating unit of the Walmart International Segment (Michelson et al., 2018). It is important to
note that by January 2018, I is expected that approximately 83% of the Walmart International
Purchases will be passed through these distribution facilities. A key snapshot of the international
facilities owned by the company is well shown below:
Business Activities
The key business activities that the company does for the purpose of reporting or earnings
total revenue for the company are primarily shown below:
 Walmart US: The operating segment is one of the largest operating segment in all of the
50 states that is operating in US, Washington DC and Puerto Rico. The company
primarily follows three store formats as well as E-Commerce.
 Walmart International: The Walmart International consists of operations in 27
countries that is outside of U.S and it comprises of three major categories:
 Retail,
 Wholesale
 And Other.
The categories in particular consist of many formats, which includes the following:
 Supermarkets
 Supercenters
 Hypermarkets
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 Warehouse Clubs
 As well as E-Commerce
 Sam’s Club: The club consist of membership-only warehouse clubs which primarily
operates in 44 states and in U.S and Puerto Rico as well as E-Commerce. Sam’s Club
accounted for in total of 12% of the net sales that has been reported by the company. The
products and services that are offered by the Merchandise are particularly Grocery and
Consumables including Diary, Fuel and other category which primarily consist of
gasoline stations, tobacco, tools and power equipment and battery centers. Other products
in the field of Home and Apparel sections including home improvement, outdoor living,
grills, gardening, furniture, apparel, jewelry, housewares are some of the key product
sections.
1.2 Life-cycle analysis: where is your company and its product in the life cycle? Explain your
answers in detail.
Type your answers starting from here:
Walmart Company operates in a highly competitive environment whereby it operates
under the Omni-channel retail stores markets where the company business are operated. The
company faces strong sales competition from other discounts, departments, drugs, dollars,
variety and other specialty stores. The company is committed in helping out there customers for
saving money and live a better life through everyday low prices offered. The first and foremost
objective of the Walmart Company has been in getting strong and effective growth stating that
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we would be focusing on the most productive and best growth opportunities that the company
can have (Industry Analysis | Walmart | Marketing, 2019). The Walmart Company can be well
related in the Mature or High Growth Stage whereby the company has diversified its products
and services that it caters and has brought a turnaround in the financial performance of the
company.
Revenue Analysis
The revenue analysis for the company in specific has been done based on the revenues
that are reported by the company which are in specific coming from different sources and on a
different geographical basis. The revenue breakdown of the company is well shown below
whereby the company reported $514.40 of revenues in the year 2019. The contribution of
revenue can be broadly divided into amount earned from US and Non U.S Operations. The
revenue reported by the company in the year 2018 was around $500,343. The increase in the
revenue has been primarily because of the increase in the US operations that the company has
undertaken for a sum of one year (Panmore Institute, 2015).
392265;
1
122140;
0
Revenue Analysis
U.S. operations
Non-U.S. operations
2. PEST Analysis (A look at the overall environment)
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10
0
0
Walmart U.S Sales
Grocery
General
merchandise
Health and
wellness
Other categories
0
00
0
0
Walmart International
Sales Mexico and
Central America
United Kingdom
Canada China
Other

 Please note that you should discuss all factors that are relevant to your company and
discuss how each factor and its movement affect the company. You should also predict
the future trend of the factors in order to identify opportunities and threats.
 Since PEST are the factors at geographic level, you should focus on the key markets (or
countries) where your company operates, esp. if your company has a significant global
operation.
2.1 Discuss all relevant political factors that may affect your company. Political factors include
geo-political conditions, intellectual property regulation, privacy policy, consumer protection
laws, and political stability.
Type your answers starting from here:
PEST Analysis
Walmart considers political factors that are particularly that are related to retail market,
which are usually pertaining or related to the government policies. It is important to note that
76% of the revenue of the company comes from the US operations and any changes observed in
this area would be of particular concern to the company (Jurevicius, 2013). The key political
factors that would be affecting the company in terms of analysis would be as follows:
 Stability in the political environment of U.S.
 Political support of globalization (Opportunity).
 Pressure of Political parties for higher wages and salaries that is offered by the company.
Walmart operates in the retail industry whereby the company business activities are expanded on
a worldwide basis. It is important for the company to control and manage the issues that are in
particular arising so that threat and opportunity can be identified well by the company. The
success of the Walmart Company depends on the political situation evolving around US and
areas where the operations of the company is concentrated.
The importance of political factors in the PESTLE analysis for the suppliers and
manufacturers of Walmart cannot be understated. Political stability is extremely essential for
Walmart in succeeding in the expansion of the business. This also applies to the areas in which
the manufacturers and suppliers of the entity are located. Political stability allows them to focus
on meeting the company’s requirements and in maintaining acceptable levels of standards.
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