Ratio Analysis for Walmart: Liquidity, Profitability, Asset and Debt Management

Running Head: FUNDAMENTALS OF FINANCIAL MANAGEMENT
Ratio analysis

Fundamentals of Financial Management 1
Contents
Introduction...........................................................................................................................................1
Computation of Ratio Analysis..............................................................................................................2
Interpretation of Ratios..........................................................................................................................3
Liquidity Ratios.................................................................................................................................3
Profitability Ratios.............................................................................................................................3
Asset management ratio.....................................................................................................................4
Debt Management Ratio....................................................................................................................4
Conclusion.............................................................................................................................................4
References.............................................................................................................................................4

Fundamentals of Financial Management 2
Introduction
Financial analysis of a company mainly deals with the evaluation of its financial position.
Final accounts of a company are critically evaluated and analysis is performed regarding
company’s profitability, efficiency, liquidity and overall financial structure (Vogel, 2014).
This report contains a ratio analysis of the financial statements of Walmart. It is a
multinational retail corporation operating in U.S that provides a chain of hypermarkets,
departmental and grocery stores.
To measure the on whole financial position of Walmart, various ratios are calculated like
liquidity, profitability, and asset and debt management. The report includes a detailed
calculation of all ratios and related comments.
Computation of Ratio Analysis
Walmart Financial Statements for year 2016-17
Particulars 2016 2017
AUD$ AUD$
Total Revenue 482,130 485,873
COGS 360,984 361,256
Operating Profit/(Loss) 24105.0 22764.0
EBIT 24186.0 22864.0
interest expense 2,548 2,367
Net profit 14,694 13,643
Current Assets 60,239 57,689
Quick Assets 14,329 12,702
Prepaid Expenses 1,441 1,941
Inventory 44,469 43,046
Average inventory 43757.5
Trade receivables/Debtors 5624.0 5835.0
Average Debtors 5729.5
Total Assets 199,581 198,825
Average assets 199203.0
Current Liabilities 64619.0 66928.0
Trade Payables/Creditors 38,487 41,433
Average creditors 39960.0
Total Liabilities 119,035 121,027
Capital Employed 134962.0 131897.0
Long term loans 38,214 36,015
Shareholders' Equity 80,546 77,798
(Source: Financials.morningstar.com, 2017)