Financial Management

Running head: FINANCIAL MANAGMENT
Financial Management
Name of Student
Name of University
Author’s Note

FINANCIAL MANAGEMENT1
Table of Contents
Part A.........................................................................................................................................2
Overview....................................................................................................................................2
Macro-economic Analysis.........................................................................................................2
Interest Rate...............................................................................................................................2
Inflation Rate..............................................................................................................................3
Business Cycle...........................................................................................................................4
Investment Performance/Stock Performance.............................................................................4
Suitability of Investment............................................................................................................5
Part B..........................................................................................................................................5
Client Profile..............................................................................................................................5
Stock Selection Suitability.........................................................................................................5
Financial Ratios..........................................................................................................................6
Liquidity Ratio...........................................................................................................................7
Profitability Ratio.......................................................................................................................7
Activity Ratio.............................................................................................................................7
Leverage Ratio...........................................................................................................................8
Financial Review........................................................................................................................9
Conclusion and Recommendations............................................................................................9
Reference..................................................................................................................................11

FINANCIAL MANAGEMENT2

FINANCIAL MANAGEMENT3
Part A
Overview
As per stated in this report the selected stock for the purpose of financial analysis and
investment purpose is Walmart Inc. Walmart Inc. is an American Multinational Retail
Corporation. It operates in the areas of chain of hypermarkets, discounted departmental stores
and grocery stores. Walmart Inc. are headquartered in Bentonville, Arkansas. As per the
investment recommendation is concerned the stock will be assessed on the basis of risk and
return. The stocks will be analyzed on various grounds which includes macro, business and
other financial factors which are directly associated with the performance and the operations
of the company. In macro-economic analysis various factors will be taken into consideration
like interest rate, inflation rate and business cycle.
Macro-economic Analysis
The factors like inflation rate, interest rate and business cycle determine the macro-
economic analysis of the stock of any company for investment purpose (Ying et al., 2019).
The variability of these factors leads to change in the financial performance of the company.
Interest Rate
The prevailing interest rate can be analyzed better with the help of the prevailing US
Fed Fund Rate that is prevailing in the economy. This affect are being stated in the below
mentioned graph, where it can be observed that interest rate in last one year has increased
considerably (Hermuningsih, Kirana & Kusumawardhani, 2018). The increase interest rate
will affect the borrowing cost of the company and also the profitability of the company. As
per the analysis it can be observed that the company is having an adequate debt to equity ratio
which can be observed to be 50%, in order to get benefit of tax-deductible interest expenses
and also the low cost financing. The changes in the interest rate pattern are provided below: