Assignment Unit 5-2 GM506-01 Step 1-Select a publicly held company. Runninghead: Unit Five Assignment-Financial Analysis Report-Final Project

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Selection of a publicly held company and their sales trends.
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  1. Runninghead: Unit Five Assignment-Financial Analysis Report-Final Project Assignment Unit 5-2 GM506-01 Strategic Financial Analysis Kaplan University Professor: Dr. Richard Carter October 3, 2017 Deborah Beene  2. Runninghead: Unit Five Assignment-Financial Analysis Report-Final Project Step 1- Select a publicly held company. The company which was pre-selected for the class to use was Wal-Mart, with Target as the Benchmark company in which to compare it with. Wal-Mart Wal-Mart opened its first store on July 2, 1962; as a five and dime. The owner and founder was Sam Walton and his family. The location of Wal-Marts headquarters is located currently in Bentonville, Arkansas. Wal-Mart owns 28 retail stores across the globe adding on-line sales to its revenues as well. Within “ Wal -Marts corporate structure it is maintained with three operating systems, these include: (1)-real estate, (2)- store operations, and (3)- logistics”, (SWOT Analysis, 2017). Wal-Mart Annual Financials The annual financials for Wal- Mart shows that “Wal -Mart sales for the year 2015 were 48.65B, in 2016 they were 482.13B, and then in 2017 sales were 485.14B. This shows that in the year 2016 there was a decrease in sales but then they were lifted again in 2017”, (marketwatch).   Step 2-Select a Benchmark firm to compare your company against. Target is a big box retailer that is in fierce competition with Wal-Mart. Target Corporation was established and founded by John F. Geisse who developed the concept of upscale discount retailing”, ( Corrigan, Craciun, & Powell, 2014). Target headquarters is located in Minneapolis, MN. Target is a good benchmark for Wal-Mart because of its financial rations in comparison of that with other retailers in the industry. Target may possess less stores, but according to: (Mir  zayev, 2015) “ investors should look towards the inventory turnover, asset turnover, and receivables turnover ratios”, in order to make a solid business investment decision; based upon the financial statements of any company.  3. Runninghead: Unit Five Assignment-Financial Analysis Report-Final Project Target like Wal-Mart also has on-line sales revenue which is considered to be responsible for a large amount of their over-all sales for the years of 2016-2017. Target Annual Financials For the fiscal year of 2015 the Target Corporation saw sales that equated “ 72.62B in the year 2016, Target saw sales that totaled 73.79B and in the year 2017 where we are today the sales equaled 51.17B”, (marketwatch). Step 3-Obtain the firms balance sheet, income statement and statement of cash flows for the past year. Appendix A Walmart Balance Sheet Target Balance Sheet Period Ending 1/31/2017 Period Ending 1/Current Assets Current Assets Cash And Cash Equivalents 6,867,000 Cash And Cash Equivalents 2,Accounts Receivable 5,835,000 Inventory 8,Inventory 43,046,000 Accounts Receivable 1,Other Current Assets 1,941,000 Other Current Asssets Total Current Assets 57,689,000 Total Current Assets 11,Property Plant and Equipment 114,178,000 Property Plant and Equipment 24,Goodwill 17,037,000 Goodwill Other Assets 9,921,000 Other Assets Total Assets 198,825,000 Total Assets 37, Current Liabilities Current Liabilities  4. Runninghead: Unit Five Assignment-Financial Analysis Report-Final Project Accounts Payable 63,008,000 Accounts Payable 10,Short/Current Long Term Debt 3,920,000 Short/Current Long Term Debt 1, Step 4- State why you chose the companies that you did. The companies that are used within this document had been pre-selected. 5. What are the differences between these two companies? Are Sales, Cash Flows, Profits, trending up? Support this information based upon the annual report. Walmart stores are having more of an increase in sales than Target. While Wal-Mart is showing more production with sales; Target is gaining more profit. In regards to Cash Flow trends Target has the upper hand. Companies have to diligently keep abreast of their cash flow changes; for it is with current cash assets that these two competing companies repay debts and maintain ongoing day to day business operations.   Walmart 2017 2016 2015 Sales = Revenue $485,873,000 $482,130,000 $485,651,000 Profits = Net income (loss) $22,764,000 $24,105,000 $27,147,000 Cash Flows = Change in Cash and Cash Equivalents -$1,838,000 -$430,000 $1,854,000 Trends (Walmart) 2017% 2017 Amount Change 2016% 2016 Amount Chang Sales = Revenue 0.78% $3,743,000 -0.73% -$3,521,000 Profits = Net income (loss) -5.56% -$1,341,000 -11.21% -$3,042,000 Cash Flows = Change in Cash and Cash Equivalents -327.44% -$1,408,000 -123.19% -$2,284,000 Target 2017 2016 2015 Sales = Revenue $69,495,000 $73,785,000 $72,618,000 Profits = Net income (loss) $4,969,000 $4,910,000 $4,535,000 Cash Flows = Change in Cash and Cash Equivalents -$1,534,000 $1,836,000 $1,515,000 Trends (Target) 2017% 2017 Amount Change 2016% 2016 Amount Chang Sales = Revenue -5.81% -$4,290,000 1.61% $1,167,000 Profits = Net income (loss) 1.20% $59,000 8.27% $375,000 Cash Flows = Change in Cash and Cash Equivalents -183.55% -$3,370,000 21.19% $321,000 6.   State why you would or would not invest in this company, Wal-Mart vs Target. Refer to the more significant trends noted in step 5 to support your answer.  5. Runninghead: Unit Five Assignment-Financial Analysis Report-Final Project Between the two retailers, I would have to choose Target, the numbers favor, Target for two very specific reasons. (1)-Cash Flow Trends, (2)-Profitability.  7. Pending litigation;(not SEC)Cite your sources (Each company’s Annual Report.  Walmart “ Litigation The Company is involved in a number of legal proceedings. The Company has made accruals with respect to these matters, where appropriate, which are reflected in the consolidated financial statements. For some matters, a liability is not probable or the amount cannot be reasonably estimated and therefore an accrual has not been made. However, where a liability is reasonably possible and may be material, have been disclosed. The company may enter into discussions regarding settlement agreements, if discussions regarding settlement of these matters, is in the best interest of the company and its shareholders. Unless stated otherwise, the matters, or groups of related matters, discussed below, individually or in the aggregate, may result in a liability material to the company’s con - ditions or relations of operations. ASDA Equal Value Claims ASDA Stores, Ltd. (“ASDA”), a wholly -owned subsidiary of the Company, is a defendant in over 10,000 “equal value” claims that are proceeding    before an Employment Tribunal in Manchester (the “Employment   Tribunal”) in the United Kingdom (“UK”) on beha lf of current and former ASDA store employees, who allege that the work performed by female
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